A reader asks: Which UK Banks offer the best deals for a current account that accepts deposits in euros or dollars, and the best exchange rates?
Answer: Most current accounts will accept deposits in euros or dollars, but they will automatically convert the currency into pounds. However, they may well charge you a fee and you are unlikely to get the best exchange rate.
If you want a current account that can hold both euros and dollars then many of the high street banks offer this type of foreign currency account including; HSBC, Barclays and Metro Bank. You will have to have separate accounts for your euros and dollars though.
If you are happy to do that then HSBC’s currency account has no monthly fee and it is free to transfer your money between HSBC accounts. You’ll pay €6 for online transfers to other accounts. If you convert your money it will be done at the HSBC Exchange Rate which is lower than the interbank rate.
Here’s how to open a free euro bank account if you only need to hold money in euros.
This year Starling Bank launched an interesting Euro account. It has no fees for transfers and if you need to exchange your euros into pounds or vice versa Starling uses the interbank exchange rate without any fees or commission. But Starling don’t offer a US dollar account at the moment.
Starling offer normal account features like a debit card, online banking and mobile access to your account through their mobile app. Meaning you’ll be able to track your currency accounts wherever you have your phone and an internet connection.
Starling also offer business account options if you’re looking to hold finance for your business in separate currencies.
If you want an account where you can hold your euros, dollars and pounds in the same place you need a multi-currency account. For this you may be better off looking to a currency specialist rather than a bank. TransferWise’s Borderless account allows you to old up to 40 currencies in the same place, including Euros and US Dollars. There are no fees for same-currency transfers and exchanges are at the interbank rate plus 0.35%.
The Transferwise borderless account offers a debit card which lets you spend anywhere at real exchange rates. You can access your account through the app or via the free online account that Transferwise offer when you set up your account.
However, TransferWise isn’t a bank so be aware that your money won’t be protected by the Financial Services Compensation Scheme. Instead your money is held in ring-fenced accounts so if TransferWise went bust your money should be safe.
Ruth Jackson-Kirby has been writing about personal finance for 15 years. She writes for The Sunday Times, Good Housekeeping, MoneyWeek and Moneywise.