Foreign currency account for individuals
Foreign currency accounts are accounts in a currency other than rand held in South Africa in the books of a local authorised dealer bank. We currently offer two types of investments: call accounts and fixed deposit.
Advantages of a foreign currency account
Who may apply
Investment accounts may be held in euro (EUR), US dollars (USD) and British pounds sterling (GBP).
No joint accounts may be held.
USD400, GBP1 000 or EUR400.
How they work
A foreign currency account is not a transactional account. This means that payments to third parties are not allowed. To make third-party payments the money has to first be converted to rand before you make an outward payment via electronic transfer (international payment).
All transactions must comply with exchange control regulations.
Deposits can be made as rand or foreign currency transactions by transferring funds from existing accounts or by depositing a bank cheque or cash for the required amount in rand, which is then converted to the foreign currency.
Alternatively, a cheque or cash in the foreign currency can be deposited or foreign currency can be transferred from an overseas bank, which is subject to exchange control regulations.
South African resident individuals can keep funds received abroad in the following instances:
Unused travel allowances may not be deposited in a foreign currency account in terms of Exchange Control Rulings B.2 (B)(i).
Exchange rates used for deposits and withdrawals are at the ruling bank’s selling and buying rates at the time of the transaction.
Interest rates are linked to the London Interbank Bid Rate (LIBID) for the particular currency and term chosen. Rates are tiered in bands so the higher the balance the more interest you will earn. Interest is calculated daily and payable at month end.
Interest is paid on the basis of the actual number of days and is based on the day count convention linked to the currency of the account, for example, 365 days for GBP, 360 days for USD and EUR.
Interest is paid on maturity. You may choose to have your interest paid into your foreign currency account or have the rand equivalent paid into your rand account. You must give us at least two days’ notice if you want to have the interest paid into your rand account.
The account is used only for investment purposes and any transaction processed over the account will attract a transaction charge. There is no monthly management fee
On the call account option, you may choose to receive statements monthly, quarterly, half-yearly or yearly. On fixed deposit accounts you will receive a statement on maturity.
You may ask at any of our bureau de change or full forex outlets for additional statements but there is a fee payable.
Interest earned on the account is taxable.
We will send you a tax certificate (IT3B) once a year. We will also send an electronic record of the interest to the South African Reserve Bank.
Terms for fixed deposit
The fixed period options are 3, 6 or 12 months. A cancellation fee applies if you decide to withdraw the money before the term is up. The fee is made up of:
You must tell us two days before maturity whether you want the money paid out to you or whether you want to re-invest it. Failing this, the money will automatically be reinvested on an overnight basis until we get further instructions from you.
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