Bank Account Alternatives
In the next article series, we are going to be looking at alternative ways to bank your hard-earned cash.
Businesses today need to think long and hard before just opening a business bank account with one of the main high street banks.
Why I here you ask, well the answer is because there are lots of cheaper alternatives out there. Just think with the money you could potentially save you could look to fund that new car you have been thinking about!
In this article we are going to look at my first bank alternative for business owners, the foreign Currency account.
Foreign Currency Account
Many business owners want to take advantage of the world wide wide. Whether you decide to buy or sell internationally it will not be long before your business is faced with exchange fees from your bank.
One thing you need to be aware of is that any fees associated with currency and exchange can be expensive and will have a direct impact on your bottom line.
However it does not have to be like that, should you decide to open a foreign exchange account. These accounts can provide you with a free way to receive and make payments.
So if you currently receive payments from your customers in USD, GBP, Eur and AUZ keep reading.
How does a foreign exchange account work?
First of all I must stress this is not a bank you can click on this link to check out how it works in more detail.
However, here is a video that will give you a quick overview.
How much could you save?
If your business sends £10,000 a year and receives just 5 international payments. Our independent research shows you could save nearly £400 each year with a foreign exchange account.
If your business sends £100,000 a year and receives 25 international payments. You will save around £2,668.50 a year with a foreign exchange account.
If your business sends £500,000 a year and receives 50 international payments
You’re will save up to £11,044.74 a year with a foreign exchange account.
For more details on the data just click this link to check out Transferwise foreign exchange account.
How did it all begin?
So how did it all begin, well like a lot of great businesses they start usually from a need.
Transferwise is no different, founded by two friends Taavet Hinnkus and Kristo Kaarman. Both friends experienced costly exchanges when transferring and paying money back and forth in alternative currencies.
Taavet was the first employee at Skype, so he was paid in euros, but lived in London. Kristo worked for Deloitte in London so was paid in pounds, but had a mortgage to pay in euros back in Estonia.
With growing bank fees and exchange rate markups. Every month they would get together and look up the actual exchange rate on Reuters, This resulted in Taavet putting his euros into Kristo’s Estonian bank account, and Kristo topping up Taavet’s UK bank account with pounds. This resulted in both friends getting the currency they needed almost instantly. It also meant that neither of them paid any extras fees or hidden bank charges.
Later they started thinking ! ‘There must be others like them… so they then started to build an online platform which could help people all over the world move money across borders without the bank fees. No Transferwise is a billion-dollar business providing foreign currency account to customers all around the world.
How does it compare to high street Banks?
As we have already established Transferwise is not a bank but how do they really compare.
|Open an account||Free||Free||Free||Free|
|Send £200 to EUR||£5.50||£15.90||£14.45||70p|
|Spend £200 on debit card in EUR||£7.66||£8.64||£7.66||70p|
|Withdraw £200 / month cash in EUR||£9.16||£9.64||£11.66||£0|
|Receive AUD, EUR, GBP and USD into your account||EUR Only||N/A||N/A||Free|
When you open a free account, you will instantly benefits from having a currency account in every country where you do business.
You do not need an overseas address, and every account will come with its own account number and BIC code, routing number, sort code or IBAN number depending on the chosen countries.
You will then be able to supply these details to your customers and receive payments in euros, pounds, US and Australian dollars with ZERO fees.
This provides a perfect cost effective solution for ecommerce business owners, online sellers and anyone who receives international payments.Once you open your free bank account you will then also benefit from cheap conversion rates. You can check out the costs of your next big purchase by clicking this link.
The conversion fee will depend on which currencies you’re converting, but typically, the rates are between 0.35% and 1%.
However, you will also have the option to hold and manage money in more than 40 currencies. This lets you avoid exchange rate movements and allows you to prepare for any future transfers.
If you work with staff all around the world, you will also benefit from being able to make batch payments. This will enable you to quickly make international and domestic payroll payments in one single click. Paying direct into your recipient’s’ bank account. Payments arrive around the world in 1 – 2 days.