Post by Sapphire Capital on Jul 12, 2008 0:00:21 GMT 4
In the US multicurrency accounts are offered for institutional accounts only, very seldom are they available to single investors or simple retail customers (I saw once SVB Bank out of Silicon Valley offering it but never saw a big bank doing so). Why such may be the case in the US it is not the case in Europe and other parts of the world.
Multicurrency accounts consist of a base account in the domestic currency of the account opening bank plus sub accounts in the currencies the bank allows.
The allowed currencies are usually the currencies which can be received and send electronically, have a liquid market in the perceived range of received payments and are unrestricted.
The arrangement is simple: whenever the bank receives for the account a different than the domestic currency it does not exchange for the domestic currency but credits in the currency it receives the transfer.
Multicurrency accounts only work for electronic transfer not cash note payments. In Europe for example you can have a USD amount wired in but you can not withdraw that USD amount in cash notes without going through a double exchange (USD to domestic and then domestic to USD on a cash base). You can in such circumstances not desposit USD cash notes in the USD sub account.
In regards of exchanging currencies between the different sub accounts you are usually given a medium exchange traded rate plus .0010.
Some banks handle each currency through a different account, which means you have specific account numbers and you have to maintain the account seperately.
In a sub account situation the multicurrency account closes and opens through the disbursement or receipt of funds, the seperate accounts stay in place, have their own compliance handling and have a different cost schedule.
For people who use the multicurrency account for spot trading OANDA has a very cost efficient solution, but typically Forex banks have the same solutions available for you.
Multicurrency accounts consist of a base account in the domestic currency of the account opening bank plus sub accounts in the currencies the bank allows.
The allowed currencies are usually the currencies which can be received and send electronically, have a liquid market in the perceived range of received payments and are unrestricted.
The arrangement is simple: whenever the bank receives for the account a different than the domestic currency it does not exchange for the domestic currency but credits in the currency it receives the transfer.
Multicurrency accounts only work for electronic transfer not cash note payments. In Europe for example you can have a USD amount wired in but you can not withdraw that USD amount in cash notes without going through a double exchange (USD to domestic and then domestic to USD on a cash base). You can in such circumstances not desposit USD cash notes in the USD sub account.
In regards of exchanging currencies between the different sub accounts you are usually given a medium exchange traded rate plus .0010.
Some banks handle each currency through a different account, which means you have specific account numbers and you have to maintain the account seperately.
In a sub account situation the multicurrency account closes and opens through the disbursement or receipt of funds, the seperate accounts stay in place, have their own compliance handling and have a different cost schedule.
For people who use the multicurrency account for spot trading OANDA has a very cost efficient solution, but typically Forex banks have the same solutions available for you.