Whether a multi-currency account is safe or not means looking at a variety of aspects of what the safety of your funds means. It involves regulation, fund protection mechanisms, operational controls and your own usage patterns, so it is not exactly a straightforward answer.
Multi-currency accounts offered by reputable providers are regulated financial products. That regulation imposes requirements around capital, safeguarding, reporting and consumer protections.
Regulatory Oversight
The first safety check is whether the provider is authorised by a recognised financial regulator in the jurisdictions where it operates. Regulatory status should be publicly verifiable, and any regulated multi-currency account provider, whether it is an EMI or a bank, is required to comply with conduct rules and financial supervision.
Fund Protection Mechanisms
If the provider operates as an EMI, customer funds are typically safeguarded by being held in separate accounts from the company’s operating funds. So, the provider couldn’t use your funds to shore up the business if it had any problems, which reduces the risk of those funds being used for corporate liabilities.
However, safeguarding does not usually equate to deposit insurance. The structural difference is important for users deciding how much money to hold and for how long.
Operational Security
Safety also includes practical considerations such as:
- Account authentication measures
- Fraud detection systems
- Customer support accessibility
- Transparency in pricing
Regulated structures don’t eliminate operational risk. So, users should still consider their provider, whether it is an EMI or a bank handles security and dispute resolution.
How you use the multi-currency account matters
Many expats use multi-currency accounts to move money rather than to store significant long-term balances. In this case, the account functions as a conduit rather than a savings vehicle.
For larger balances or long-term storage of funds, some individuals prefer to use traditional banks that participate in deposit protection schemes.
A Balanced Perspective
Multi-currency accounts are widely used across Europe, North America and Australia because they are so useful for international money management. The key is to research what is available on the market and then align the right product with your financial purpose rather than assuming one account will suit all scenarios.
If you would like to find out more about which multi-currency accounts might suit your needs, then please check out our multi-currency account comparison table.
