One of the best ways to take charge of your finances in today’s uncertain economy is to accumulate a healthy savings account. Nobody wants to feel the stress of knowing that they are only a paycheck or two away from financial disaster because they lack money to fall back on when certain things happen. Key examples include job loss, disability, a car breakdown, a sick child or pet, and other types of financial emergencies.
Saving provides a financial “backstop” for life’s uncertainties and increases feelings of security and peace of mind. Once an adequate emergency fund is established, savings can also provide the “seed money” for higher-yielding investments such as stocks, bonds, and mutual funds. And to save in foreign currencies, you have to open a foreign savings account that allows savings, sending, and receiving payments in multiple foreign currencies. Such foreign savings allows you to enjoy multiple benefits which include;
It enables growth in your savings
When you save some of your money in a foreign currency account, you can protect it against volatile currency fluctuations, which usually happen because of political or economic changes, rating agency outlooks, or even inflation.
Now you can take advantage of currency movements in real-time and watch your money grow in a global currency like the Euro, US Dollar, or the British Pound.
It helps Manage foreign exchange
Foreign exchange (also known as forex or FX) is another cost to bear in mind. With your foreign currency savings account, you can manage forex volatility. If you have just one account – and let’s assume it can receive foreign currencies only when converted to British pounds – you may lose money if the exchange rate is not in your favour. With a multi-currency account, if you have customers in Europe, they can pay into your account if it accepts euros. Equally, you can pay any suppliers in euros.
Because a foreign currency account works like a holding account, you can wait until you have a good exchange rate before converting from one currency into another. And if you have sufficient funds, you can also manage supplier payments by buying currency at a good rate and storing it in your account for future use. Whether you’re buying or selling, a foreign currency account enables you to move money cost-effectively.
Reduced Exchange Rate & Better Conversion Costs
The biggest benefit of using a foreign currency account is that it allows you to save on exchange rate fees preventing you from incurring any exchange rate loss that comes with regular bank transfers or wire transactions.
Easier International Transfers
You can make international payments and transfer money to and from your foreign currency account using online banking including faster cross-border payments, real-time exchange rates, and lower transfer fees.
Reduced Transaction Costs
If you open separate accounts in different countries and currencies, each bank may charge an account maintenance fee.
A foreign currency account eliminates many of these extra charges, and you just need to pay a small single account fee.
Leverage exchange rates.
Most accounts let you switch among currencies to take advantage of strong exchange rates, which can keep a ton of money in your pocket if you conduct large business transactions.
Stronger supplier relations
Just as using local currencies will help your overseas customers, your overseas suppliers will thank you if you can pay them in their currencies. You may even get more favourable terms if you accommodate their needs.
Conclusively, for business owners, with a foreign savings currency account, the administration is much easier because everything is in one place and streamlined. Monthly accounting is less demanding, without the headache of matching and reconciling invoices and receipts across different currencies, plus there are fewer adjustments for exchange rate differences. Nor will you have to juggle different accounts and different banks across multiple jurisdictions.Featured Image Source: Entrepreneurship Life
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