For those of us who live in countries different from where our funds come from, whether it’s a salary or a pension, the banking situation can be complicated. Even if you are able to move all your money into a bank in the new country, you might hesitate to do that if it doesn’t feel 100% stable or its exchange rate fluctuates regularly.

For this reason, many of us keep an account or two back in our native country, and also open new accounts in our adopted country. This seems like an ideal situation, until you realize that transferring money back and forth between the two banks (and countries) usually comes with substantial fees and commissions that can be as high as 10% if you are unlucky. There are ways around these fees for some people, or at least strategies to keep them as low as possible.

1 – Open a multi-currency bank account

Known for its expat services in particular, HSBC is among the banks that allows its customers to keep accounts in different currencies at the same time. They offer over 20 different currencies, which compares to most other international banks that only operate in the major currencies of the USD, GBP, Yen, and Euro.

You’ll need to maintain a decent balance to qualify, and of course there are some fees, but for most people they will be far lower than having to transfer money between currencies and banks with any regularity.

2 – Maintain high enough balances in both countries

Not a solution for those who live hand to mouth, or even close to it, this might be the best stategy for most people who don’t want to get rid of their old banks. My American brother has lived in Germany for about 15 years now, and he keeps most of his money in his German bank, but he still keeps an American account that our mother is a co-signer on.

Most of his expenses and pretty much all of his income is in Euros, but he still likes to buy some things from the United States and he travels there about once a year. So what he’s always done is kept enough money in the US account so he has enough that he doesn’t have to transfer funds more than once a year. Obviously, if he had to transfer money each time he wanted to spend dollars, there wouldn’t be much point to any of it. In his case it’s a couple thousand dollars, which earns interest and is plenty so he only pays fees once every year or two.

But don’t try to make money as a currency trader

I’m not sure why, but I’ve been keeping close track of many of the world’s currencies for about twenty years now. It’s something that fascinates me, I guess. When people have money in two different currencies at the same time, it can be very tempting to try to time the market by trading when one seems higher than it should be. I’ve even known a guy, who had no financial background at all, who decided he was going to make his living as a forex (foreign exchange) trader while he lived in Costa Rica.

As this recent article points out in greater detail, this is a bad idea. My friend in Costa Rica made almost a thousand dollars in a few weeks by trading on margins, and then things turned drastically in the direction he bet against, and all of his profit, and his original investment, were gone. He never mentioned forex to me after that.

I’m pretty good with money and I’ve literally been following this game for decades, and I know enough to know it’s a lousy way to try to make a profit, much less an income. It’s a zero sum game, minus commissions, so only a few people win while most lose and the banks earn their fees. You’d be betting against foreign bankers and investment brokers who earn part of their living by taking advantage of short term movements that might seem counter intuitive to you or me.

For example, as the US prints more and more money (quantitative easing), many people expect the value of the US dollar to keep sinking, but after years of this it still hasn’t. With the Euro about to collapse many people were sure its value would plummet, but it hasn’t. Japan and the UK actually have worse national debts than the US, but Japan’s currency kept going up, and the UK’s soared as well, though now it’s down about 25% from its recent peak. If you knew that all of this was going to happen then you might be the only one in the world. If you didn’t, it’s not a good time to start gambling now.

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