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International Banking

International Banking

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Managing your wealth in multiple currencies

If you’re working abroad or making payments in a different country, an offshore bank account can help.

If you’re living and working abroad, you may be receiving pay in a different currency to the money you have in the bank back home. Likewise, you may own a property in another country, and be continually dealing in the local currency there.

Offshore banking can help, giving you the ability to easily manage your finances, even when you’re using several different currencies.

Using different currencies

Currencies can move in value against one another, often quite sharply. If you get caught on the wrong end of such fluctuations, it could be expensive.

In October 2015, for example, £1 was worth around US$1.53. A year before, a pound would have bought you US$1.63. So paying a US$1,630 mortgage bill on your US holiday home in October 2014, say, would have cost you £1,000. A year later, the cost would have been just over £1,065. Exactly the same bill costs an additional £65, or 6.5%, simply because of movements in the currency market. 

US Dollar vs. GBP Pound over the last year

If the £1 had fallen to US$1.43, the same bill would have cost £1,140, an additional £140 compared to the original cost when the exchange rate was US$1.63, or 14% more. Likewise, if it had fallen to US$1.48, the bill would be £1,101, or 10% more. 

Foreign exchange fluctuations can work in your favour too, of course.

Foreign exchange fluctuations can work in your favour too, of course. Had the pound risen in value against the dollar over the same 12 month period, the cost of your bill in sterling would have come down, rather than increased.

The problem with currency markets is that they’re extremely unpredictable. Most people don’t want to live with this level of uncertainty about how something so completely out of their control might affect their finances. And trying to second-guess the currency markets is fraught with difficulties.

Ways you can manage your wealth

People working overseas and earning in another currency might need to meet financial commitments back home for the foreseeable future. If you’re paying school fees or a mortgage, say, in a different currency to the currency in which you receive your income, an unexpected foreign exchange fluctuation could be problematic.

While currency fluctuations make it more complicated to manage your finances, there is a range of solutions available to reduce the risk of losing money if exchange rates go against you.

You can hold different currencies at any one time, for example with an offshore bank account or multi-currency savings accounts. These can help you spread your wealth across currencies, reducing your risk of being caught out if one currency falls in value. Even so, remember that this might not be enough to prevent you losing money if exchange rates go against you.

There are also a number of different tools and services available to help manage this uncertainty. You can keep a close eye on exchange rates through email alerts, FX tools and other online tools. You can track currency pairs in real time. You might also want to consider setting up the account so as to move money from one currency to another if exchange rates hit certain trigger points, for example.

You should also have access to as wide a range of currencies as you need to manage your affairs.

You should also have access to as wide a range of currencies as you need to manage your affairs. Some people will have much more complex requirements than others. The exact services you require will depend on your individual circumstances and how you plan to manage your finances in the future. Look at the requirements you have now and how these may evolve over time as your plans develop. Remember that you may be required to declare the income from your offshore bank account in the country where you are tax resident.

The foreign currency markets are difficult to anticipate, but there are sensible steps you can take to protect yourself from the worst effects of even the most unlikely fluctuations. 

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We make it easy to manage your wealth outside your home country.

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Want to know more about how we can support you in the UK?

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Our offshore banking and savings accounts help clients around the world look after their wealth offshore.

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Barclays seeks to ensure that the information published on this website is as accurate as possible. Please note the information on this website does not constitute legal or professional advice. Barclays accepts no responsibility for the contents of any pages referenced by an external link. Any references or links on the website to external organisations or websites are provided for the purposes of ease of access. Such links should not be taken as an endorsement of the contents of those external websites or of those organisations.
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