If you run a business or charity which receives international payments, or pays employees and suppliers based abroad, you may be considering getting a business currency account to manage your day to day finances.
A foreign currency business account is designed for companies, charities and other similar organisations involved in international trade, which regularly use a currency - or currencies - other than pounds sterling.
HSBC business customers can choose from a range of different foreign currency accounts for business, which offer specific business banking options. Some are designed for instant access to your funds, with features which make sending and receiving international payments easy. Other business currency bank accounts are more focused on saving, including term deposit accounts which require you to leave your funds for a fixed period before you can access them again. All accounts operate in one currency only - so you’ll select which, from the list of accepted currencies, that you want when you open the account.¹
Here’s a quick guide to the different business currency account options available to HSBC UK customers, including some insight into the features and fees you need to know about. We’ll also look at an alternative account for comparison - the TransferWise borderless account.
This account type is available for customers with small businesses, charities or corporate businesses with a turnover above £2 million per year. You can open an account in any tradeable currency, with no minimum or maximum deposit amounts. Depending on the currency you choose, you may receive interest payments. The amount of interest paid can change from time to time and may depend on the amount that you hold in the account.¹ Full details are available online in the account terms and conditions².
International fixed term deposit accounts are available for business and charity customers, and allow you to pay in a deposit for a set period of time. The interest rate is fixed at the point that you pay in your deposit, and will be paid when the term of the deposit ends.¹There are minimum deposit amounts applied - the level set is the currency equivalent of $10,000 for deposits made in US and Canadian dollars, euros, Swiss francs and Japanese yen, and $15,000 for all other currencies.¹ If you deposit over the equivalent of £50,000, you can’t withdraw it before the end of the agreed period. For lower amounts you can withdraw your money earlier, but with a penalty charge applied.¹
The client currency account is designed for businesses which hold deposits for their clients in foreign currencies. You may earn interest on the deposit, depending on the currency in question. This account is only available to certain businesses such as FCA authorised financial and credit institutions, and real estate companies.⁴
As part of your application for a business foreign currency account, you’ll be asked if you also want to apply for a linked debit card. This request will then be considered as part of your application, and depending on your circumstances, you could be issued with a card to make day to day banking easier.⁵
If you do receive a debit card, it’s worth looking at the fees and charges associated with it. There are some costs for making non-sterling payments and withdrawals using your card, for example, which you’ll want to consider.⁶ More on these later.
If you send money or receive payments in a currency other than sterling, having a foreign currency account can be helpful. By receiving and holding your funds in another currency, you can protect your business against fluctuations in the exchange rate, and limit or avoid some of the fees associated with international payments. Hold your money in dollars, euros, or any other offered currency, and then simply exchange your money when the rates look favourable.
However, as with any financial product, there are also some disadvantages you’ll need to consider. HSBC only offer single currency accounts, so if you trade in several different currencies, you’ll need to open multiple accounts to get the full benefit. This can become complicated and inconvenient to manage. There are also monthly account fees, and other costs which can eat into your profits.
If you’re saving in a foreign currency, it’s worth looking at the interest rates on offer, as some currencies may not accrue any interest at all - and you could be charged a penalty fee if you choose a fixed term deposit and then need to withdraw funds before the minimum term is up.
Here are the main fees you’ll need to know about if you’re considering getting an HSBC foreign currency account for your business. The full fees are available in the business banking price list⁶ (2018), which is published on the HSBC UK website.
|Monthly account fee||£5 a month - or the currency equivalent|
|Cheque fee||£1 for USD and EUR accounts, £4 for other currencies|
|Foreign note deposit or withdrawals||1% of the volume deposited or withdrawn|
|Non-sterling debit card payments||2.75% of the payment amount|
|Non-sterling debit card ATM withdrawals||2.75% + 1.5% of the withdrawal amount (minimum £1.75)|
|International transfer fees - non-SEPA||Using internet banking - £17 In branch or telephone banking, to another HSBC account - £20 In branch or telephone banking, to an account held with a different bank - £30 In branch or telephone banking, to a UK account, paid in a foreign currency - £30 Transfer arranged by post - £40 It’s good to know that you will also be responsible for third party fees incurred as part of the transfer - including SWIFT charges if applied|
|SEPA payments in the euro area, paid in euros||Receipt of a SEPA payments - £1 Sending a SEPA payment - £4 SEPA payment sent and returned to sender - £5|
|Internet banking - functionality to make international payments||£6 a month|
HSBC quote many of the fees and charges, which are applied to foreign currency accounts, in pounds sterling. This amount is then converted to the currency of your account at the HSBC exchange rate for the day, before being deducted.¹
Similarly, if you pay money into your account in a currency other than the currency of the account, or wish to withdraw money to an account held in a different currency, the HSBC exchange rate will be used.⁶ Let’s say you have a euro denominated HSBC business bank account, but need to withdraw some funds to your sterling account to manage your cash flow. In this case, the exchange rate applied to switch your money from EUR to GBP will be the HSBC rate in effect at the time.
You’ll be able to find the exchange rate for the day on the HSBC website, through online banking, or in a branch. You might want to see how it measures up against the mid-market rate, which is the rate you’ll find with a google search. Sometimes banks add a markup or margin to the rates they use, which means you don’t get the google exchange rate, and can pay more than you expect for an international transfer. There are ways around this, such as using a specialist provider for your cross border payments, like TransferWise. We’ll cover that a little later.
To open a foreign currency account for your business, you’ll need to visit an HSBC branch near you. Call customer services on the numbers below, or pop into your local branch to make an appointment.
You’ll need a UK sterling business bank account with HSBC before you are able to open a foreign currency account.¹ Check the full eligibility details before you attend your appointment.
Here’s how to get in touch with HSBC if you need more information:
- New customers can get in touch by phone: from the UK: 0800 032 1770, or +44 1470 697 032 from overseas.
- Existing customers can get in touch by phone: from the UK: 03457 60 60 60, or +44 1226 260 878 from overseas.
- You can also start a live chat with a member of the service team, via the HSBC website.⁷
- Get help in branch - find your nearest location using the HSBC branch locator.⁸
If you’re thinking of getting a foreign currency account for your business, it’s a good idea to compare some options, before you choose the one which you think will suit your needs. For many customers, a smart alternative is to get a TransferWise borderless account for business.
With a TransferWise borderless account for business you can:
- Hold your money in over 40 currencies, all in the same place, with no fees to get started, or monthly service charge to worry about.
- There’s also no minimum balance, and you can apply and manage your account online with ease.
- You’ll be able to bank like a local, with your own personal bank account details to receive payments made in GBP, EUR, USD, AUD and NZD for free.
- All currency conversion is done using the mid-market rate. That’s the rate you’ll find on google, and the one banks use when they trade currencies amongst themselves.
- TransferWise prefer to keep it simple. You just pay a small transparent fee, which is usually 0.35%-2% of the amount being exchanged. This makes it easy to see the true cost of your currency conversion - and it’s usually cheaper than relying on a regular bank, too.
- You’ll be able to get a linked TransferWise borderless business card for day to day spending and ATM withdrawals.
Whichever business foreign currency account you choose, make sure you check out all the features, and fees, so you know you’re getting the best option for you. Then you can get back to what you do best - running and growing your company.
All sources checked on 08/02/2019.
This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice from TransferWise Limited or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date.
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