Possibly a silly question, but how do multicurrency accounts at Taiwanese banks work? I opened such accounts at Standard Chartered and CTBC just in case, but haven’t used them yet.
Are they basically just a receiving account for foreign transfers (i.e., where the funds then need to be converted into TWD and transferred to the TWD account to withdraw) or is it actually possible to withdraw the foreign currency from them?
This would be for GBP and USD, plus maybe JPY. Specifically, I have ~1.5k USD sitting in my TransferWise USD balance and I’m wondering if I can transfer that to one of the multicurrency accounts (and then maybe withdraw it in USD).
Can use these accounts almost like foreign currency trading.
If you believe USD will weaken, buy a currency that it will weaken against, and then buy USD back at cheaper price.
But, as they say, your investment returns may vary.
If you want USD in physical form (say, 100 dollar bills), you’ll still pay a “handling” fee to the bank.
Yeah, this was somewhat the motivation for the question, at least partially. Most of my money is abroad anyway, but I thought it might be nice to have a little stash of foreign currency at home just in case.
That may well be the case, but I haven’t held multicurrency accounts in other places either and I happen to be concerned about the ones in Taiwan as that’s where I am, hence the question. If you detected some…bank account racism or something there, it wasn’t intentional.
A lot of Taiwanese people have these accounts because they are moving money between countries and I think they like to invest in certain higher interest rates and also currency aribtrage and derisking.
That’s what I do too. I’ve never actually gone into the bank and withdrawn foreign currency directly from one of those accounts.
It’s interesting how they work because one ‘foreign currency account number’ can hold many different currencies including NTD too. So it is a bit of a curiosity to me also.
I sort of doubt you would use a multi-currency account for forex trading (that is generally done with tons of leverage) but the above is probably most likely. You can’t really transfer TWD outside of Taiwan so if you need to move money out of the country, you MUST have a multi-currency account.
As far as physically withdrawing said currency while you’re still in Taiwan, you can withdraw USD at some Mega ATMs at the airport but it will take the money out of your TWD account (I don’t have an account at Mega so it just takes out the TWD equivalent). At the branch (I use HSBC) if I recall correctly, you can physically withdraw the foreign currency from your foreign currency account but think I’ve only done this a couple times (USD and JPY for trips to US and Japan)
But what stops China from taking over the banks and those accounts in the end anyway. It’s not as safe as they think. Likely the rich smart ones keep money offshore.
Doubt it has anything to do with a potential China takeover. If you’re rich, you probably want to keep it offshore to keep it away from the TAIWANESE government (ie. tax, inheritance, etc). Don’t think it’s a purely Taiwanese phenomena… Just keep what you need to use in Taiwan.
Another factor, is many Taiwanese business people make their money outside of Taiwan. In this case, there’s really no need to bring more than you need back to Taiwan
They use them to move money back and forth at will. As mentioned the NTD isn’t convenient like that.
I’m still interested in the actual mechanics of the process of a multi currency account.
I’m not worried about it personally because I’m poor but a miniscule potential of war could cause rich people to feel a bit jittery and want to stash their loot elsewhere.
Heck even the rich Chinese are buying overseas to give them more stability.
That is true, of course.
My meaning is that your money in any Taiwan bank will not suddenly disappear into coffers across the strait. Notwithstanding that, during any conflict, certain currencies may rise or fall in value.
There’s not much to it really. Again, I’m at HSBC so not 100% sure how it works at other banks.
You will have a primary TWD account, lets say 555-123456-388. When you have other currency accounts, there will sub-accounts to your main account, say 555-123456-821. When you go online to check, the functional currency of each account will be noted.
So you want to transfer money from your TWD account to your USD account (by clicking the transfer funds tab on the website). In Taiwan you have to do this during market hours (ie. you can’t do a TWD to USD conversion in the middle of the night). This is specific to Taiwan (and maybe some other countries as well). In HK, they provide 24-hr forex transactions so I could do this conversion whenever I wanted. In Taiwan, there is also a daily limit to how much you can convert each day (not 100% sure about other places)
The choice of currencies available are generally those that are fully convertible (can be traded on international forex markets) like the USD, JPY, EUR, GBP, etc. The TWD is NOT freely convertible (there are government restrictions on its use) which is why you can’t transfer TWD abroad… I cannot open a TWD account in HK HSBC and hence cannot transfer TWD there. I need to convert it to USD (or HKD) first (in Taiwan)
Something like this: a database table, account number as the primary key, currency as a field, and an amount against that currency. Typically there are transaction tables (HUGE), doing what you think they do, account tables holding positions at a certain date, and customer tables with all the details of the customer.
Even if it was a single currency account the currency would always be kept against the position.
Yeah but how it know what currency as you just have one account number. What happens if you transfer a currency and they don’t recognise it ?
How do they know that that money transferred is legit? Down the rabbithole…
Oh I see what you mean, I think there would be some product code and currency or other identifier which allows this record keeping. Something which the user would not see on their pretty internet banking web page though.
but a miniscule potential of war could cause rich people to feel a bit jittery and want to stash their loot elsewhere.
What happens if you transfer a currency and they don’t recognise it ?