If you are planning an overseas trip at the end of the year, save in a foreign currency and secure the current exchange rate.
Anthony Grant, CEO of FNB Foreign Exchange, says, “When you travel overseas you will need foreign currency to meet your expenses and the amount required may fluctuate according to the level of the exchange rate. By saving in currency, it cushions you against the fluctuation of the local currency by averaging the exchange rate over a period of time. This can protect you against sudden Rand weakness during the course of the year due to economic event risk.
FNB clients can use a Global Account to start saving now in the currency of the country they are travelling to. This way makes it easier to build up enough currency to cover travel expenses.
Generally, when people travel they save money in a Rand denominated bank account; however, it’s possible to put money aside in nine foreign currencies. In addition to this, travelers who have a Multi-currency Cash PassportTM can transfer funds from the Global Account and use the Cash Passport™ for making purchases and ATM withdrawals in USD, GBP, EUR, AUD while overseas.
“We note that travelers from South Africa are seeking greater global transactional ability. People work overseas, receive foreign investment income, make investments in many different markets and have families around the world. They expect to transact overseas with the same ease of transacting locally,”
“South African Residents, over the age of 18 may avail an allowance of R1 million per calendar year for any legal purpose, which includes investments, without having to produce a Tax Clearance certificate. Foreign investment as a foreign capital allowance up to R10million per calendar year may also be invested offshore subject to a Tax Clearance Certificate issued by SARS,” adds Grant.
“Before travelling overseas, conduct some research about the country you plan to visit and draw up itinerary of the activities and allocate a budget against each activity. In this way you will be able to determine how much you need to save for your travel,” concludes Grant.