Hedging advantages of holding a euro savings account

A euro savings account is an offshore or overseas account that can be opened by people from the United States of America without having to move to Europe. As the name indicates, the account will be held in one of the 16 of the 27 member nations of the European Union where the euro currency is in force.

The euro is currently the second largest reserve currency in the world after the dollar. There have been talks that this currency might in fact over take the dollar in coming years given the fact that more countries in the European Union will start adopting this currency. The euro zone is in fact the second largest economy in the world according to IMF estimates in the year 2008.

In order to open a euro savings account, all you need to do is contact one of the international banks which have a branch in the euro zone. Try to establish all the terms and conditions via phone and then finalize the deal. If you are investing a large part of your nest egg, it is always better to go there personally to oversee the establishment of your savings account.

The euro is a currency which is accepted even in some countries outside the euro zone as legal tender. In fact many sub Saharan African and Middle Eastern countries have pegged their currencies to the euro. And Iceland continues to be the only North American region which is loosely pegged to the euro. Given the fact that the euro has such a wide reach, your investment cannot go sore given that you make sure that it is a simple vanilla savings account? But again, you need to decide whether you just want a savings account to hedge against local market trends or whether you actually want to exploit European market conditions.

If you want to do the latter, you need to attach a trading account to the savings account. This is not as easy as just opening a savings account. You will most definitely not have control over the trading options personally, but this is not to say that it cannot be done. With sufficient research and dedication, you can get a personal trading account. Else for individual investors, it is always better to get into a mutual fund. This way you can get all the benefits out of the European trading zone without actually having to trade personally and at the same time if you go for a low risk investment option, you need not worry about dangerous down swings either.

The recent Greek tragedy is one such occurrence which has put fear into the minds of people who invested in Europe. There is a lot of talk and paranoia about Europe going the way America has gone with its finances. But it’s just too early to talk about any of this right now. The best bet you would have as of the moment is to diversify as much as possible and then wait for the right moment where you can start digging deeper into a certain market once you have ascertained that it is going on a bull run.