It seems a little odd that something so heavily utilised and relied upon by most of us can become so taken for granted, especially when you consider it underpins your ability to go about your daily life unhindered – whether it’s to pay for groceries, petrol, travel, clothes, or monthly bills such as your rent, mortgage and other regular commitments.
One thing is for certain, if it wasn’t there tomorrow, you would miss your bank account. Not the money held within it, although you’d probably be none too pleased if that wasn’t there either, but the services it provides that enable you to make a host of manual and automatic transactions.
Services taken for granted?
A less extreme way of looking at the significance of your bank account might be to consider what would happen if some of the services it offers weren’t there tomorrow.
Free banking, for example. If every time you used your debit card, or withdrew cash, or each time a direct debit was paid, resulted in a charge being levied, would it make you feel differently about the way you use your account? It almost certainly would.
And how about if you weren’t entirely sure which services might still be there and which might be gone, or which transactions were free and which carried a charge – would that feeling of uncertainty cause you any disquiet?
While such hypothetical eventualities are little more than conjecture for UK citizens living and working in the UK, for those embarking on relocation, these are more than “what if” scenarios.
Choosing the right bank account can make all the difference; yet do expats really consider the hidden costs when they set up the ‘nuts-and-bolts’ of their new lives abroad?
Here are some real examples of the costs and charges expats may encounter when banking in popular overseas destinations.
France
The majority of banks do not pay interest on your current account. Savings accounts allow you to earn interest on your money and there are two different accounts available:
• ‘Livret A’ an account in which you can deposit up to €15,300 for an unlimited duration.
• ‘Livret de Developpment Durable’ (sustainable development savings account). This account is tax exempt and interest rates are backed by government decree. You are able to deposit up to €6,000.
Basic banking facilities such as the provision of bank statements and cheque books are normally free, but it is when it comes down to transactions – including automatic payments and transfers – banks may charge on a per item basis.
They can also charge for a bank card, for which you may be billed on an annual basis. You may also be billed on a monthly basis for day-to-day account management, such as internet and telephone banking. These charges vary from bank-to-bank, but it is definitely something that you want to research before you move to France.
Spain
There are two different types of bank accounts available in Spain:
• A Resident Account can be opened in euros or another currency. Fees charged on this account may be cheaper than those charged on a Non-Resident account
• A Non-Resident account is given to people who do not have an NIE card (similar to a National Insurance Number in the UK). Both EU citizens and non-EU citizens can be issued an NIE.
Some banks will charge a set-up fee for new accounts and Non-Resident accounts will often not accrue interest. There may also be yearly fees, transfer fees, and fees for each debit card.
South Africa
South Africa will see an influx of expats in the run-up to the 2010 FIFA World Cup, with thousands of specialists coming in from overseas to work on the event. Many expatriates have conflicting experiences when opening a bank account in South Africa. Generally, only South African residents can open a bank account in the country; tourists and temporary residents are able to open a non-resident simple transaction account.
There are five major banks in South Africa and residents have a wide choice of accounts, which are divided into three different categories, with different charges and services available depending on the account chosen:
If you are relocating to South Africa you should consider speaking to an expert advisor before you leave the UK.
Financial lingua-franca
There are other factors which you should also consider when opening a bank account in a foreign country. The language barrier abroad not only affects communication with your new local community, but you may also need to have a good grasp of your new country’s language when you open a bank account.
Some banks do have forms and information online in English, but many do not. When you get to the branch you will also need to consider that the cashier may not speak English, so a grasp of the language – or getting to know a multi-lingual friend or expert who can help you to open your new bank account – is vital.
Currency matters
A large part of settling into your new home is accepting the currency. Kate Boulton has experience of living in South Africa, Norway, Borneo and now lives with her family in Austria. She explained: “I have found that once you move abroad it is more beneficial to stop converting currencies into sterling as you need to understand and accept how much things cost in your new location, rather than comparing how much you would pay for items in the UK.”
Moving to a new country is certainly an exciting and challenging option, but the most savvy expatriates benefit from researching and considering their banking options with care before the relocate.
Case studies
Linda Grytten relocated to Oslo in Norway 21 years ago. She works full time for the Norwegian Board of Health Supervision. Recently interviewed by Lloyds TSB International on the subject of living and working overseas, Linda said: “The language is not the only challenge of moving abroad. When I first moved abroad, everything was new, I had to learn many basic things, like driving on the right hand side of the road. But also things like how to use the post office and how the local banks work. I had to get used to lots of small things that you take for granted, but you find you have to re-learn.”
While there has been a trend for British retirees to relocate overseas and enjoy their retirement in a warmer climate, many expats will spend shorter periods of time living and working abroad, ultimately returning to the UK.
Take action before leaving
While there are undoubtedly many valid reasons to hold a local bank account in your new home country, such as wanting to assimilate, one thing is for certain – if it’s the first time you need to open an account that can look after your new international life, it can be easier to do so before you leave the UK than after you arrive in your new home.
This holds true from many perspectives. From being sure the information you need to open the account is available in English, to being able to pick up a phone or go into a branch and get detailed answers to your own specific questions, not to mention knowing you have the necessary ID at your fingertips to open an account, and being aware of what the costs and charges associated with an international account will be.
Ensuring your banking needs are going to be adequately met while overseas is a simple enough piece of advice, but depending on your requirements – the country you are relocating to, your proposed length of stay, the complexity of the transactions you will rely on, and so on – your bank account needs to become that taken-for-granted part of everyday life as soon as possible.
