Trade Finance Cover Account
In the dynamic world of (international) trade, ensuring secure transactions is very important. Using Trade Finance products can be helpful. You can arrange a Trade Finance product without using your credit facility by opting for cash cover as security for the bank.
The cash cover will be booked on a Trade Finance Cover Account. This is a savings account that is only intended for funds used as security for a Bank Guarantee, (Standby) Letter of Credit, or Documentary Collection. Funds within the Trade Finance Cover Account are securely blocked until the relevant underlying Trade Finance product expires.
The account is available in euros and in 22 common currencies and will in principle be opened in the currency of the underlying Trade Finance product. You only need one coverage account (per currency) for all your Trade Finance products.
Discover how our Trade Finance solutions can empower your business and facilitate secure transactions across borders.
Features of the Trade Finance Cover Account
The Trade Finance Cover Account explained
A Trade Finance Cover Account is an account that you use with our Trade Finance products to provide your business partners with extra security for business transactions. If you’re providing security through credit funds rather than a facility, we will reserve an agreed amount in a Trade Finance Cover Account. The account balance is blocked and you will be paid interest on the amount.
Extra security for business transactions
Trade Finance is a collective name for various options that enable you to address potential problems in a trade transaction. They include a (Standby) Letter of Credit, Documentary Collection or a Bank Guarantee. We will open a Trade Finance Cover Account for you if you decide to grant security for these products in the form of credit funds. The account will in principle be opened in the currency of the underlying Trade Finance product.
A Trade Finance Cover Account is a savings account intended exclusively to hold funds that serve as security for a Bank Guarantee, (Standby) Letter of Credit or Documentary Collection. The balance in the account is blocked. The account is available in euros and in 22 common currencies. It can be opened without additional costs for Private Banking and business clients.
Bank Guarantee as an example
By offering your business partners a Bank Guarantee, for example, you’re providing them with the security that they will receive their money, even if you fail to meet your obligations. This builds trust.
Good to know:
- You can arrange a Bank Guarantee without using your credit facility.
- You only need one cover account (per currency) for all your Bank Guarantees or other Trade Finance products.
The balance in your Trade Finance Cover Account is blocked until the Bank Guarantee expires. This is the security you provide to the bank in exchange for the bank providing your business partners with a Guarantee.
Who it’s for
The Trade Finance Cover Account is intended for Private Banking and business clients who require a Bank Guarantee, (Standby) Letter of Credit or Documentary Collection and need to block credit funds as security for this.
You need an ABN AMRO current account to open a Trade Finance Cover Account. We refer to this as the linked account.
Available currencies
A Trade Finance Cover Account is available in euros and in any of the following 22 foreign currencies.
- USD - American dollar
- GBP - British pound
- AED - United Arab Emirates dirham
- AUD - Australian dollar
- CAD - Canadian dollar
- CHF - Swiss franc
- CNY - Chinese renminbi
- CZK - Czech koruna
- DKK - Danish kroner
- HKD - Hong Kong dollar
- HUF - Hungarian forint
- JPY - Japanese yen
- MXN - Mexican peso
- NOK - Norwegian krone
- NZD - New Zealand dollar
- PLN - Polish zloty
- RON - Romanian leu
- SEK - Swedish krona
- SGD - Singapore dollar
- THB - Thai baht
- TRY - Turkish lira
- ZAR - South African rand
Interest
- We calculate interest on the funds in your Trade Finance Cover Account. The interest rate is variable and can be positive, negative or 0%, and can be changed at any time.
- The interest on a Trade Finance Cover Account in euros can vary per balance tier. Interest rates and balance tiers can be changed at any time.
| Balance tier | Interest rate |
|---|---|
| €0 to €25,000,000 | 1,25% |
| €25,000,000 to €100,000,000 | 1,25% |
| Over €100,000,000 | 0% |
Take a look at the current interest rates (in Dutch) for all our savings and current accounts.
- The interest on a Trade Finance Cover Account in a foreign currency is based on the basic rate minus a margin of 2.5%. Take a look at the current interest rates (in Dutch) for foreign currencies.
- Interest is calculated on the funds in the Trade Finance Cover Account each quarter on 31 March, 30 June, 30 September and 31 December. It will appear within several working days. You will receive the interest in your linked account.
Withdrawals
You can’t simply withdraw or transfer money from your Trade Finance Cover Account. The funds in the account are blocked and you can’t access these. On expiry of the Bank Guarantee, (Standby) Letter of Credit or Documentary Collection, we will transfer the credit funds held as security from your Trade Finance Cover Account to the linked account.
Conditions
These are the conditions of the Trade Finance Cover Account as of 1 July.
You’ll find here a clear list of the conditions for all your business products.
Dutch Deposit Guarantee Scheme
Funds in this account are covered by the Dutch Deposit Guarantee Scheme. This scheme guarantees balances up to €100,000 per account holder.
Find out more about the Dutch Deposit Guarantee Scheme and the cover it provides.
Questions
To find out more about the Trade Finance Cover Account, get in touch with ABN AMRO.
If you’d like to know more about our Trade Finance services, click here to see how we can help you with our Trade Finance products.