Foreign Perspectives

By far the most popular post on our Whole Earth Guide is the one detailing how to go about opening a bank account in America.

The reason is simple really: if you run an online business then sooner or later you generally find yourself in need of an American bank account. Unfortunately, the increased security measures in place post 9/11 mean that it’s not quite so easy to open one these days unless, of course, you’re living in America and therefore a considerable number of websites have grown up with the specific aim of selling you the required information.

Our site doesn’t charge for that information and therefore is increasingly popular as it provides exactly the same information that other sites charge anything from $5 to $250 to provide.

However, we’re sorely tempted to start charging for it too given some of the emails we’ve received demanding additional information and wanting to know why it isn’t on the site yet. What we’ll likely do is to charge for the hand-holding level of information or at least offer it for sale as the information on the above page is quite sufficient to allow anyone to open an account in America.

Popularity: 7% [?]

Not so long ago there were all kinds of restrictions on transferring money abroad due to currency controls that lots of countries had in place. They’re almost all gone now and it has become more of a natural thing for “ordinary people” to need to transfer money abroad.

Most of the time it’s due to holidays, of course, but an increasing number of us are becoming small scale international jet setters with homes in more than one country and with both of those come a need to transfer money abroad.

Holidays usually involve a different category of currency conversion in that you are on the spot when you need the money, the amounts involved are smaller and you probably don’t have a local bank account. However, whilst the amounts may be smaller individually, added up over the years they will come to quite a hefty sum. Also, many of those who holiday in the same country each year may be considering the purchase of a property there and so have that local account too.

Most people ignore the costs of all those international transactions to their detriment. One friend of mine found that almost 10% of his entire salary was going in such bank charges simply because he was living abroad and using his “home” account in exactly the same way that he always had ie lifting small amounts frequently.

Saving money on those transactions is usually fairly easy. If you don’t want to change your bank, check out exactly how they charge for use of credit, debit and cash cards abroad. You will usually find that debit and cash cards are more economic ways of getting cash than credit cards are in that you won’t be paying interest on the money. However, that’s not to say that they are cheap. Typically a withdrawal of £100 in the local currency will cost you £4 to £5 but note that this includes a fixed transaction charge so withdrawing £20 will cost you around £2 ie 10% whereas £200 would be about £7 ie 3.5%. You can eliminate these charges altogether if you use the UKs Nationwide Flexaccount as it has neither transaction fees nor foreign exchange charges.

It’s slightly better if you buy things, usually. Using a typical Mastercard or Visa card will only incur the foreign exchange charge ie buying £100 of goods will cost you £2.75 and that £20 item would be 70p. Therefore you should buy things with the card directly rather than lifting the cash to pay for them.

What about larger amounts ie if you’re living abroad or have a holiday home abroad? Well, if you follow our advice and get the Nationwide Flexaccount you can lift £500 per day which means that it’s quite viable to use that card in conjunction with a local bank account to transfer amounts equivalent to several thousand pounds. You certainly couldn’t buy a house in that way but it’s enough to fund the payments for electicity bills and the like.

If you are talking thousands, then the usual way is to ask your bank to do a SWIFT transfer. This will cost around £25 plus there’s a currency exchange charge (which isn’t widely available). However, that too can be eliminated in some circumstances. For example, if you bank with HSBC then you can do free transfers to an HSBC account elsewhere in the world but the HSBC Premier account that you need to avail of this costs £20/month (unless you have £50,000 or more on deposit with them) so it’s not as useful as it first appears. However, if you are buying in Spain, the Halifax run to a free account which offers free transfers from Halifax UK accounts to Halifax Spain ones. What’s less obvious is that this route gives you a pretty much free way from pounds sterling to euros anywhere in Europe as banks are required to transfer euros at the same level of charges in other European countries as they do domestically ie to get euros in an account in France, you could transfer from the Halifax UK to Halifax Spain and from there to a French bank.

Other options include the use of the specialised money transfer services such as HiFX (there are lots of similar services around.

Popularity: 5% [?]

When I put on my post about opening an American bank as a non-resident, I was amazed at the number of people who checked it out and of those quite a number would like to know how to open a Swiss account.

Opening accounts in both America and Switzerland used to be very easy but with increasing anti-terrorism legislation around the world many banks felt that they could no longer cope with the additional identity checks that the legislation seems to require of them. I say “seems” because it doesn’t really require any more of them than it does of someone living next door to the branch but they generally don’t make a whole lot of money on non-resident accounts anyway so it’s easier for them to use “the law” as an excuse to say no to non-residents.

However, for most “normal” countries all you actually need is a proof of address (ie an electricity or landline phone bill) plus a copy of your passport (usually this must be certified). More obscure countries sometimes ask for an apostile which is more of a hassle to provide.

For America, Switzerland and the United Kingdom, the only things required are the proof of address and passport. In the case of America, 9/11 has meant that the banks prepared to open an account with minimal hassle has reduced drastically but includes Bank of America, Citibank, HSBC and, the ever-present, e-trade. Aside from e-trade, it’s easier to open an account with one of these banks if you already have an account with them in your own country and you may have one already as Bank of America issues a lot of credit cards in Europe under the MBNA name.

In the case of the UK, it’s easier to open a non-resident account with one of the branches in the offshore islands (Jersey, Guernsey, the Isle of Man or Gibraltar) as they are more accustomed to dealing with non-resident accounts. Don’t worry about that “offshore” tag as those islands banking systems are fully integrated with the mainland.

For Switzerland it’s generally fairly easy though some banks will now refuse non-resident accounts due to the expense of running them whilst others will charge you extra. You cannot open an account with SwissPoste these days, despite numerous websites listing it as a possibility and indeed charging you for the privilege of providing you with the information. The major banks (UBS, Credit Suisse) will still permit non-resident accounts and are unlikely to stop doing so as a large proportion of their client-base is non-resident but now charge around SF 75 per year to maintain the accounts if you’re non-resident. However, if you just want a Swiss account by far the best appears to be via SwissQuote which is a free multi-currency account and offers the option of a debit card too (there’s a charge for the debit card).

What are Certified & Apostilles? To get a document certified, you usually just need to go along to your bank and have them stamp the copy and write “original seen” on it. Sometimes banks ask for it to be certified by a lawyer but usually a bank is sufficient for them. An apostille is a certification that the person doing the original certification is known and what’s asked for usually is a “state-level” apostille. This means, usually, that you need to send off your passport to the department of your home government which deals with international affairs (usually called the State Department but is the Foreign & Commonwealth Office in the UK) who will provide you with an apostilled copy.

If you’re interesting in more details on these options, either subscribe to this category here (international-banking) or check out the information on our Expat Banking site. I’ll be slowly but surely working through the various countries here and on that site, the next being Switzerland and after that probably the offshore British islands.

Popularity: 34% [?]