Multi-currency accounts: Why freelancers and even global investors should have it

Dr Anup Menon is a seasoned investor who diversifies his investment across global markets – not just in equities but also alternative investment avenues such as project financing. He has invested money in the US and Europe. “Investing money abroad is a complicated process. It involves transferring money separately to every overseas platform from my Indian bank account. Besides, Europe doesn’t accept money directly from the Indian bank account. One has to have a European bank account,” says Menon.

Enter multi-currency account by Winvesta. It solved many of Menon’s forex conversion issues.

“Transferring money directly from the Indian bank account to the overseas platform is a time-consuming process. Besides, I had to make separate transfers. Each transfer incurred forex conversion charges. Once I started using Winvesta’s multi-currency account, I transferred money to this account in bulk. Now I can directly send it to respective platforms without additional forex charges. The payment is faster and takes about two days,” says Menon.

A multi-currency account is a non-interest-bearing bank account that allows you to receive, pay, and hold funds in multiple currencies. You only need to open one bank account that could be linked to accounts in different currencies. Winvesta offers it for 30 currencies.

“For every currency you will have a different account but you only need One log-in for the same. Opening a new currency account is just a click away at no extra cost,” says Prateek Jain, co-founder, Winvesta, a UK-based financial services platform.

Winvesta acts as a representative for a UK-based e-money institution Currency Cloud. The money kept with Winvesta’s multi-currency account is domiciled in the UK safeguarded by Barclays. These institutions cannot lend this money.

How can you use it?

If you are someone willing to invest in different global investment options (from stocks, real estate to alternative investments), you may do it with a single account. In the absence of a multi-currency account, you may have to make separate transfers incurring separate costs. For example, having an MCB account will allow you to invest in the US and European stocks from a single account.

Freelancers or people who receive regular cash-flows from foreign entities may use this account for receiving money.

“Receiving money in the MCB account will incur no cost as it will be a local-transfer by the foreign entity. You may convert the money in INR at a comparatively lower conversion charges or keep holding it in the MCB account in the foreign currency itself. Withdrawal from the account in INR will incur $1 cost,” says Jain.

What about banks offering foreign currency accounts?

A returning non-resident Indian can open a foreign currency account with a traditional bank, but one cannot transfer money from India to these accounts. It helps you hold surplus foreign currency balance that you cannot keep physically.

“Indians can hold foreign currencies as cash, coins, traveller’s cheques, and forex cards. They can also hold surplus balances in resident foreign currency accounts. Limits apply. How much forex can be bought by an Indian resident, and how much of it can be retained in any form, is governed by RBI’s rules. Up to $2000 worth of forex in cash, TCs, and coins can be retained by returning Indian travellers. Anything over this limit needs to be turned over to a resident foreign currency account within 180 days,” says Adhil Shetty, CEO, BankBazaar.com.

If you open an MCB account with Winvesta, you need to maintain minimum $50 balance. There will be a one-time set-up fee of Rs 399. There will also be a monthly fee of $2.99 to maintain the account.

“Platforms that were very difficult to access in the absence of a foreign bank account, are now only a few clicks away. In the few days that the multi-currency account has been live, the platform has already seen clients fund alternate investment platforms in Europe like EstateGuru, Peerberry, Crowdestor and Seedrs,” says Jain.