Are there alternatives to double currency account to manage payments in different currencies?
I get paid in US dollars (USD), but I live in Hungary, where fiorint (HUF) is used.
Right now my bank account has two accounts, one in USD, one in HUF.
I receive the money on the USD account and I convert them to HUF when I need to spend them.
I do so because I don’t trust the fluctuations of the HUF and I rather keep my savings in USD.
This has the problem of the costs needed to convert the money each time, and the time it takes to convert them (it takes the same time of an internal transfer wire).
Are there alternative solutions to reduce time and cost?
Yes, there is indeed a great alternative for all European residents: getting a Revolut account. Revolut is a fully-online bank who’s main benefits include the lack of fees (with some limits) and a great exchange rate for all currency operations (better than what you would get at any brick and mortar bank in Europe). In your particular scenario it would work as following:
This is what I personally use to handle a salary in EUR while living in Czech Republic. Things might change in the future once they run out of investor money, but for now it’s the only solution I know for converting currencies without a loss.
You could use a Credit or Debit Card running in US $, drawing from your US$ account, and pay everything with it. If you pick a company with free foreign conversions, you would get the standard interbank exchange ratio every time you pay, with no fee.
For the small payments where credit cards are not accpeted or useful you can convert some cash once every some month – all significant amounts should work with credit or debit card.
Cheaper and faster are usually mutually exclusive.
If you want faster, nothing is faster than cash. I would recommend using an ATM to withdraw cash from your USD account as Florints and then use as appropriate.
If you want cheaper, then the cheapest currency conversion commonly available is foreign exchange / transfer services like OFX / XE Trade / Transferwise. Turn around time on these can be as little as a business day or two but more commonly takes a few business days, but they typically offer the best currency exchange rates at the lowest cost. If you must make regular payments to 3rd parties, you can set these services up to send the converted currency to a 3rd party rather than back to your own account.
Banks in certain countries are offering such facility. However I am not aware of any Bank in Hungary offering this. So apart from maintaining a higher amount in HUF, there by reducing the costs [and taking the volatility risks]; there aren’t many options.