The recent global financial meltdown has forced many banks to foreclose on their commercial real estate assets. This in turn has forced banks worldwide to reduce their commercial real estate loans by as much as 40%. If you have been keeping up with the real estate market recently, then you probably saw how banks have been selling off their properties. While the economy is slowly recovering and home values are on the rise, it is still a buyer's market. Many buyers are unwilling to invest in property at a depressed value, due to worries that they may not be able to recoup their investment when the housing market turns around. Unfortunately, for the average bank credit card user, their hard-earned cash is stuck in the "red zone".
So what can you do? There are two viable options: you can keep your money locked up in a low interest rate CD, or you can get out into the forex trading market. Both have their pros and cons, but for most people, the option of leaving their money in the hands of a forex broker seems like the best one. Here is a look at how banks handle forex trading accounts and how they can benefit you.
Banks are very conservative when it comes to opening an account for a client. Typically, brokers must have an active broker account opened with the banks for them to open a trading account for their customers. In most cases, banks only allow brokers with a BBB rating to open accounts for their customers. A BBB rating is based on several factors including the quality of financial advice provided, the reputation of the brokerage firm, and the firms' ability to screen their clients to ensure their ability to deliver quality advice.
Once a broker has been approved to work with a bank account, he or she will be given instructions on how to properly manage the account. For example, the client will be expected to write checks for the amount of money being transferred to his or her account. The bank's customer service department will typically be the place where the check is written. It is important that the client be sure that the checks are sent out on time to avoid having large bills from foreign currency transactions pop up. Clients need to also be careful that the checks do not bounce because there is always a fee for bouncing checks.
Another factor banks use to screen their customers is whether or not they have a high risk tolerance for forex trading. There is a cap on the maximum amount of risk a potential account holder can take. This cap is usually around five percent of the account's value. Banks are required to stay within this amount, so they will not be able to exceed it. There are some brokers that have access to accounts above this level, however.
If a customer doesn't have a high tolerance for risk, he or she may not be able to open a trading account with a bank. Most of the time, banks will require a minimum deposit to open an account, and some will require a credit application. Any broker can offer the account, so it is often a good idea to check around with a few banks and find out who will be able to provide the best service to someone new. It helps to have a bank that someone trusts, as this is usually one of the first places that they will look when opening a free account.
When choosing a bank to do business with, customers must consider how easy it is to get a hold of their money. A good bank should be easily accessible via email, and an assistant should be available twenty-four hours a day, seven days a week. People often get suspicious when their accounts are not in view or accessible when they are supposed to be. If a broker cannot be reached or is inaccessible, then it is best to go with a different bank. It is also a good idea to ask how long it will take to transfer funds.
Fees can vary between banks and brokers. While most banks do not charge any fees, a few will require a fee for new customers. Other fees may be required for balance transfers, as well as ATM usage. Banks Forex offers many services for its customers, and most banks should be able to assist a customer in any way that they can. It may take some time to find a good broker, so it is a good idea to shop around until a company is found that is acceptable to the customer.