Recife, Pernambuco, Brazil

U.S. Banking from Abroad

August 18th, 2012 | Posted by Brianna in How To
Figuring out how we’ll handle banking has required some research.  Our permanent address will be in Kansas with Ian’s Mom, and we are ever so grateful for her willingness to make monthly deposits for us for clients who prefer to pay by check.  Once we had gathered a list of banks in her area, we started collecting information on them.  Our primary considerations when beginning our search were:
  1. International withdrawal and transaction fees
  2. Business checking fees and minimum balances
  3. Personal checking fees
  4. Online account and customer service accessibility
Sample Bank Research Spreadsheet

Click to enlarge for a glimpse of our bank research. We strongly suggest that you create your own version rather than utilizing these numbers as fees and requirements often change.

As usual, we approached this decision by organizing the information, sourced from websites and phone-based customer services reps, into a spreadsheet.  The first row featured the following category names: Bank, Business Checking Account Type, Maintenance Fee or Required Minimum Balance, Other Fees, International Withdrawal and Transaction Fees, Personal Checking Fees and Minimum Balances, Notes, and Sources.  At the end of the day, the fees and minimum balances for both business and personal accounts were fairly comparable and almost all had parameters available for waiving those fees.  It was the charges for access to our money internationally that really helped us to narrow down our choices.

Most banks charge fees for international expenses in two categories.  One is ATM withdrawals, and the other is transactions, which includes POS purchases made in foreign countries as well as purchases originating within the United States, but completed in a foreign currency.  This transaction fee is typically 3% with limited variations.  Our old bank from Kansas actually advertises a 2% fee on their website, but as a small, regional bank, their accessibility and long distance customer service, even just from North Carolina, was lacking.  ATM withdrawals can be charged in the form of a flat fee or percentage, and sometimes both *cough*bankofamerica*cough*.  For example, Wells Fargo charges $5 for every ATM withdrawal and US Bank charges 3%.  The choice of bank for travelers then becomes largely dependent on the amount of cash they’re comfortable carrying and how much they want to minimize the fees.  For withdrawals of $167 or more in this example, Wells Fargo provides the best deal.  For smaller withdrawals, US Bank does.

There are two other important items to note while trying to understand international charges from your bank.  One is that banks can change their fees all the time.  The numbers above may not be valid next year or next month, and you should contact your bank directly for the exact numbers as they apply to your account.  Second, the fees discussed above are only the fees charged to us by our bank.  They do not include the fees that the foreign bank owning the ATM may charge.  We will have to be aware and prepared for those as well.

We have taken the notes we collected, selected a bank, and opened accounts. We also plan to look into a credit card that may help minimize the fees per transaction by making a single payment per month should their fees be flat rate rather than percentage based.  We’ll let you know if we find a strong option here.  All that said, there is not a best bank or best answer.  All travelers needs, goals, and priorities are different and so will be their solutions.

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