What Is A Multi-Currency Account, And How Does It Work?

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If you frequently travel or purchase goods online from overseas, you've likely faced high foreign transaction and ATM fees when using your credit card for payments or your ATM card for overseas withdrawals.

In such cases, you might want an alternative that can help you dodge these fees. That's where a multi-currency account comes in. 

What is a multi-currency account?

Essentially, a multi-currency account allows you to hold and use different foreign currencies (such as USD, EUR, AUD) in addition to Singapore Dollars (SGD), all from the same account. These accounts are offered by both traditional banks in Singapore, such as HSBC and DBS, as well as FinTech companies. 

Scenarios where a multi-currency account is right for you

Your business constantly makes and/or receives payments overseas

If you own or manage a local small or medium-sized enterprise (SME), a multi-currency account can be really helpful in the following scenarios:

Your business gets paid by customers overseas or pay suppliers in other countries

This applies if your business sells products online to customers in other countries, or if you purchase materials from abroad. A multi-currency account makes it easier for you to handle these payments. Instead of constantly changing money and paying fees, you can get paid in the customer's currency and then pay your suppliers in their currency. This is especially important because Singapore conducts extensive trade with other countries.

You’ve expanded your operations regionally, or even globally

Many Singaporean businesses are expanding and operating in locations such as Malaysia, Thailand, or even beyond. If your company has established branch offices and/or employs remote workers in locations outside of Singapore, a multi-currency account makes it easier for you to manage local currencies in your branch offices’ locations without needing to use lots of different bank accounts.

» Learn more: Is it worth opening an offshore bank account?

You travel outside of Singapore on a regular basis

If you frequently travel for work or take business trips around the region, a multi-currency account can be a real help. It saves you money on foreign exchange fees and makes it easier to track your spending when you're overseas, so you don't have to calculate rates manually.

You often shop online

If you frequently shop online from international e-commerce platforms, a multi-currency account offers several advantages. 

Firstly, when you exchange SGD for USD in your account, the SGD price is "locked in" at that point, and you avoid the risk of exchange rate changes increasing the price before you pay.

Secondly, many overseas retailers and payment processors impose currency conversion fees, pushing the cost of your purchase higher. However, a multi-currency account allows you to pay directly in the website's currency, potentially avoiding these fees. Some accounts also provide linked debit cards, allowing for a more convenient online checkout experience.

You regularly send remittances to others outside of Singapore

Sending money internationally can be expensive, largely due to exorbitant fees and unfavourable exchange rates. However, a multi-currency account can help reduce or eliminate these costs. Holding money in the currency you're sending avoids constant conversions and fees. 

Compared to money transfer services, multi-currency accounts generally offer more favorable exchange rates and a more streamlined transfer process.This also means you can monitor exchange rates in real-time and always know how they affect the fees you’re paying.

All of this means your friends and family receive a larger portion of your money.

When a multi-currency account might not be necessary 

You seldom travel out of Singapore or buy things overseas

If you travel or make occasional purchases from overseas, a multi-currency account may not be the most practical solution for your needs. That’s because the potential fees of having an account could outweigh the benefits.

For occasional needs, other options might be more suitable such as travel credit cards, exchanging currency at money changers in Singapore, or using online money transfer services. 

You make one-time international transfers

If you rarely exchange currency, using readily available options in Singapore such as money changers or transfer services can be more convenient and cost-effective. They offer easy access, competitive rates due to local competition, and fast transactions for smaller amounts.

Why FinTechs are a strong option for multi-currency accounts in Singapore

FinTech companies have become significant players in the multi-currency account space, and they often offer advantages that are particularly attractive:

• Competitive exchange rates: FinTech providers often offer exchange rates closer to the mid-market rate compared to traditional banks, potentially saving you money on currency conversions.

• Lower fees: Many FinTech platforms offer reduced or even no transaction fees, especially for international transfers, making it more cost-effective to move money globally.

• Ease of use: FinTech providers typically offer user-friendly online platforms and mobile apps, streamlining account management and transactions.

• Faster transfers: International transfers via FinTech platforms are often faster than traditional bank transfers, providing quicker access to your funds.

• Transparency: FinTech providers typically offer clear and transparent fee structures and exchange rates, so you know exactly what you're paying.

Some of the best multi-currency account options in Singapore often come from these FinTech providers, such as Wise, YouTrip and Revolut.

Other options for handling finances abroad

For comparison, here are other options Singaporeans might consider for managing their money while travelling:

• Travel credit cards: These cards often come with benefits like no or low foreign transaction fees and travel rewards. 

• Money changers: The traditional method of exchanging Singapore Dollars for foreign currency, with money changers readily available in Singapore.

• Remittance platforms: Companies such as Wise, Western Union and SingX offer stand-alone transfers internationally that have competitive rates and low to no fees.

Each of these options has its own pros and cons compared to multi-currency account options. Credit cards offer convenience but may incur fees if not chosen carefully. Cash is widely accepted, but it also involves security risks. Remittance platforms are convenient, but are vulnerable to exchange rate fluctuations which can impact the final amount that reaches the recipient.

What you need to know about multi-currency accounts in Singapore

Here's some other essential information you need to know if you’re considering a multi-currency account:

Account opening requirements

To open a multi-currency account, you must meet specific eligibility criteria, which may vary among providers. Generally, these criteria include being a Singapore resident (Citizen, Permanent Resident, or occasionally a foreigner with a valid work/residence pass). 

You'll also need to provide certain documents, typically: 

• Identification documents (NRIC, passport) 

• Proof of address (utility bill, bank statement) 

• In some cases, income documentation or employment proof may be required, particularly for accounts with higher transaction limits. 

While many providers offer online account opening, some might require you to visit a branch for verification purposes.

Account fees

Be aware of potential fees, as they can chip away at the value you’ve deposited into the account. You might encounter various fee types, such as: 

• Monthly or annual account maintenance fees (these are sometimes waived if you meet specific requirements) 

• Inactivity fees (charged if the account remains unused for a certain period) 

• Transaction fees (for activities like telegraphic transfers, though multi-currency accounts often seek to reduce these) 

• ATM withdrawal fees (particularly when withdrawing money overseas) 

• Account closure fees (if you close the account within a specified timeframe)

Minimum balance requirements

Check if there are any minimum balance requirements. Some accounts may require you to maintain a minimum balance to avoid monthly fees.

Transaction limits

The maximum amounts you can transfer or withdraw per day can vary. Therefore, it's crucial to understand the different limits that may apply to online transfers, ATM withdrawals, and over-the-counter transactions.

Currency availability

Confirm which currencies are supported by the account. Most accounts will offer major currencies (USD, EUR, GBP, AUD, JPY), but the availability of less common currencies varies. Consider whether the account supports the specific currencies you'll need.

Transparency of exchange rates

To accurately compare costs, it's crucial to understand how exchange rates are determined. While FinTech providers frequently use rates closer to the mid-market rate, traditional banks might include a markup. 

Security

Ensure the bank or FinTech provider has robust security features in place on their multi-currency accounts to protect your funds. Look for features like:

• Multi-factor authentication (MFA)

• Encryption of online transactions

• Fraud monitoring

• Account alerts and notifications

Customer support

Choose a multi-currency account with good customer service. You'll need reliable support to resolve issues like transfer errors, fee disputes, or account access problems, which can be critical for international transactions.

Consider the following factors:

• Availability of phone, email, and online chat support

• Operating hours of support

• Responsiveness and helpfulness of support staff

Regulations

Verify if the account provider is regulated by the Monetary Authority of Singapore (MAS). MAS regulation provides an added layer of assurance, as it ensures the provider adheres to specific standards and regulations.