Published on July 17th, 2019
Do you on a regular basis send or receive money in different foreign currencies? Then, you may want to consider opening a foreign currency account otherwise known as a multi-currency account (MCA). This means that you can hold multiple foreign currencies in a single account.
This type of account can make it easy for you to save money from the fluctuations in exchange rates, and even minimize the fees involved in making international payments. While there is a variety of a multi-currency account out there you can choose from, it is important to do some research before you choose to one.
Here’s is an unlimited guide on all you need to know about a multi-currency account in Canada.
1. What Is A Multi-Currency Account?
As we have previously explained, multi-currency accounts in Canada allow you to hold different foreign currencies within the same bank account. You can choose to exchange these funds into Canadian dollars (CAD) or kept in whatever foreign currency they were received until you decide to convert them.
Just like normal accounts, MCA comes in both business and personal accounts. One allows for the usual day to day transactions, while the other is designed for customers who want to save in a foreign currency.
For example, you open an account to hold just CAD alone or an account which allows you to hold different currencies in one place. What is more, you may earn interest depending on the account.
2. How It works
If you’re considering getting a multi-currency account as an option for payments in several currencies, then, this is an ideal method that is fast and can save you tons of money.
Eliminating the need to be worried about currency fluctuations, you can use this specialist account type to deposit your foreign currencies. You can benefit from changing exchange rates while sending funds abroad by switching between currencies. Although transfer fees may apply, you can avoid extra charges for conversion.
3. Benefits Of A Multi-Currency Account
A multi-currency account in Canada can be ideal for freelancers who get paid in foreign currencies, importers and exporters who regularly have to make overseas payments. It also uses for those who send support their family member or friends living or studying abroad. It can also be used for currency exchange Toronto. What other benefits are there?
- As mentioned above, one of the major advantages of MCA is that you can keep your money in multiple foreign currencies of your choice. This is especially important as you can switch between them when the exchange rates are favorable.
- When shopping online, you can make use of your foreign currency balance with retailers who trade in dollars, pounds, euros or other foreign currencies.
- It is even possible to send and receive transfer these foreign currencies at no cost or with cheaper fees when compared with traditional banks transfers.
If you’re considering opening a multi-currency account, it is important to pay attention to the fees too.
4. Multi-Currency Account Fees
An MCA is subjected to a number of different fees, and the three most common you need to familiarize yourself with are:
- Foreign exchange fee
- Monthly service fee
- Transfer fee
Foreign Exchange Fee: This is the cost of converting one currency to another. These fees are usually around 3%. Nevertheless, it is reduced if you are converting a huge sum of money.
Monthly Service Fee: This is what you pay on a monthly basis for the maintenance of your multi-currency account. Some MCAs providers waive these fees based on the number of transactions or the average balance.
Transfer Fee: This occurs when sending or receiving international payments. With multi-currency accounts, you have the options of accessing your funds and to send or receive payments using a credit card and debit card.
It is worthy of note, that there are some other small service fees that may apply to a multi-currency account in Canada.