Expat Banking - How to Choose the Right Banking Services

Expats face many challenges when it comes to their personal finances while living abroad. Selecting the right bank account, or bank accounts, is crucial for a smooth transition to another country while avoiding unnecessary fees, penalties and other complications.

We recently published our list of the Best Banks for Expats in 2024. Deciding on what makes the most sense for you, however, is highly individualized and requires careful evaluation of your specific needs.

With that in mind, here are some tips to help you choose the right bank account overseas, with a focus on weighing the benefits of local and international finance providers and leveraging independent financial and tax services to help you make the best possible decision. Understand that this is simply a guide to help you get started, and that it is in your best interest to use professional services, such as those offered by our expat tax and fiance service partners.

1. Get Organized: Research Local and International Banking Options

As with any other aspect of expat life, the proper management of expat finances requires a meticulous level of organization. Be disorganized and you'll pay a price, literally! Start by evaluating your current services and the extent to which they will be able to meet your needs abroad. Understand the implications of cancelling accounts and how that will impact your credit history.

Next, research the banking options available in your destination country. Look for reputable banks with positive customer reviews. Read through Expat Exchange.com's forums and ask questions about the banks you are considering that have not been asked or answered in the past. Evaluate both international banks with local branches and well-established local banks. International banks might offer more familiarity and consistent services across borders, while local banks can provide better integration with the local financial system and possibly lower fees for local transactions.

Keep in mind that there can be circumstances that will interject themselves and disrupt even the most careful planning. For instance, how you can pay rent or make a real estate purchase may force you to opt for a different banking service provider than the one you initially planned on using while living abroad.

2. Understand the Fees

Bank fees can quickly add up, especially if you are not familiar with the local banking system. Common fees include monthly maintenance fees, ATM withdrawal fees, foreign transaction fees, and currency conversion fees. Compare the fee structures of different banks to find the most cost-effective option for your needs. International banks might have higher fees for local transactions but could offer benefits for international transfers and multi-currency accounts.

It's quite possible that the best option for you to save money on fees will be to use multiple providers for different financial services.

3. Consider Accessibility and Convenience

Choose a bank with a convenient branch and ATM network if that is important to you. If you frequently travel within the country or region, ensure that your bank has a widespread presence. Additionally, check if the bank offers online and mobile banking services, which can be crucial for managing your account remotely. International banks often have robust online banking systems, while local banks might offer more personalized in-branch services. Some people are more comfortable than others with newer "fintech," "challenger bank," and "neobank" options. Carefully consider these services and how they will or will not meet your specific needs.

4. Assess Multi-Currency Accounts

If you earn income in different currencies or need to make international transactions regularly, a multi-currency account provider, such as our partner Wise, can be beneficial. These accounts allow you to hold and manage multiple currencies, reducing the need for frequent currency conversions and associated fees. International banks typically offer multi-currency accounts, whereas local banks might have limited and potentially more costly options.

5. Check the International Services

Ensure that the bank provides services that cater to expatriates, such as international money transfers, foreign exchange services, and support in multiple languages. Some banks offer specialized expat accounts with tailored features, so inquire about these options. International banks often have more extensive international services, but some local banks also offer competitive expat-friendly products.

6. Evaluate Customer Service

Good customer service is essential, especially when you are navigating a new banking system. Look for banks with dedicated expat support lines and staff who can assist you with any issues or questions. Reading customer reviews and asking for recommendations from fellow expats can provide insights into the bank's customer service quality. Both local and international banks can provide excellent customer service, so evaluate based on personal preference and specific needs.

7. Consider the Account Requirements

Different banks have varying requirements for opening an account. Some may require a minimum deposit, proof of residency, or other documentation. Make sure you understand these requirements and can meet them before choosing a bank. Local banks might have more stringent local residency requirements, while international banks might offer more flexibility.

8. Understand the Local Banking Regulations

Each country has its own banking regulations and practices. Familiarize yourself with the local banking laws, such as deposit insurance, account security measures, and privacy policies. This knowledge can help you make informed decisions and protect your financial interests. Many expats opt to only move the money they need to while living abroad and leave the rest in their home country. Again, every situation is different so carefully consider your specific needs and the impact local regulations might have on you and your family.

9. Form Relationships at Local Banks

Building a relationship with your bank can be advantageous, especially if you plan to stay in the country long-term. Having a good rapport with your bank manager can help you access better services, negotiate fees, and receive personalized financial advice. Local banks might offer more personalized relationships, while international banks can provide consistency if you move between countries.

10. Compare Exchange Rates

If you will be dealing with currency exchanges frequently, compare the exchange rates offered by different banks and other services. Some banks may offer more favorable rates than others, which can save you money over time. Wise, one of our partners, routinely comes up as a good option for expats around the world.

11. Engage with Independent Financial and Tax Services

International finance and tax service providers are invaluable in helping you manage your finances while living abroad. They can offer tailored advice on the best banking options for your specific situation, considering factors like tax efficiency, investment opportunities, and regulatory compliance, such as with FBAR, FATCA, and more. These experts can help you navigate the complexities of both local and international banking systems, ensuring that you make well-informed decisions that align with your financial goals.

Choosing the best banking services while living overseas requires the careful consideration of various factors, such as the minimization of fees, online access, appropriate services for your needs, and excellent customer support. Weighing the benefits of local versus international finance providers can help you find the best fit for your specific needs. With appropriate expert guidance, you can meet all of these needs and ensure you make the informed financial decisions as you transition to your new home abroad.