This offers a low-risk way to earn a decent yield on our foreign currencies until we need to use them. Moreover, holding cash doesn’t generate any yield, resulting in an opportunity cost in this high interest rate environment.įortunately, we now have the option to maximise our foreign currency savings, similar to our Singapore Dollar, using a foreign currency fixed deposit account.
This might sometimes lead us to hold foreign currencies in cash, although it may not be ideal since we don’t use them as frequently as our local currency. These may include regular overseas payments due to business or family ties, hedging against exchange rate fluctuations, or diversifying our portfolio. In our increasingly globalised world, it has become common to deal in multiple foreign currencies for various reasons. You can view our full editorial policy here. DollarsAndSense.sg is not liable for any financial losses that may arise from any transactions and readers are encouraged to do their own due diligence. All views expressed in this article are the independent opinion of DollarsAndSense.sg based on our research. This article was written in collaboration with RHB.
