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The minute you use your U.S. debit card or bank account abroad, your wallet may feel the impact. You may incur foreign transaction and ATM fees. Or your bank may decline debit card purchases if it doesn’t know you’re traveling.
If you live or have close connections outside the U.S., you might need a more global account for certain banking needs. That’s where a multicurrency account comes in. Here’s how it works and why we recommend one if you spend a lot of time abroad.
What is a multicurrency account?
A multicurrency account is an account at a bank or financial tech firm that lets you spend, receive and hold multiple currencies. It can work like an international checking account with multiple subaccounts, each with a different currency. This lets you manage payments in a foreign currency instead of opening a new bank account overseas. While credit cards work for purchases abroad, multicurrency accounts are a more robust tool for international payments and transfers.
Multicurrency accounts, also called foreign currency accounts, are available to everyday consumers through fintechs such as Wise and Revolut. Banks may also offer them as premium services.
When to choose a multicurrency account
1. You live or work outside the U.S., or travel abroad several times a year.
A multicurrency account can be an easy way to avoid expensive currency conversions every time you make a transaction or transfer. This makes it easier to truly know the cost of a transaction, since you're not factoring in constant exchange rate fluctuations. Expats tend to benefit more from multicurrency accounts than people on vacation.
» Learn more: What is offshore banking?
2. You make frequent large transactions with people abroad.
If you have family or friends in other parts of the world, or you work with non-U.S. business clients, you might find a multicurrency account a more convenient and cheaper way to move large amounts of money than by using wire transfer services. Bank wires can have steep fees — $30 to $50 for international transactions — and exchange rate markups that apply even when the fee is waived.
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Don’t open a multicurrency account if you:
- Only need currency exchange for occasional trips abroad.
- Don’t need to send or receive money in a foreign currency using a bank account.
- Need to exchange currency only a few times a year. Below, you can find other travel-friendly payment options to avoid transaction fees.
- Make one-time international transfers. Banks and nonbank transfer companies let you send money abroad without requiring you to open accounts abroad. If you’re not frequently sending money back and forth, there’s no need to take the extra step to get a new account.
What to expect from multicurrency accounts
Among the options we researched, Wise and Revolut stood out because their multicurrency accounts are open to the general public and their fees are straightforward. Here’s what they offer and what to look for in general:
- Competitive exchange rates. When sending money, converting between currency balances or making purchases, the firms’ rates tend to be based on foreign-exchange markets with low to no rate markups. There are some fees, but the total cost of a conversion tends to be cheaper than what many traditional banks charge. Large U.S. banks add a 3% markup to debit card purchases and ATM withdrawals in a foreign currency, in addition to the conversion expense.
- Mobile apps and debit cards. Wise and Revolut both partner with banks to offer debit cards, which work on the Visa or Mastercard network. And you can also send money via their iOS and Android apps, which are highly rated.
- Support for local money transfers. You can get country-specific account details in order to receive payments in different currencies.
What else to know before you open an account
You can earn interest in some accounts. Wise and Revolut offer high-yield savings features. This means that your money’s not just sitting idle, it's working for you. Note that this is not the same as trading currencies as an investment. For more on that, read our article on forex trading.
» Want to find the best savings rates? Check out our list of the best high-yield savings accounts
Money deposited in a fintech isn’t protected the same way as it is in a bank. Banks that are members of the Federal Deposit Insurance Corp. (FDIC) are federally insured. This means your money is protected in the event of the bank’s failure, up to a limit. Wise and Revolut are not banks, so they can’t offer federal insurance themselves. Revolut works with partner banks to insure customer money through those partners. But it’s only insured in the event the partner bank fails, not Revolut. (It’s worth noting that Revolut has recently applied for a U.S. bank charter of its own.)
Wise does not offer federal insurance and it does not have those bank partnerships for federal insurance. However, regulations require Wise to keep customers’ money separate from its own funds. Wise says it safeguards those funds in separate bank accounts and government bonds.
Other travel-friendly options
A multicurrency account isn’t the only way to limit fees while using money abroad. Here are four more options to consider:
- Credit cards with no foreign transaction fees: For everyday purchases, whether you use physical cards or mobile wallets that are linked to them.
- Bank debit cards with no foreign ATM fees: Best for cash withdrawals, especially in countries where cash is heavily used. Generally, these debit cards, and the checking accounts they’re connected to, don’t have foreign transaction fees either. Schwab Bank's Investor Checking is a popular example. It has no foreign transaction fees and unlimited worldwide ATM fee rebates.
- Currency exchange services from your bank: This is a good option for cash you’ll bring on your next trip. See if your bank or credit union has this service since it’s often cheaper than using kiosks at the airport.
- Nonbank money transfers for sending wires overseas while in the U.S.: Companies such as Wise and OFX offer stand-alone transfers internationally that have competitive rates and low to no fees.
If you live or work abroad, a multicurrency account can help you save on fees if you send, receive or spend money abroad often. If you travel only occasionally, there are better ways to avoid international currency exchange fees.
