Checking accounts in Europe

Old Apr 4th, 2006, 03:34 PM
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Checking accounts in Europe

Hi,

My husband and I, now that we are for the most part retired, hope to travel to Europe at least 2 times a year for the next several years. Because my DH speaks Itaian, French, and Spanish, and I speak French, we probably will center much of our travels on one of these countries.

When we travel, we use ATM and credit cards. We never use travelers checks any more. We are increasingly aware of the high fees the American banks get with each transaction. We were wondering if it is possible for non-residents to set up a checking account in a European country; we could add monies to it from the states or when we arrived in Europe. Is this possible, or is it a truly loony idea? If it is possible to set up such an account, would we then have to pay some sort of tax in the country that has the account?

We have Bank of America debit cards, which I gather from another post, we can use without much penalty. Does anyone else have any suggestions on how to deal with the euro/dollar exchange? Realizing that the fees are pretty marginal when one considers the entire trip, we are jsut trying to be creative.

Thanks,

Margret
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Old Apr 4th, 2006, 03:48 PM
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certainly not worth it for two or even several trips per year.

why?
-it can be difficult as you are not even a resident.

-you are hit with fees and loss on ex rate each time you do an xfer.

-you may need to report the existance of this account to your government...not just for tax but other paperwork.

-you will probably be taxed on the interest unless you go to an offshore bank like one in the channel islands...but the euro interest rate is next to nothing anyway.

-just not worth the hassle...you say that you don't have much fees with your bank now...exactly what "problem" are you trying to solve?
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Old Apr 4th, 2006, 04:10 PM
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Two trips a year is not worth the bother, imo. But I would make sure you have an ATM card with low or no fees.

My BoA debit card is $5USD per international transaction. And I know there are ways to get no-fee.

If you were living in Europe even part time you might want a different solution.
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Old Apr 4th, 2006, 04:18 PM
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Not worth the expenses you'll incur. I have a checking account in France and every time I send money to it I'm charged 18 euros. And having an ATM card pegged to it is no more useful than having an ATM from an American bank. My bank in the USA charges me nothing for a withdrawal in Europe, and I've never encountered a European bank that charged for a withdrawal with a debit card, so there aren't any hidden charges there.
I can't see any advantage at all.
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Old Apr 4th, 2006, 04:34 PM
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I guess I'm a little confused as to where you'd get the foreign currency originally to put into that foreign bank account. If you take a whopping big pile of dollars to put into it, aren't you going to have to pay the same "horrible" conversion fees for them to convert them to euro that you'd be paying anyway transaction by transaction? I guess I don't see any advantage. I think you'll probably be better off just keeping your money in your US bank account and using an ATM card there for withdrawals.

With your bank of America ATM card you're going to get great exchange rate on withdrawals, and if you find partner banks you won't pay any fees at all. Much better than handing a pile of dollars to a European bank and seeing how many euro they give you for them.
 
Old Apr 4th, 2006, 04:49 PM
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Well, I'm not so negative as most of the posters on this thread. I have had accounts in England and in the Netherlands in the past, and I found them to be quite handy. I worked in Europe, and deposited my funds earned there. Only kept a small balance, and refreshed the account when I was in country.

It is so much simpler to send a check in Pounds or Euros if you want to buy somthing, or place a deposit on an apartment, etc.

I just HATE it when I must pay my bank $30 to make a few hundred Euro electronic deposit to someone's account in Europe, only to find out the changed exchange rate, and/or the fees the recieving bank charges end up shortchanging the guy who is supposed to get the bucks. We then have to do a little dance to make up the difference.

Much handier to just send him a Euro check drawn on my Eurpoean bank. Wish, now, I hadn't closed the accounts.

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Old Apr 4th, 2006, 04:57 PM
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nukesafe, your post makes a lot of sense. But you are talking about earning money in the "local" currency and depositing there. I believe the original poster is talking about taking foreign currency and exhanging it at the bank for local currency and depositing. Big difference in my opinion.

And while it may be very convenient to have a local checking account, the poster seems to be concerned with doing it to save fees or expenses. Some of us just don't think that's going to happen.
 
Old Apr 4th, 2006, 05:01 PM
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I thought I might be a bit nutty. But, Nukesave expresses some of my thoughts, especially as we hope to spend extended periods of time in Europe over the next years. I thought it just might be "handy" to have such accounts, but that it might create more trouble than it was worth. Clearly, most of you think it is too problematic.

Thanks, all, for your suggestions and thoughts.
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Old Apr 4th, 2006, 05:11 PM
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Nepolitan is correct that I expressed wanting to set up the accounts to escape the fees. In fact, I am more interested in convenience while traveling. Also, when we come home from a trip, we spend time going over all the slips, checking exchange rates and working the euro/dollar conversions and then checking it all against the bank statements. I was thinking of doing something creative, as I said. I know the money saved would be insignificant.

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Old Apr 4th, 2006, 06:40 PM
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Why don't you just change to a bank that doesn't have such high fees? My credit union doesn't charge anything for any withdrawals, domestic or foreign. Our regular bank allows 4 free withdrawals from domestic or foreign non-network banks each month, then charges $1.50--doesn't seem all that high to me.
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Old Apr 4th, 2006, 08:08 PM
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Dear Margaret,

You have a very good idea. I would do it. Well actually, I did it and I still do it and I am very happy with it.

I have had four overseas bank accounts, three of them in Europe. My first one, and only remaining, is in Holland. I used this account partially during my January trip. I also used two bank accounts in the USA via ATM cards. I also used my Amex card. One of my ATMs was a debit card which I used as a credit card when making purchases where Amex was not accepted.

Like nukesafe, I opened my bank accounts while working in Europe, except for the Swiss account. Standard practice in Europe (it seems to be mandatory) is direct payroll deposit. So I needed to open bank accounts where I worked. Unlike nukesafe, I never canceled my Dutch, German, or Swiss bank accounts. I kept a nominal amount in all three after I left the jobs and the counties. Over the years the German and Swiss banks decided that my nominal amount was not interesting enough so they closed the accounts and sent me my balance. The Swiss bank didn't take action until after I had gone back to live in Geneva and had made good use of the account.

Fortunately the Dutch bank kept me on as a client despite my small balances. When I would go to Europe on irregular trips over the years I would transfer money or bring over cash for deposit and use the bank card (ATM card to Americans). The bank card was formerly called a Eurocheque card and later, at about the time the euro was introduced, it was called a Europas. I've kept my old ones as souvenirs.

The card I received this year is called a Wereldpas. It no longer carries the EC logo and Eurocheques are also a thing of the past. My account is a type they call 'personal account' and is denominated in euros. You can call ABN-AMRO, my Dutch bank, and see what they can do for you as an expatriate. Everybody at the bank speaks flawless English. As I understand it, English is the house language in Dutch banks. Stop in Amsterdam or Haarlem on your next visit and open an account. My branch is in Haarlem on Zijlstraat. The ABN phone number on my most recent statement is
+31 10 282 07 24. To make it a cheap call from the USA dial
10 10 987 011 31 10 282 07 24.

In the USA we have 'bank routing numbers.' In Holland you'll get a BIC code and an IBAN code. I do not know what those acronyms mean.

My card is a debit card with the 'Maestro' logo (looks like MasterCard with different colors) so I can use it as a credit card or ATM card. Within the Eurozone there is no fee for cash withdrawals. Your countries are all within the eurozone. Outside the eurozone the fee for purchases was 0.15 euro and for cash withdrawals it was a flat fee of 2.25 euros. This data is from my bank statement of January, 2006 so I am not missing some hidden fees somewhere in their small print.

Another nice feature of this card is that it is a 'chip card.' The chip is a small copper item with a dozen contact points imbedded in the face of the card. This works in many telephones and restaurants and other places that do not accept ATM cards or credit cards. It can be very handy. There will be a direct deduction from your bank account. I do not know the cost because I did not use that feature.

I never had a tax issue in 30 years with this account in Holland.

Remember that there is a $10,000 reporting limit on bringing cash outside the USA in one batch. What a farce. Criminals don't follow the rules. Only law abiding citizens follow the rules. The Italians and French formerly had such nonsence rules, as did other weak currency nations.

If you have further questions please respond on the forum. I will answer to the extent of my personal experience.

Even if you don't open a bank account in Holland, go on up and have a visit. Click my link above for traces to more threads with info on Holland.



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Old Apr 4th, 2006, 09:55 PM
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I have a checking account in France to pay local taxes. I discovered that it would be cheaper, but not more convenient, to use my American ATM card to withdraw cash from my French bank's ATM and deposit the money into the French account than to transfer money from the States in any other manner.
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Old Apr 4th, 2006, 09:59 PM
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Only you can work out whether such an account makes sense for you.

But do remember that Europe isn't a country. Even within the Eurozone, transactions outside your account's base country carry surcharges and are subject to delay - and EU authorities are too busy detroying the Eurozone economy to stop banks ripping citizens off this way. They keep on promising legislation, but little happens: the banks themselves just keep on skimming.

It's also the case that banks in Britain, Switzerland, Holland and the British-controlled European tax havens* are a lot more geared to creating Euro-denominated accounts for non-European residents than those in the countries you mention.

But most publish costs on the web, so a few days' googling should let you work out the real likely costs

*Jersey, Guernsey, Gibraltar, Isle of Man. British consumer protection laws normally don't apply here, so choose your bank carefully.
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Old Apr 4th, 2006, 11:18 PM
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You certainly can do this as a non-resident in France, and if you'll be renting apartments when you come it may be worth it, since the prepayments are always troublesome. There is no charge for checking accounts here. As for wiring money in, our bank, Credit Lyonaise, gives something very close to the market exchange rate. The key, as always, is to wire funds in dollars and have the conversion to euros done here, rather than at home. There will be a flat fee, of course. The big downside is funds sitting and earning no interest. At this point, there are virtually no French banks with interest-bearing checking accounts. Cortal is one that does offer interest, but it's very, very low, and as they are something of an exception in French banking I'm not sure of their policy on nonresident accounts. I believe there is one other bank that does, but I don't know it's name.
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Old Apr 4th, 2006, 11:45 PM
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Justretired, the advantages of having a bank account in Europe come into play when you own or rent, and pay for utilities, insurance, home repairs, and domestic services. I use a European checking account for that, but for most other things a US account will do just fine.

I can tell you this because I have lived in England for over 30 years, and own a home. I also travel frequently in other European countries. My strategy is to have a US bank account that doesn't charge for ATM withdrawals and has low foreign transaction fees. I use US debit and credit cards for most of my purchases and for all my cash withdrawals. I have a UK credit card primarily for monthly charges to internet providers, etc, but find I am using it less frequently for other things these days.

Why? Although I usually pay off my credit card balance each month, interest charges are lower in the US. Also, it is a pain in the @#&* to constantly transfer funds from the US to the UK (and European banks do charge you for those transactions).
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Old Apr 5th, 2006, 12:17 AM
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BTW, I am also retired (well, semi-retired) and pensions go directly into my savings and checking accounts. Through the internet I can transfer funds between accounts and pay off my credit card balances just as if I were back in the US. The bank pays me interest on my checking account balance, and I get cash back every time I use my credit card, and even when I use my debit card as if it were a credit card. My bank? USAA.
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Old Apr 5th, 2006, 01:58 AM
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from your latest post, i see that you are more interested in convenience than cost. this is good because it will cost you much more to maintain this account than to use your US account. unless you are transferring huge sums (ca $50,000+), you will probably get a worse rate than you will get using a US bank card. however much you transfer, you will be subject to charges for each transfer that can be $30-50. you will also lose interest as the euro interest rate is currently lower than USD.

on to convenience...

it will take you days of research to figure out where to bank...which country has the least tax reporting requirements? which country is the least hassle for a foreigner without even being a resident to set up an account? this is not straight-forward.

then when you choose a country you have to research the bank...fees for various services mostly, but also their policy for foreigners with no local address. what do you need to provide? expenses and hassle to mail or fax anything that might be required. it's not like in the US (or at least how it used to be) where you just present the money and you have an account. present a european bank with a US cheque and it will cost a whole lot to process it and it can take weeks.

then spend time researching your requirements with the US tax authorities and treasury. if you have more than $10,000 in a non-US account (highest value during the year) you must report this to the treasury. with the weak $, this is not much in €. Then you must figure out how to report foreign income on your tax return. Perhaps not a huge deal but all these hassles are adding up.

Now, back to expense...you carry currency risk by keeping sums in another currency. a fairly small strengthening of the $ can make your € worth much less. of course you can make money also but do you want to bet on currency? and if you do make money on the currency rate change...you need to figure out how to report this as income on your US return.

Of course, you can ignore some of the hassles but then you are risking fines. patriot act...the US wants to know everything and are probably much tighter with requiring the reporting mentioned above.

the hassles of maintaining an account far outweigh the reconciliation exercise that you described.

if you are earning money or own property in europe, then it is almost a necessity to get an account in the same country as your house/job. But this is a completely different story from what you are talking about.
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Old Apr 5th, 2006, 03:58 AM
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"You will probably get a worse rate than you will get using a U.S. bank card."

You almost certainly will if you have your home bank do the currency conversion and wire the funds in euros. You may not (we don't) if you do the wire transfer in your home currency and have the European receiving bank convert them to euros.
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Old Apr 5th, 2006, 09:02 AM
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The Crédit Agricole I use in France said that any funds from the States would be converted at the tourist rate, which is worse than the rate whe using an ATM.

A B&B in Italy accepted my check as a deposit. Germany and Belgium (and possibly other countries) do not work with checks as we know it. I tried to pay for our stay in a B&B in Belgium with a French check, and the hostess at first refused because of the heavy fee she would have to pay to cash the check. She relented because she was French and was going to spend her vacation in France and would use the check then. My Berlin cousin has me write a 15€ check for his property taxes in France because it would cost him 8€ for him to write the check. I cannot understand how he pays his rent and utilities.
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Old Apr 5th, 2006, 09:04 AM
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One more thing: I do not have a French ATM card because that would impose a monthly fee on my French account.
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