Whether you’re a digital nomad, an expat, or a frequent traveler, there’s definitely some logistics involved. You have to figure out what location works best for you, what your employment opportunities are and create a budget to make it all happen.
Once all that occurs, however, you will probably want to figure out the appropriate banking option while you’re living your life abroad. It can be a daunting task to know where to start but with some thoughtful research, you can find a banking option that meets your needs and offers the best benefits.
Why open a bank account in another country?
If you plan on being in a location long-term, you should consider having a local bank account. Having a local bank will certainly make it more convenient for you to engage in the local economy. Not only do you have access to a local bank branch, but there might be transactions such as paying for goods and services that are just easier if you have a local account.
A local bank account will also help you avoid the fees associated with foreign currency transactions, as well as make it easier for friends and family back home to send money directly into your account. It can also help to make some daily transactions easier. For example, it may be essential to have a bank account in the country you’re moving to in order to apply for rental properties. In addition, if you are employed by a local employer, it might be easier for you to get paid.
What Are Your Banking Abroad Options?
The good news is that these days you have several options. There are plenty of banks and credit unions around the world that will happily help you move money between countries, and it’s actually much easier than you might think. While we outline each option below, know that you can mix and match what works best for you and your situation.
Check out multinational banks
There are several banks that have a significant presence in multiple countries. You just need to find out which banks will suit your needs. Consider whether you want to use a bank that has branches across the world or if it’s better to stick with one that only operates domestically.
If you’re looking for an online service and don’t need face-to-face support from time to time, then you’ll probably be happy with whichever provider offers the best features at a reasonable price point.
Use your home bank’s services in your host country.
Talk to your current bank to find out if they serve your new location. If your bank does, make sure you ask about transaction fees. Your bank might charge you each time you use an out-network ATM, conduct a transaction in a foreign currency or use your card to make purchases at a local store. Determine how much it will cost you to use your current bank and then determine if you want to get a local bank as well.
Identify the local options Your Destination Country
To find a local option, you will need to investigate what is actually available. Each country has its own set of regulations, fees, and services offered by banks. Understanding these factors will help you choose the right bank that fits your lifestyle and financial goals. If you are completely unfamiliar with the local banking options, you may want to discuss with a local citizen to learn what the most common banks are in the region. Once you’ve done that, you may wan to to do the following:
Compare Fees and Exchange Rates: When choosing a bank, consider the fees and exchange rates associated with each bank. You don’t want to end up paying high fees for ATM withdrawals or foreign transactions. Some banks also offer better exchange rates than others, which can make a big difference when it comes to your finances.
Consider Accessibility and Convenience: Accessibility and convenience are also important factors to consider when choosing a banking option. You’ll want to choose a bank that has a network of ATMs and branches in your destination country. Some banks also offer mobile banking apps, which can make it easier to manage your finances while on-the-go. If it is difficult to access your funds, you may want to look elsewhere.
Look for International Services: If you frequently travel to different countries, you may want to consider a bank that offers international services. These can include currency exchange, international money transfers, and multi-currency accounts. Having these services available can make it easier to manage your finances across different countries.
If you haven’t already done so, open an account at a local bank and make sure it has access to international networks like SWIFT or IBAN so that people can transfer funds directly into it without being charged excessive fees by banks outside of their countries’ borders.
Gather the appropriate documents. You can anticipate that you will likely need to bring the following information including your full name, date of birth, proof of address, income and proof of legal status. You may also be asked to bring additional information including past bank statements.
You may need to bring multiple copies of each document, so make sure you have some extras in case they get lost or damaged in transit. If possible, carry an electronic copy or your phone or tablet so they’re easy to show when needed.
Plan to open the account in person. While some places may allow you to open a bank online, it may not be the norm in the place that you are moving to. You should assume that you will have to do it in person and unless told otherwise. While it may seem like a hassle, opening your account in person will also make it easier for you to get any questions you have addressed, especially if you’re unfamiliar with the banking system.
Other Financial Options for the Short Term
If you’re traveling for a shorter amount of time or taking your time to figure out what might work while you find the right bank, there are still plenty of options for transferring and withdrawing money, like credit and debit cards, and traveler’s checks.
Credit cards. Credit cards are a convenient way to pay for things abroad. They can be used to rent cars and book flights, as well as pay for food and drinks. Credit cards are accepted in most countries and offer more safety than carrying cash around with you, as they can be replaced if lost or stolen.
However, credit cards also have their own fees and interest rates which you should know about before using them abroad.
ATM Cash Machines
The old adage holds that “Cash is King.” and that still rings true. Many countries are not completely cashless, meaning that most transactions still involve bills and coins. The most common way to get cash while traveling is through an ATM machine (also known as a cashpoint). These machines are easy to find and use, but they do have limits on how much you can withdraw.
If you have a debit card, you’ll want to look for ATMs that say “Debit” instead of “Credit.” You can also use your credit card at some ATMs if it has been set up for that purpose in advance — check with your bank before leaving home so they can set this up for you ahead of time.
ATM withdrawals usually carry fees from $1-$5 per transaction depending on which bank provides the service.
The best way to get cash in your home country’s currency is with a debit card. Debit cards are linked directly to your bank account and can be used at ATMs or point-of-sale (POS) terminals, which means that you’ll never need to carry large amounts of cash when traveling.
When using an ATM, look for one that displays the Visa or Mastercard logo. These networks have more than 80 percent of all ATMs worldwide and are more likely than smaller ones like Cirrus or Interac machines, which may charge higher fees or provide less protection against fraud.
Traveler’s checks are a type of check that can be used like cash. They’re issued by banks and can be used in any country where the issuing bank has an office. While they’re convenient, traveler’s checks do have some drawbacks:
They’re not as easy to use as debit or credit cards because you have to carry them around with you (and remember where they are).
You need to make sure that there’s enough money in your account before buying them so that the transaction goes through successfully. If it doesn’t go through, then there will be an additional fee charged by both the bank and whoever sold those traveler’s checks to you.
If you need to send money while you are still figuring out your options, you can use an online money transfer. This is a service that allows individuals to send money electronically to another person or business using the internet. This service is provided by specialized online money transfer companies, such as PayPal, Wise, or Western Union, and is accessible through their website or mobile application.
Online money transfers are typically fast, secure, and convenient, and can be completed using a bank account, credit card, or debit card. Some online money transfer services also offer additional features, such as the ability to convert currencies or set up recurring payments.
By understanding the banking system in your destination country, you can choose a banking option that meets your needs and offers the best benefits. Don’t be afraid to ask for recommendations from other expats or locals, as they may have valuable insights into the banking options available in your destination country.