What is a Foreign Currency Account? – Guide for Beginners12 min read

What is a Foreign Currency Account? – Guide for Beginners12 min read

A foreign currency account (also known as an FX account) allows you to hold funds in currencies other than your base currency. 

If you regularly work with or transfer money to people in other countries, a foreign currency account can make managing international finances much easier.

In this article, we’ll explore what a foreign currency account is, how it works, and discuss some of the top options for opening one – including the benefits of choosing a digital bank like The Kingdom Bank. 

By the end, you’ll understand why a foreign currency account is an invaluable tool for anyone who regularly deals with more than one currency.

What is a Foreign Currency Account in Digital Banking?

With the rise of digital banking platforms, opening a foreign currency account has become more convenient than ever before. 

An entirely online bank like The Kingdom Bank allows you to open an account and gain access to your funds from anywhere in the world with just a computer or mobile device.

A foreign currency account at a digital bank operates very similarly to a traditional multi-currency account at a brick-and-mortar institution. The key differences are that everything can be managed from an app or web portal instead of visiting a physical branch.

At The Kingdom Bank, you can hold balances in over 50 global currencies like US dollars, euros, British pounds, Australian dollars, and more. 

The exchange rates applied to conversions between currencies are typically more competitive than you’d find at a traditional bank as well.

One huge advantage of digital banking is the ability to easily transfer funds between your currency holdings. 

Need to pay an invoice to a supplier in euros? Just swap some dollars or pounds into euros with a few taps. No filling out forms or waiting days for a wire to process.

Digital platforms also tend to charge lower fees, if any at all, on foreign transactions. So whether you’re travelling abroad or making regular international payments, a digital foreign currency account saves you money on every swap.

How to Open a Foreign Currency Account?

Opening a foreign currency account with The Kingdom Bank is a straightforward process that can be completed entirely online:

1. Apply online. Visit The Kingdom Bank’s website and click “Open an Account”. Fill out the digital application providing basic details like your name, address, date of birth, and intended use of the account.
2. Verify your identity. As part of our compliance procedures, The Kingdom Bank will need to verify your identity. This is typically done by uploading IDs like a passport or driver’s license through our mobile app.
3. Fund your account. Once your application is approved, you’ll receive account details to transfer your opening deposit. For The Kingdom Bank, the minimum is $250 but can be as much as you’d like.
4. Start using your account. Log in to the mobile or web portal to swap currencies, make transfers to other accounts, and begin utilizing your new multi-currency banking solution.

The entire process can often be completed in under 24 hours. 

With a digital bank, you no longer have to take time off work or endure long wait times at a physical branch. Everything is handled seamlessly online.

Is It Safe to Open a Foreign Currency Account?

Opening an account with the right digital bank offers the same safety and security as a traditional institution – if not more. But it’s important to understand regulations and choose a reputable provider.

A big question people often have is whether keeping large sums in multiple currencies poses any risks. The answer is that as long as you’re dealing with a licensed and regulated bank, your money should be well protected.

The Kingdom Bank, for example, is authorized and regulated by the Financial Services Unit of Dominica. We must adhere to strong international banking standards which impose strict diligence and capital reserve requirements. Your funds are also insured for up to $250,000 equivalent per depositor.

Online banks also utilize advanced security systems like biometric logins, multi-factor authentication, automatic monitoring of login locations, and encryption of all personal information. You likely have very little to worry about from a safety or regulatory perspective at a vetted digital institution.

Some additional precautions include verifying licenses, research background/reputation, and diversifying funds across institutions if holding very large balances. 

But with responsible due diligence, an online foreign currency account can offer equal or greater security than traditional solutions.

Which Digital Bank is Best for Opening a Foreign Currency Account?

When it comes to choosing the right digital bank for your international needs, there are a few key factors to consider:

• Supported Currencies – Look for coverage of the currencies you need like US dollars, euros, British pounds, etc. The Kingdom Bank supports over 50 global currencies.
• Exchange Rates – Make sure conversion charges are clearly disclosed and competitive. The Kingdom Bank’s rates are tightly aligned with interbank mid-market pricing.
• Fees – Consider any monthly, transaction, inactivity or overdraft fees. The Kingdom Bank has no account fees of any kind.
• Security – Validate identity verification processes, login security features, activity monitoring and insurance coverage. The Kingdom Bank adheres to strict Swiss banking regulations.
• Ease of Use – Make transfers, pay bills and access support easily through mobile/web portals. The Kingdom Bank’s App/Desktop experience is simple and intuitive.

Taking all these factors into account, The Kingdom Bank stands out as an excellent choice. 

With no fees, highly competitive rates, robust security practices and convenient digital access, it’s easy to see why we’re a leader for opening an international bank account online. Our client-centric approach also makes getting started with a foreign currency account quite simple and streamlined.

Fastest Way to Open a Foreign Currency Account

As we’ve covered, utilising a digital-first bank is by far the quickest path to opening a foreign currency account. 

A physical bank’s application process can involve multiple lengthy in-branch meetings that block out large chunks of your day.

An application to The Kingdom Bank can usually be completed from start to finish within a single hour or less. And in many cases, you may be able to get up and running within 24 hours or even the same day.

The steps are:

• Visit The Kingdom Bank’s website and provide basic applicant details on our online form
• Upload identification documents through the mobile verification process
• Wire your opening deposit amount (just $250 minimum)
• Log into The Kingdom Bank platform and start exchanging currencies

By embracing fully digital capabilities and streamlining Know Your Customer (KYC) checks, The Kingdom Bank eliminates inefficient in-person hurdles. 

With an always-online application you can accomplish the entire sign-up whenever suits you – even from a mobile device during short breaks in your day.

For anyone seeking an immediate solution to facilitate international banking needs, the unprecedented speed and convenience of opening an account with The Kingdom Bank makes it a clear standout choice in the market. 

You’ll have all the access and capabilities of a global bank account within just hours.

Digital banking has made obtaining the valuable flexibility of a foreign currency account easier than ever before. 

Through cutting-edge online applications and simple online verification, The Kingdom Bank allows you to take control of your worldwide financial activities from anywhere – often within just one short session.

So if you’re ready to start receiving, exchanging or sending funds across borders, discover how quickly and smoothly you can get up and running by applying with The Kingdom Bank today.