There are some general pointers as to how to go about choosing your bank though.

One school of thought is that you should choose the local bank with the most branches in the area which you’re moving to. That’s a reasonable approach in that for most countries there’s a charge to use ATMs that aren’t owned by your own bank so it may save you on ATM withdrawal fees. However, be wary of local banks that don’t operate internationally on a widespread basis or that don’t attract many foreign customers as you can come unstuck very easily through not having local banking practices explained to you. This even applies in many cases where banks operate English speaking branches: they might well speak English but often banking terms don’t translate well.

The other school of thought is that you should choose a bank based in your own country but with branches in your new country. This can work well in that the banking staff should be more familiar with the banking practices that you’re used to and sometimes offer good deals on money transfers to/from your home country. So, for example, if you’re American then the best choice is usually Citibank as that operates as a local bank in many countries yet retains an American feel in every location in which it operates and offers good deals on transfers between Citibank accounts in other countries. However, if you’re British, you might think that HSBC would be the way to go yet because it bills itself as “the world’s local bank” it tends to follow local banking practices more than British ones although it does offer transfers to your HSBC accounts in other countries.

Don’t forget that you don’t need to choose a single bank. One combination that works very well is a local bank with low charges and lots of branches combined with an international bank to handle your global transfers.

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The two tend to be linked and can rarely be considered totally in isolation. If you consider relatively stable currencies then a higher interest rate will tend to make a currency more valuable and conversely a lower interest rate will tend to make it less so. I say “tend to” because it’s far from a direct link as exchange rates are notoriously fickle: if markets take a view that a currency is overvalued then it’ll go down regardless of how high the interest rates are raised in that country.

However, unless you’re into short term trading it’s largely trends in exchange and interest rates that are important rather than the value that either may have at a given time. In fact, the neither the interest rate nor the exchange rate at a given point really matters a great deal but what you do need to do is to keep an eye on the exchange rate which is, usually, the most important variable when you’re investing outside your own country.

This also affects how you should keep score. Say you’re in the UK and you’re investing in America. In that case you need to measure the performance of your portfolio in dollars, not pounds. To rate the performance in pounds is just going to create a false performance statistic as it’ll be affected by the ups and downs of sterling vs the dollar and those can be quite substantial: in the last 20 years the pound has ranged from around $1 to the pound to over $2 to the pound. Obviously you’ll still measure your bottom line performance in sterling in this case but the performance of the portfolio itself is best charted in dollars.

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The reason is simple really: if you run an online business then sooner or later you generally find yourself in need of an American bank account. Unfortunately, the increased security measures in place post 9/11 mean that it’s not quite so easy to open one these days unless, of course, you’re living in America and therefore a considerable number of websites have grown up with the specific aim of selling you the required information.

Our site doesn’t charge for that information and therefore is increasingly popular as it provides exactly the same information that other sites charge anything from $5 to $250 to provide.

However, we’re sorely tempted to start charging for it too given some of the emails we’ve received demanding additional information and wanting to know why it isn’t on the site yet. What we’ll likely do is to charge for the hand-holding level of information or at least offer it for sale as the information on the above page is quite sufficient to allow anyone to open an account in America.

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1. Opening a non-resident bank account: the general requirements
2. Opening a bank account in America as a non-resident alien
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Of course, it’s one of many areas where European business practices are far from standard.

Take the UK and France for example. Two countries with a very long history of interaction so you’d think that many things would be similar except that they aren’t.

In the UK, credit cards are commonplace and it’s normal, expected even, for people to have several of them. In France, credit cards are a relatively new phenonmen and remain very rare.

In the UK, almost everyone has an overdraft and the banks prefer you to be permanently overdrawn as they collect more fees that way. In France, they’ll close your account if you’re overdrawn more than a couple of months.

In the UK, debit cards don’t have any purchase limit on them. In France, you can’t buy more than 3000�� a month usually, which is why you often see people resorting to cheques towards the end of the month.

In the UK, nobody will accept a cheque without a cheque card (a card issued by their bank and guaranteeing the cheque will be paid). In France, almost everyone until recently accepted cheques because if you bounced a cheque you could be banned from having a cheque account at all. That actually worked well until very recently when the economic situation seems to have caused something of a run on dud cheques so the effect is that more and more businesses don’t accept cheques which is sure to cause trouble soon so long as that debit card spending limit remains.

Any one of those differences can easily fell you if you don’t know about it in advance.

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Most of the time it’s due to holidays, of course, but an increasing number of us are becoming small scale international jet setters with homes in more than one country and with both of those come a need to transfer money abroad.

Holidays usually involve a different category of currency conversion in that you are on the spot when you need the money, the amounts involved are smaller and you probably don’t have a local bank account. However, whilst the amounts may be smaller individually, added up over the years they will come to quite a hefty sum. Also, many of those who holiday in the same country each year may be considering the purchase of a property there and so have that local account too.

Most people ignore the costs of all those international transactions to their detriment. One friend of mine found that almost 10% of his entire salary was going in such bank charges simply because he was living abroad and using his “home” account in exactly the same way that he always had ie lifting small amounts frequently.

Saving money on those transactions is usually fairly easy. If you don’t want to change your bank, check out exactly how they charge for use of credit, debit and cash cards abroad. You will usually find that debit and cash cards are more economic ways of getting cash than credit cards are in that you won’t be paying interest on the money. However, that’s not to say that they are cheap. Typically a withdrawal of £100 in the local currency will cost you £4 to £5 but note that this includes a fixed transaction charge so withdrawing £20 will cost you around £2 ie 10% whereas £200 would be about £7 ie 3.5%. You can eliminate these charges altogether if you use the UKs Nationwide Flexaccount as it has neither transaction fees nor foreign exchange charges.

It’s slightly better if you buy things, usually. Using a typical Mastercard or Visa card will only incur the foreign exchange charge ie buying £100 of goods will cost you £2.75 and that £20 item would be 70p. Therefore you should buy things with the card directly rather than lifting the cash to pay for them.

What about larger amounts ie if you’re living abroad or have a holiday home abroad? Well, if you follow our advice and get the Nationwide Flexaccount you can lift £500 per day which means that it’s quite viable to use that card in conjunction with a local bank account to transfer amounts equivalent to several thousand pounds. You certainly couldn’t buy a house in that way but it’s enough to fund the payments for electicity bills and the like.

If you are talking thousands, then the usual way is to ask your bank to do a SWIFT transfer. This will cost around £25 plus there’s a currency exchange charge (which isn’t widely available). However, that too can be eliminated in some circumstances. For example, if you bank with HSBC then you can do free transfers to an HSBC account elsewhere in the world but the HSBC Premier account that you need to avail of this costs £20/month (unless you have £50,000 or more on deposit with them) so it’s not as useful as it first appears. However, if you are buying in Spain, the Halifax run to a free account which offers free transfers from Halifax UK accounts to Halifax Spain ones. What’s less obvious is that this route gives you a pretty much free way from pounds sterling to euros anywhere in Europe as banks are required to transfer euros at the same level of charges in other European countries as they do domestically ie to get euros in an account in France, you could transfer from the Halifax UK to Halifax Spain and from there to a French bank.

Other options include the use of the specialised money transfer services such as HiFX (there are lots of similar services around.

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Or at least that’s where my informant banks his cash.

The only problem with his choice is that he’s in France and the bank is in Spain. No problem with the currency but what he’s not taken into account is that all European countries have a co-operation agreement in place which means that this bank account will be reported automatically to the French authorities.

I suspect that it will take quite a long time before that attitude of money becoming invisible when you use a bank just over the border changes. It’s been pointless for the Germans to drive over to Luxembourg with a suitcase of cash for quite some time (a very popular pastime apparently).

Anyway, if you’re considering a spot of money laundering, you’ll usually go rather further than just over the border these days.

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Opening accounts in both America and Switzerland used to be very easy but with increasing anti-terrorism legislation around the world many banks felt that they could no longer cope with the additional identity checks that the legislation seems to require of them. I say “seems” because it doesn’t really require any more of them than it does of someone living next door to the branch but they generally don’t make a whole lot of money on non-resident accounts anyway so it’s easier for them to use “the law” as an excuse to say no to non-residents.

However, for most “normal” countries all you actually need is a proof of address (ie an electricity or landline phone bill) plus a copy of your passport (usually this must be certified). More obsecure countries sometimes ask for an apostile which is more of a hassle to provide.

For America, Switzerland and the United Kingdom, the only things required are the proof of address and passport. In the case of America, 9/11 has meant that the banks prepared to open an account with minimal hassle has reduced drastically but includes Bank of America, Citibank, HSBC and, the ever-present, e-trade. Aside from e-trade, it’s easier to open an account with one of these banks if you already have an account with them in your own country and you may have one already as Bank of America issues a lot of credit cards in Europe under the MBNA name.

In the case of the UK, it’s easier to open a non-resident account with one of the branches in the offshore islands (Jersey, Guernsey, the Isle of Man or Gibraltar) as they are more accustomed to dealing with non-resident accounts. Don’t worry about that “offshore” tag as those islands banking systems are fully integrated with the mainland.

For Switzerland it’s generally fairly easy though some banks will now refuse non-resident accounts due to the expense of running them whilst others will charge you extra. You cannot open an account with SwissPoste these days, despite numerous websites listing it as a possibility and indeed charging you for the privilege of providing you with the information. The major banks (UBS, Credit Suisse) will still permit non-resident accounts and are unlikely to stop doing so as a large proportion of their client-base is non-resident but now charge around SF 75 per year to maintain the accounts if you’re non-resident. However, if you just want a Swiss account by far the best appears to be via SwissQuote which is a free multi-currency account and offers the option of a debit card too (there’s a charge for the debit card).

What are Certified & Apostilles? To get a document certified, you usually just need to go along to your bank and have them stamp the copy and write “original seen” on it. Sometimes banks ask for it to be certified by a lawyer but usually a bank is sufficient for them. An apostille is a certification that the person doing the original certification is known and what’s asked for usually is a “state-level” apostille. This means, usually, that you need to send off your passport to the department of your home government which deals with international affairs (usually called the State Department but is the Foreign & Commonwealth Office in the UK) who will provide you with an apostilled copy.

If you’re interesting in more details on these options, either subscribe to this category here (international-banking) or check out the information on our Expat Banking site. I’ll be slowly but surely working through the various countries here and on that site, the next being Switzerland and after that probably the offshore British islands.

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For one thing, they’re easily twice the size of the UK ones. That’s not because they’re ancient but because they have seemingly millions of different functions. Whereas in the UK, a bank ATM has basically three slots (card, money and receipt) and a UK building society machine adds two extra slots to deal with deposits, the Spanish variety has all kinds of slots and it takes a few seconds even to find where you’ve to stick your card in.

These days ATMs are quite sophisticated and generally work out what language you speak from the card you’ve inserted rather than asking you which language you’d like. However, that’s frequently a step too far when it’s an expat wielding the card as you may well not be using a card from your own country when you’re on holiday or just travelling.

It’s certainly something that the French machines don’t allow for. The machines usually ask you what language you want but revert to French if you use a French card regardless of which language you select!

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This is probably best illustrated by the vast number of websites which sell you the information that you need to open an account in America when you don’t live there. I say “America” simply because that’s the most popular but there are many other sites offering to open accounts in Switzerland (the second most popular) and various countries around the world.

Now, I’ll grant you that it’s more difficult to come by the information for Switzerland unless you know where to look but I’d be wanting to do a whole lot of looking before I forked out the typical $250 to $1000 that some websites charge for this information. I’ll be covering this (free!) very shortly on the expat banking section of Whole Earth so, unless you need your Swiss account in the next couple of weeks, it’s probably best to hold on.

What about America though? Would you pay $100 or more for the information? Many people appear to yet it’s freely available on the expat banking section of Whole Earth already although, to be fair, many others seem to have been getting it there for free for quite a while if the site stats are anything to go by.

The thing that gets me is that, in most cases, the information isn’t difficult to find. What’s worse though, particularly for Switzerland, is that a number of the charging websites are providing information that simply won’t work as they typically recommend opening an account with SwissPost which stopped opening accounts for non-residents a few years ago.

I’m quite tempted to start selling the information on ebay myself!

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The costs can be quite substantial too. A friend of mine who was living in Brussels once casually remarked that he just used the Halifax as he did at home, lifting EUR 20 or EUR 30 whenever he needed it. He was more than a little takenaback when I pointed out that by doing that he was paying around 10% of his entire salary in bank charges. Yes, that much.

We’ve had quite a run of Brits living in Spain stopping with us on their way to/from the UK this year and I was very surprised to find that only one of them used the Nationwide credit card. Yet, that’s the only one that offers free exchange from sterling to other currencies (and all of the people concerned were living on a UK based income).

The other alternative for euro-zone countries is the Halifax which operates as Banco Halifax in Spain. They offer free transfers from UK based Halifax (and Bank of Scotland) accounts to Halifax in Spain. Although they don’t currently operate elsewhere in Europe, the Spanish outfit is quite sufficient for those in eurozone countries as you can, of course, use the supplied debit card outside Spain for purchases (it’s a bit expensive for ATM withdrawals outside Spain).

Very handy and the whole thing operates in English.

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