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International bank accounts
International bank accounts can be a feasible solution for expats or people who want to invest abroad, but understanding them isn't easy. Here's how to find the right one for you.
Well, it can certainly be an option. Each bank has its own opinion on what its international customers may need (free money transfers, travel insurance, multi-currency accounts?), so brace yourself, because navigating your way around it is going to be complicated. Luckily, we’ve done some of the heavy lifting for you.
What are international bank accounts?
They’re current accounts that can be opened in another country and/or in another currency, usually through the international division of your bank.
They can be useful if you often need to move money between different countries, for example if you live in one country and get paid your salary in another or because you want to buy a house or make an investment abroad.
How do international bank accounts work?
At their core, these are still current accounts, so they allow you to make and receive payments and also come with a debit card. However:
- International current accounts are based in another country. As we said, they can be in another currency as well.
- They can be multi-currency. If you need to deal both in, say, dollars and euros, you can do it in the same place.
- They require a pretty high minimum deposit. Sometimes £25,000 or more. Other banks require that you have a certain sum invested or in a savings account with them. If you don’t meet these conditions, you may still be able to open an international account, but it’ll usually come with a monthly fee.
- They allow you to move money between your UK account and your international account easily and cheaply. Or at least they should.
- They can offer additional travel benefits. Such as airport lounge access or travel insurance.
- Related products may be available. Some international accounts also offer an overdraft facility and may allow you to access other international products, such as a savings account. Some banks also transfer your credit score abroad, so you won’t have to start from scratch and you can get better rates if you need a loan or a mortgage.
How much do international bank accounts cost?
If you meet the criteria required, you shouldn’t be charged any monthly fee. However, there are many other fees and charges you may incur. Before opening the account, you should make sure you’re clear on the pricing structure, when you’ll be charged and how much.
Here’s a basic list of possible fees you should ask about:
- Currency conversion fee/foreign currency transaction fee. What happens if, say, you open an international account in US dollars and then you use the debit card to go on holiday in Australia? Or if you try to send money from that account to a European bank account? Even with international accounts, you’re normally charged a fee, that can be up to 3% of the transaction amount. However, a good international account should scrap all the fees when you move money between your sterling and your international account.
- ATM withdrawals. Some accounts charge either a fixed fee or a percentage of the transaction when you use an ATM. If you withdraw cash in a currency other than your account’s main one, be aware that ATM withdrawal charges and currency conversion fees may add up to a very significant figure.
- Bank transfers. They should normally be free, at the very least for standard transfers between accounts in the same currency. Make sure this is the case and ask how much you’ll be charged to send a bank transfer abroad.
As with any other current accounts, fees will most likely apply for going overdrawn and for declined payments too.
How to choose your international bank account
The right international account for you will depend on your plans, so try asking yourself a few questions before comparing deals:
- Is the country you need covered? Banks sometimes only offer a limited selection of countries where you can open an international account.
- Should you go multi-currency? If you’re expecting to move again soon or if you want to invest in more than one foreign country, you may as well pick an account that allows you to handle multiple currencies at the same time.
- Do you meet the eligibility criteria? How much is the monthly fee going to be if you don’t?
- How much is it going to cost you? International accounts can have different pricing structures, so try to think about how you’re going to use it and do your maths to figure out the cheaper option.
- Which extra benefits can you get? Some accounts will come with travel insurance or other enticing perks.
Alternatives to international bank accounts
If international bank accounts sound too complicated for you after all, you can consider the following alternatives:
- A sterling account that comes with fee-free spending abroad. If you’re just, say, going travelling for a few months, you most likely don’t need an international bank account. A sterling account that doesn’t charge any foreign currency transaction fees will be much better for you; for example, challenger banks like Monzo and Starling provide it.
- Revolut or TransferWise. If you’re considering a multi-currency account, these two make a great alternative, allowing you to hold dozens of currencies at the same time. Revolut will be the cheapest of the two in most cases, but you can read our full comparison on this page.
- Open a standard bank account in your country of destination. If you’re moving abroad for good, this is the most logical option. Just make sure you’re aware of which documents you’re going to need – in some countries it may be more complicated than you think. If you need to make a one-off money transfer from your old to your new account, you can use a money transfer service.
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