You can often find some of the best savings rates in foreign market savings accounts. Researching savings rates on the global market can be a bit intimidating, but it’s one of the best ways to capitalize on strong currencies. Here, we’ll take an in depth look at foreign currency savings accounts.
How Foreign Currency Savings Accounts Work
You’ll probably have to do a bit of searching to find a bank that offers foreign currency savings accounts. Usually, large multinational banks will offer accounts denominated in foreign currencies. Keep in mind that a foreign currency savings account is very different from a foreign savings account.
A foreign currency savings account is simply a domestic account held in a foreign currency. An example: You live in the U.S., your bank is in the U.S., but you have a savings account denominated in Euros.
Investing in Foreign Savings Accounts
A foreign savings account is a foreign account held in a foreign country. You can open direct bank accounts in foreign countries, as long as you qualify. Some foreign banks require that you establish citizenship or residence before opening a bank account. Others welcome foreign investment. Either way, it’s very important to familiarize yourself with a country’s banking laws before you invest there.
It can be advantageous to hold either type of foreign account. If you are concerned about the devaluation of the American dollar, then investing in a foreign currency is a great way to protect your money. You have to be careful that you don’t invest in a foreign currency that will tank, however. It’s important to be extra careful when investing in foreign currencies or foreign accounts. If you educate yourself, you can significantly increase your earnings through foreign currency savings accounts or foreign savings accounts.