Banking Down Under
 

My daughter will be spending the next 5 months at the University of Queensland in Brisbane. I am trying to determine the best/cheapest way to handle day to day financial needs. She has a visa card she can use for purchases, but she will be charged a 3% foreign currency charge each time she uses it. She also has a debit/ATM card she can use to withdraw cash, but she will be charged $8 per transaction for using another bank's ATM machine.

It seems to me that a better approach may be for her to take traveler's checks or a cashier's check with her that she can use to open a local bank account once she arrives in Brisbane.

Thoughts?

My daughter studied in Canada and we used a bank alliance that doesn't charge for ATM withdrawals, she was able to make all her withdrawals from her Westpac account at the ScotiaBank.

I don't know where you are living but the the alliance is Westpac (Aust), ScotiaBank (Canada), Bank of America, Deutsche Bank (Germany), BNP Paribas (France) and ABSA (S. Africa).

If you live in any of these countries, open an account with an ATM card for your daughter (at the bank named above) and have her withdraw the cash as she needs it. The buy/sell rates should be exactly the same as for a TC or draft plus there will be a charge for issuing the draft.

In order to open an account in Australia, your daughter must provide 100 points of identification which can be tricky of she doesn't have a history in Australia, however it appears there is dispensation of the account is opened within 6 weeks of arriving.

Westpac has a site on moving to Australia and opening an account but it requires being a resident for at least 12m. http://tinyurl.com/3u362g

Where are you from? Here's a list of credit card and ATM foreign exchange fees for US based accounts http://flyerguide.com/wiki/index.php...reign_Exchange

Perhaps she could open accounts with lower fees.

I'd contact the international student centre at UQ to ask their advice. Most Australian universities have a specific unit that deals with exchange students, and as this problem must come up very frequently, they may have already researched the easiest solution.

Thanks for all the helpful replies.

Based on the info provided by Sarvo, my daughter will not be able to open a local bank account in Brisbane - at least not at a Westpac bank since they require the relocation to be for a mimnimum of 12 months, but I agree with Susan that there must be some option available to foreign exchange students and will check with AustraLearn.

Home for us is in the US so the link provided by Patty was especially helpful.

Thanks again!

Couldn't you just open a Bank of America account for her here in the US, then she can use her ATM at Westpac? You can then put more money it as needed right here in the US. Tons of Westpac ATMs, and they are recipricol (can't spell) with BofA.

I wouldn't bother setting up an Australian account - it will be much cheaper to use a BOA account through Westpac. Bank fees are pretty high here if you don't have substantial amount to deposit. Westpac branches and ATMs are everywhere.

As others have said: Open a Bank of America A/c for your daughter. She can then use the ATM card for that account at any Westpac Bank ATM - and they are very common throughout Australia, even on the U of Q campus itself.

Here is the url for the Westpac ATM locator:
http://www.nowwhereroute.com/Westpac...a/default.aspx

Based on the info in the link provided by Patty, it looks like opening a BOA account would still result in some heafty fees (3% on credit card transactions and 1% + $5 on ATM transactions). Unless I am missing something, it looks like the best alternative is for my daughter to open a Capital One account (0% on credit card transactions and 0% on ATM transactions).

Let me know if you think I am misinterpreting the data. Thanks!

If you open a BOA account you will not pay transaction fees. That's the point of the alliance.

This is copied from the BOA website:

Use your ATM card or Check Card within our Global ATM Alliance in the countries shown with no fees.

Barclays (United Kingdom)
BNP Paribas (France)
China Construction Bank (China)
Deutsche Bank (Germany)
Santander Serfin (Mexico)
Scotiabank (Canada)
Westpac (Australia and New Zealand)

The 1% foreign currency rate is charged by all banks when changing money.

She will be charged fees by all Australian ATMs if she uses a Capital One debit card.

I don't have a BofA account but I believe you're only charged those fees for ATM use outside of their correspondent bank network.

<i>You are charged only the interbank exchange rate at Bank of America's correspondent banks: Barclays (UK), BNP Paribas (France), China Construction Bank (China), Deutsche Bank (Germany), Santander Serfin (Mexico), Scotiabank (Canada), Westpac (Australia and NZ). The $5 and 1% fees are waived at these banks.</i>

For credit card transactions, she would be better off with Capital One.

Try a search on the Europe forum as well. Lots of discussion on foreign exchange fees there.

<i>She will be charged fees by all Australian ATMs if she uses a Capital One debit card.</i>

Sarvowinner,
What do Australian banks typically charge for ATM transactions?

The Austrailian ATM owner institiutions may chage a fee, but Capital One says they refund that charge so long as you keep an average balance of $1000 in the checking account likned to the debit card.

I guess the only other variable is the exchange rate used by each bank, but I don't know how to determine which bank may offer the best FX rates on a consistent basis.

Just keep in mind, everything is upside down in Down Under, so your $99 will become $66 there!

:-p

&quot;The banks have an agreement with the Reserve Bank of Australia to remove interchange fees and instead charge the customers of other banks directly, disclosing the fee at the time of withdrawal and allowing cancellation of the transaction without charge if the fee is too high.&quot;

THe charge is around $2.00.

Thanks.