Why are large and small businesses all opening foreign currency accounts?
Rohen Burton, Chief Financial Officer of Fit n Fast suggests, “If you purchase from overseas suppliers (for example, the US) consider setting up a Foreign Currency bank account and plan to buy some currency when the rates are favourable. Don’t exchange more than you need and make sure your AUD cash flow can handle having this amount off sitting in another account. In 2011, there was an opportunity of saving over 5% just on exchange rates alone if they were booked at the right opportunities.”
In other words, business owners who make regular foreign currency payments or have foreign currency receipts on a regular basis are encouraged to create a foreign currency account for several monetary reasons. A foreign currency account can be used to hold funds in a currency ready for future payments, or as a temporary holding before conversion into Australian dollars at a particular date. Foreign currency bank accounts are also suitable for businesses that both deal and receive payment in that foreign currency – which then reduces the conversion fee to or from Australian dollars.
Features of Foreign Currency Accounts
All banks in Australia provide separate benefits and perks to setting up a foreign currency account, so do take your time shopping for a suitable account for your business. Generally, all foreign currency account holders can enjoy:
- Receiving payments from overseas clients and paying overseas suppliers without repeatedly converting funds from/to Australian dollars
- Converting funds at the time of your choosing, avoiding the impact of short-term currency fluctuations
- Reducing currency risk by avoiding short term currency fluctuations
- Saving on conversion costs for the same currency
- Having the ability to choose from 15 major global currencies
- No opening, closing or account-keeping fees
- Earning competitive interest on selected currencies