Fintech companies and traditional banks are all jumping onboard the multi currency wagon. But what exactly is a multi currency account and do we really need it?
To put it simply, multi currency accounts allow you to buy and hold multiple currencies in a single account. Thus it eliminates the need of multiple accounts for different currencies. The option to lock in exchange rates and convert currency anytime with ease is what draws the attention to multi currency accounts. So when you make foreign transactions with your multi currency card, you save on currency exchange fees.
Amazing, isn’t it?
But here's the catch...
1. Exchange rate locking is a doubled-edged sword
Just as you're able to lock in "favourable" exchange rates and avoid fluctuations, you also miss out on the benefits of a sudden improvement in rates.
2. Multi currency account users pay currency exchange fees
(BigPay users pay ZERO fees)
When you spend in a currency other than what is loaded on your multi currency account, you'll likely be charged a currency exchange fee up to 2%. For instance, if you transact SGD100 without any preloaded SGD currency in your account, you'll pay an extra SGD2 currency exchange fee totalling your expenses to SGD102. To avoid being charge, you need to constantly check your account for sufficient currency before you spend to avoid currency exchange fees.
On top of that, some financial providers even charge an admin fee when you convert between currencies in your multi currency account. It's ridiculous. When you’ve been hit with fees after fees, even the offer of best exchange rates now seem less exciting.
3. Most multi currency accounts only hold up to 12 currencies or less.
You’re probably wondering...but what happens when you travel to Seoul and your multi currency account doesn't hold South Korean won? In this situation, you definitely can't lock in exchange rates and you'll most likely pay a currency exchange fee.
The bottom line is that the benefits of a multi currency account is limited to the list of currencies it could hold.
Do you need a Multi Currency Account? 🤔
If you're a money wizard 🧙♀️who can predict the next currency crisis or a forex trader, multi currency accounts would certainly be of interest to you.
Chances are that you don't need a multi currency account. If you're looking to really save a lot of money on currency exchange fees without the hassle associated with multi currency accounts, BigPay is all you need.
We want to hear from you 🎤
We're building a community driven financial product and your feedback is crucially important to us. You've heard from us about the benefits and drawbacks of multi currency accounts so we'd love to hear from you.
Do you prefer a multi or a single currency account like BigPay? Leave a comment below!