It is getting easier and easier for anyone to protect your money from rand fluctuations and invest offshore. In fact, international saving is now so simple that you can put funds away in one of several currencies just by clicking a few buttons.
Absa clients can now open a currency account online, allowing them to save in 17 different currencies – such as the dollar, euro, pound, or even pula.
“Before we made it possible to save in foreign currency with just a few clicks, you had to go into a branch to open this type of account – and that meant waiting for between two and 14 days for the account to be opened,” says Daniel Buntman, Absa’s Retail and Business Banking head of international banking.
This, he notes, meant that the rand – known to be a volatile currency – might have shifted in between a client’s decision to save in foreign currency and when the account was opened.
Buntman adds online access also democratises, as he puts it, saving in different currencies.
“Most people just don’t have access to buy forex to save in, they usually have to go through brokers and open complex, costly accounts.”
Now, however, clients can invest in foreign exchange with ease and there’s no minimum amount, as long as the small money transfer fee is covered. Buntman explains the fee is a flat amount to cover exchange control costs, whether a client invests a few thousand, or a few hundred thousand.
“In fact, you can invest as much as R1 million a year without the need to provide the South African Reserve Bank with documentation.” The sophisticated platform has been more than 18 months in the making, and is set to grow in functionality. Because it is linked to a current profile, clients don’t have to queue to provide documentation such as a South African identity document, proof of address and a tax number, because the bank already has this on hand – as long as the information is up to date.
“In the future, we’ll be making it possible for clients to make online payments directly from currency savings accounts,” says Buntman. The functionality to pay out of your currency account is already available in almost 100 branches across the country.
In the meantime, it’s easier for people to hedge against the rand’s volatility by saving in different currencies, he says. Buntman adds it is also easier for people to save for international holidays. “You can save for your international trip over time, putting away some money each month, which eases concerns about currency fluctuations.”
This, he explains, will help reduce the stress of planning for a holiday. “We can’t eliminate the cost of traveling, but we will make it easier to go overseas and spend in the currency of your destination.” Over time, Absa will also build in the ability to transfer funds to its travel card online.
The Multicurrency Cash Passport card smartly matches the currency a shopper is spending to the appropriate pre-loaded currency purse, explains Buntman. It also means clients won’t incur international fees when shopping overseas. However, you can’t overdraw your international savings account, and the income you earn is taxable in South Africa.
“Currency accounts democratise savings because it gives you the personal freedom to quickly, easily and conveniently put some of your hard-earned savings in foreign currency – it’s all connected to your online banking and is quick and simple to use,” adds Buntman.
AUTHOR: JANICE ROBERTS
This article was originally posted at https://www.moneymarketing.co.za/how-south-africans-can-save-in-other-currencies/