Every time you move money from a different currency or country, you could be losing money. Opening a euro account could be the solution
Maybe you live in the UK, but travel to Spain a lot. Or you’ve got a daughter studying in Berlin who needs books and food. Or you’re starting a new business in Brussels. Or you’re an online seller using international marketplaces around Europe.
The bottom line is that you make or receive payments in euros so much, you might as well have a euro bank account. It would probably make your life a lot easier, and it would definitely help you save money. But how do you find the account that’s right for you?
Let’s go over the basics.
How to open a euro account in the UK
Many high street banks now offer euro accounts to their customers. There are also “challenger” options from both newer banks and technology-focused finance and foreign exchange companies.
If you are looking for an account from a traditional bank, the best bet may be to go with your current bank, since many banks will only offer these accounts to existing customers. In addition, it’s worth knowing that some banks may insist on a minimum income threshold or a minimum amount held before you can open a euro account.
But nowadays, banks aren’t your only option. There are several new “fintech” (financial technology) companies that offer cheap, easy and fast ways to send and receive euros, and you can even open these types of accounts online.
How can a euro account help?
A euro account does exactly what you would expect it to do. It allows you to bank in euros – to both transfer and receive money.
It’s useful because if you have income in multiple currencies, or often transfer money to friends or family abroad, you often end up losing value on the transfers.
Increasing numbers of providers now offer euro accounts, so getting started with them may be easier and cheaper than you think.
Benefits of a euro account include:
Fee-free transfers to family and friends in the Eurozone
No currency fluctuation
Easier cross-border transactions
Secure money transfers
Separate local bank account numbers for the UK, US, and Europe (with the Transferwise Borderless Account)
The ability to hold many different currencies in one account (in some cases)
Helpful to people with international investment portfolios
Euro account options
Make sure you understand the fees on the account that you are opening. These may include set monthly fees or fees for transfers and for receiving money. Some accounts may require you to carry out a certain level of transactions every year. Certain currency accounts may also allow you to hold several currencies, while others allow only one.
Another option is the Transferwise Borderless Account, which lets you hold up to 27 different currencies in one account; when you convert one currency to another, it charges you one small fee. It also gives you local bank details in up to five countries. That means that when people pay you, or you pay them, it will be as easy as a local transaction for both of you. And there’s no monthly fee for using the Borderless account.
Things to remember when opening a euro account
Accounts with banks will give you the standard £85,000 per person, per institution protection if the bank goes bankrupt – but remember this will also include any other money you hold with the bank, so if you have large balances in several currencies you may need to spread this around different institutions.
If you hold an account with a non-banking institution, your money may not be covered under the Financial Services Compensation Scheme (FSCS). At minimum, make sure you understand what compensation you would be entitled to and whether your cash is ring fenced in a separate account from the money used for the day-to-day running of the business.
It’s also important to check the exchange rates you’re getting from your euro account. Some banks may artificially worsen this rate, adding a markup to their exchange rate while advertising low fees, so you aren’t sure what you are getting. Transferwise always offers the Reuters mid-market rate (the midpoint between demand and supply for a currency) with a small charge on top. They let you know exactly how much you’ll get before you start the transaction.