For expats that earn and spend money in different currencies, managing banking can be a complicated affair – but it doesn’t have to be.

Expats working abroad are often paid in a currency different to that of their home nation or the country they live in.

This requires having multiple bank accounts in one or more countries in multiple currencies, which can make for a messy and complicated banking setup.

This is exactly our situation – we’re paid in US dollars (USD), but need Malaysian ringgits (MYR) for our daily expenses, and have savings and investments in Australian dollars (AUD).

Thankfully, there are great banking options available to help you minimise banking fees, save on currency exchange fees and safely store and access your money.

Having lived overseas for the last few years, we’ve tried a range of different banking products. After some trial and error, here’s the banking approach that works best for us.

USD salary paid into multi-currency account in Australia

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If you’re this cashed up, then a secure and safe bank account is a must.

We have a multi-currency account in Australia that accepts US dollars, along with other major currencies.

This account, where my monthly salary is paid into, allows us to hold up to 10 currencies in one bank account, which has no monthly fee.

The benefits of having an Australian-based account that accepts US dollars are many.

It’s in a country that has strong banking laws meaning we feel safe to have our money stored there.

In the future, every time we change countries, we don’t have the hassle of setting up and closing a bank account. For example, we could have set up a US dollar account here in Malaysia, but we can only have this account for as long as I am permitted to work and/or live in this country.

Keeping my income in US dollars – instead of having all or part of it converted into Malaysian ringgits by my employer at the time my salary is paid each month – means we avoid converting our money when the exchange rate is disadvantageous.

Instead, we wait until the USD to MYR rate is favourable, and then use OzForex to transfer cash, equivalent to six months of living expenses, to our local Malaysian bank account (more on that later).

The long-term value of an Australian multi-currency account

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Australia is not only a beautiful country but one with a great banking system.

One issue we’re still grappling with is whether we’ll keep a multi-currency account in Australia in the long term.

Under Australian tax law, if you are a non-resident for tax purposes (as we are), then you need to show that you have cut connections to Australia and have created a life in another country. This includes banking.

We do this by only using the multi-currency account to receive and hold my salary, some of which is then transferred to Malaysia. We do not use the account for regular transactions.

Ultimately, in the long term, having a multi-currency account that is not based in Australia would be ideal.

We have researched a number of different options, including bank accounts in Singapore.

We want an account that is easy to set up, has low fees, and is based in a country with strong financial regulations – but we’ve not yet found an account that meets our needs.

USD exchanged into Malaysian ringgits using OzForex

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Having USD is great, but not when we need Malaysian Ringgits for daily expenses.

Around every six months, we transfer US dollars for living expenses to our local bank account in Malaysia. Ideally, we aim to time this with when the exchange rate is favourable.

We don’t do this using our Australian bank’s exchange services. 

This is because our Australian bank cannot directly exchange our USD into MYR. To get Malaysian ringgit, we would have to first convert our USD into AUD, after which they could convert it to MYR. This would involve two currency exchanges at the bank’s set exchange rates, which have huge spreads, making it a very costly endeavour.

Instead, we use OzForex, a currency exchange service that offers some of the best exchange rates available.

OzForex has very low spreads between their buy and sell prices. By virtue of their attractive rates, they do a large volume of trades, which is how they make profit. This is unlike traditional exchange services who rely on big spreads to make money.

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Imagine an ATM that dispensed sprinkle cupcakes… mmmm.

Setting up an OzForex account can be done online and is relatively easy.

From memory, it takes a few days to set up the account because you need to provide various forms of identification, which have to be verified by their compliance team. An OzForex staffer also needs to call you to briefly discuss your reason for setting up the account.

Making a trade is easy and can be done online.

For your first trade, an OzForex employee will call you to confirm the trade, but this is not required for subsequent trades.

When doing a money exchange, it can take a number of days between transferring the money to OzForex and it landing in our Malaysian bank account.

This is because we have to transfer USD from our Australian account to OzForex, which can only be done as a wire transfer and is therefore not done instantaneously. OzForex then needs to sight and process the funds, which can take 1-2 days. It takes another 1-2 business days until we receive it in our Malaysian bank accounts.

One thing to note is that you need approval for each currency exchange you intend to do – for example, USD to MYR.

Interestingly, OzForex doesn’t exchange MYR to AUD, as our Australian friends discovered when trying to exchange their money back before moving home.

So, while OzForex makes exchanging money very easy and at rates much better than the banks, their service is only available when going from big currencies to smaller ones, not the other way around.

Store MYR in a local bank account for living expenses

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We need money for daily expenses but certainly not to buy brussel sprouts.

We keep our Malaysian ringgits in a transactional bank account at a Malaysian bank.

We chose them because they had lots of branches, which we figured would make it easy if we ever had to go into the branch (surprisingly, this has been more often than we expected).

Their fees were the same as all the other local banks, and we were impressed that they set up our bank account and issued us a bank card all within 30 minutes.

They also have a great range of promotional discounts at restaurants and the option to earn frequent flyer points if you use their credit card.

So, when choosing a local bank account, pick one that works for you. But make sure it has low fees, or at least the same as the other banks, and secure banking services.

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Spend a lot on weekly groceries? Find a bank card that gives you discounts at the shops.

For expats, banking can be a complicated affair.

But it doesn’t have to be.

We’ve found our system – of having a multi-currency account in Australia, using a low-cost currency exchange provider and having a transactional account in Malaysia – to be a secure and reliable way to store and access money without high currency exchange fees.

We hope that this information helps you to do the same.

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