If you are considering opening any of the foreign accounts in Ghana then there are a few things here you should be aware of.
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What is a foreign account?
Foreign accounts refer to bank accounts which are denominated in a currency different from the home currency. For example, any bank account in Ghana which is transacted in a currency other than the Ghanaian Cedi can be classified as a foreign account. In Ghana, foreign accounts are generally available in the three major currencies: the United States Dollar (USD), the Great British Pound (GBP), and the European EURO (EURO). Just like the local currency accounts, foreign accounts can be similarly opened as either a current or savings account although the savings accounts attract very less interest rates.
Why foreign accounts?
Foreign accounts have become rooted in the Ghanaian banking system for many reasons. The frequent foreign transactions by Ghanaian businessmen and traders make foreign accounts attractive to securely transact in foreign currencies. Day in day out, we witness many individual Ghanaians and corporate organisations engaging in the import and export of various products that require the exchange of foreign currencies. Besides importers and exporters, many individuals also come to a point where they have to make payments in foreign currencies. For example, students studying or planning to study abroad are required to pay their fees in foreign currency.
Unfortunately, the Ghanaian currency has been quite unstable over the past years making it expensive to cover such foreign transactions. Having a foreign account tend to avoid such currency fluctuations and allow consistent financial transactions over the long term.
Foreign accounts have also become a form of lucrative investment medium for some people. By holding a foreign currency such as the US Dollar for a period of time, there is the hope that it will generally appreciate against the local currency (Ghanaian Cedi). For security wise, people with such an investment mind-set hold foreign currencies by depositing in foreign accounts. They then convert them to the local currency when there is an appreciable increase in the exchange rates.
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Types of foreign accounts
There are basically two types of foreign accounts at the moment: Continue reading “Foreign accounts in Ghana: What you need to know”