Do I Need to Open a Euro Account?

A question often asked by those who regularly transact in euros: "should I open a euro (foreign currency) account?" There is no single right answer to this decision; it depends on your transaction frequency, your amounts and account fees. In this guide we explain in which situations a euro account is sensible and how to decide.

The core advantage of a euro account

The biggest benefit of a euro account is bringing the currency conversion under control. In a local-currency account, every incoming euro is automatically converted into local currency and you pay an exchange-rate margin each time — and you cannot choose the timing. In a euro account, on the other hand, you hold euros as euros and convert to local currency only when you need to and at a more suitable rate. For someone with a regular euro income or expense, this can noticeably reduce the recurring margin cost over the year. For the mechanics of the exchange-rate margin, see the what is a bank exchange-rate margin page.

When is it sensible, when not?

Situation	Euro account
Regular euro salary / income	Usually sensible
Freelance euro payments	Usually sensible
Frequent euro sending	Usually sensible
Large euro transactions	Usually sensible
One or two small transactions a year	May not be needed

How do you decide?

A simple method: calculate your annual total euro transaction volume and the estimated exchange-rate margin you pay on these transactions; then compare this with the euro account's possible annual cost (if any). If the margin saving exceeds the account cost, a euro account is sensible. To see your estimated margin cost, you can use the exchange-rate margin tool.

Summary

A euro account is not mandatory; but for those making regular or large euro transactions, it is usually the most effective saving tool. The decision should be made by assessing transaction frequency, amount and account cost together. A euro account does not eliminate the margin, but it puts the timing and rate of the conversion under your control.