Recent reports have shown that international banks are experiencing an increase in the number of foreign currency accounts being opened by Brits.
In order to try and safeguard themselves from political and economic instability, Brits are turning to overseas banks to look after their money.
Although good news for these banks, concern has been raised for customers holding cash in foreign currencies in the UK, who may be getting a poor foreign exchange (FX) deal when moving funds to other accounts.
Godi Financial, formerly OSTC FX, says that opening a foreign currency account alongside your standard current account could well be a prudent move in the current economic climate.
However, they warn that moving funds between these accounts with an unfavourable exchange rate can result in significant and unnecessary financial losses.
Having access to multiple foreign currency accounts can be an incredibly useful resource for private individuals with international interests living and working in the UK.
As the volatility in sterling exchange rates following the decision to leave the European Union continues to persist, especially with Brexit negotiations now underway, it comes as no surprise that there has been a rise in the number of people setting up such accounts.
Brett Thomas, head of dealing at Godi, notes the sheer drop in the pound alone has prompted many to seriously consider how their future currency requirements and obligations could be affected as the long and complex Brexit process unfolds.
He says: “There is no denying the convenience factor of logging onto your online banking and simply clicking the mouse to shift funds from your current account into your Euro Dollar account, but you could be paying a heavy premium for that convenience.
“Those that are transacting large amounts of money into or from currency accounts on a regular basis will be hit the hardest with this approach.”
“Banks are notorious for passing on unfavourable exchange rates to their customers, and so being caught unaware could mean you are needlessly giving away your hard earned cash by accepting the equivalent of ‘High Street’ bureau de change rates.
Instead, Thomas urges currency account holders to also consider how to manage their accounts effectively to avoid being left out of pocket.
“Using a broker is a much more cost effective way of moving money between currency accounts and sending money to beneficiaries. Godi focuses on educating clients on the best way to do this and creates a transparent strategy for clients so they are more confident with managing their money when faced with foreign exchange exposure.”
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