Wednesday, October 22, 2008

taking it all into account


I am in a retrospective mood today. I started looking at some of the lessons I have learned from my fellow bloggers.


When I started thinking about moving to Mexico, Nancy and Paul were still in Seattle. Cynthia and Mike were just beginning the steps toward a Mexico move. And American Mommy had not yet started her blog.


Back then, I went to a blog that I still visit regularly: Michael Dickson's
La Vida Bougainvillea. If I remember correctly, he originally drafted the material in the blog as a newspaper article for people where were interested moving south of the border.


That blog (and all of his blogs, for that matter) are filled with all sorts of information. But the information I would like to put before the house are his observations on bank accounts. Here is what my mentor has to say:


Also open a checking account at Citibank (Banamex USA) located in Los Angeles. Toll-free number is 1-800-222-1234. You´ll get a recording. Say the word "representative," and a human will come on the line.

They have a special deal for retirees that includes checks and a debit card. This is the sole branch in the United States of Banamex, one of Mexico´s largest banks, now owned by Citicorp.

Tell your mutual fund company about your account at Citibank or whatever bank you end up with. Money can be transferred electronically via the mutual fund website to the bank´s dollar account.

Also, have pension and Social Security payments routed electronically to the same Citibank account. From Citibank, money can be transferred quickly and without charge by website or phone call to an account you will open later at Banamex after you arrive in Mexico. The money will arrive instantly in your Banamex account in pesos.


The only bank in Melaque is a Banamex branch. Michael's advice seemed to fit my situation perfectly. And I think it still does.


I have mentioned several times that I am a member of a Mexico message board that I have christened The Barroom Brawl Board. No further explanation is required.


On Saturday, one of the members was attempting to be helpful about Mexican banking matters. Another member fired back:



Other than for having utility bills paid by a bank or financial institute, Lloyds does this for you in Ajijic, why would you want a Mexican bank account? I have my money in a US bank and can set the daily ATM withdrawal limit with the bank. I don't think I've seen the inside of my US bank in years but I do all my banking through them.

Would someone please tell me what I'm missing by not having a Mexican bank account!


Message boards are a blunt tool. I could not tell if this was a request for information or a challenge -- even though the stray exclamation point gives me a rather helpful hint.


Either way, the question is interesting. Is there any need for an expatriate to have a Mexican bank account?


I can think of three reasons. The first is psychological. If I am moving from the United States to Mexico, why would I want all of my contacts, including financial, to remain in the country I have left? Several of you have pointed out that many Canadians and Americans are merely long-term tourists in Mexico. For them, it would make sense to keep everything in the old country's institutions. But, if you want to be Mexican, you will probably want to use a Mexican bank.


The second reason is far more practical. Twice while visiting Mexico, my credit union has temporarily terminated transactions with Mexican banks. Both times my access to ATM machines was shut down. If I had access to a Mexican account, I would, at least, have some money available.


The third is communal. When I opened my law practice, the first place I went was the local bank. I wanted to meet the president and the officers to get a loan. But, more importantly, I wanted to meet the tellers. Each visit, I would take along something: a piece of candy, a flower from my garden. They were small tokens that I appreciated the hard work that tellers perform. And, whenever I had a problem, I knew I had them on my side. Red tape could simply disappear at the touch of their deft fingers. If I am going to be a part of the Melaque community, I want to have a similar relationship with the people who live there. And tellers are a marvelous place to start.


But, I am interested what may be some other good reasons for opening a Mexican bank account? Am I missing something obvious?

31 comments:

Anonymous said...

all very good points and if i ever move down, i will definitely open a mexican bank account. but what will you need in order to communicate with those tellers? hint, hint-how are yo doing on your spanish? you haven't mentioned it in a while. i hope you will take the time to study on a regular basis if you are not already doing so. i know you're very busy, but i think that needs to be one of your priorities. that way when you get down there, you will have a good foundation and it will make life easier for you.

que tengas un buen dia!
teresa

1st Mate said...

It was easier for me to get my FM-3 with a local bank account. I don't keep all my money there, but three months before renewing the FM-3 each year I deposit $1K a month and then get an account statement to present with my paperwork. The rest of my funds are in a Tucson bank where I have no monthly fee as long as the balance is over $1K.

Of course, there are people who say "Why bother to get an FM-3?" My response to that is that I don't want to have to go to the border every 180 days to renew my visa. I might even want to relocate much farther south at some point (like Barra de Navidad, then we'd be neighbors!) and I certainly don't want that trip to the border every six months then.

Calypso said...

Don't need no stinkin' Mexican bank account. Too many friends have been swindled (both Mexican and extranjero). Really true, and they charge for everything - there is no benefit for having a larger balance etc.

You can have an allegiance to the people and your community without being swindled in the process - go with what works and stay away from forced contributions to corruption.

Is that curmudgeon enough for you? Your pal in Mexico...
Juan Calypso

Islagringo said...

Good question and one I hear all the time. You've mentioned the most obvious..access to cash wherever you may find yourself in Mexico. Secondly, if you are applying for an FM3 you need to be able to prove that you have a certain amount of money in the bank. This is done by providing 3 months of bank statements. If they are from a Mexican bank, they hardly even look at them. From an American bank, you must pay to have them translated by an official translator. Costly.

I actually have two accounts with HSBC, the only bank available on the island. A peso account and a dollar account. Mexican banks now offer that.

The main reason I also maintain my American bank account is to pay bills. How do you plan to pay your credit cards while living here? Online through your bank account is my guess. Also, it is extremely difficult, time consuming and frustrating to try to get an automatic deposit of things like SS or retirement checks into a Mexican bank.

I guess my recommendation is to have one of each. Covered!

Islagringo said...

BTW, don't expect to develop much of a rapport with tellers here. And do NOT ever bring them a present, even a piece of candy. You both could get into trouble.

Jonna said...

I haven't yet found a need for a Mexican bank account. I contemplate it occasionally but so far there's been no reason to get one.

Realize that due to a lack of competition or regulation or something, banks here don't work the same way. Customer service is an unknown term, fees are charged for everything, checks are not even worth trying to use, it is almost impossible to change branches once you've opened an account, closing an account is difficult as well and most just give up and leave the bank to close it when the fees have piled up too high.

If you add the reality of Homeland Security and the fact that once you no longer have a physical address in the US it becomes much harder to open accounts there or get credit cards there, get them now and keep them safe.

I use 2 US accounts to get past the occasional problem with one or the other. Including expired ATM cards that you forgot to get sent down, lost ATM cards that the bank machine sucks up, all of that. In the US, it's possible to get accounts with no fees so if I don't use them it doesn't cost me. Try that in Mexico!

Bad things happen to cards with Mexican banks too, I won't say more often but I'm thinking it. When it does, the solution is difficult even with a good command of Spanish and without that it is very difficult.

In most areas of Mexico, you need an FM3 to open an account at a bank. Keep that in mind too.

I am a firm believer in preserving bridges when you make these life moves. Don't cancel your accounts NOB until you see how these plans made from afar work out.

What I have instead, is an account with Monex. It is more like a savings account and I keep a little money in it for times of civil war and such. It also makes me known and I've cultivated those little friendships with the Monex reps here. I don't know if it helps though, it's nice that they know me by name and answer my questions. Monex is the best way to move larger sums from the US to MX, you don't have to fill out all those Homeland Security forms and you get a very good exchange rate. You can also cash US checks with them, try that at a regular Mexican bank!

Really, other than being an old goober that goes in and says hello to the tellers everyday, what are you going to use that Mexican account for? Transferring money to it from the US they will rip you off in charges and bad exchange rates. You can pay your utility bills at any OXXO or grocery store. No one is going to take a check unless you are a business or they can wait a month or two for their money. Why do you need one?

Anonymous said...

Teller turnover rate, like with all low-wage jobs, is very high. Cultivating friendships with a teller won't do you much good. They also are trained to serve you (through a slit in bullet-proof glass) and send you on your way. Often there is a line. You can chat at the stores sometimes, but not at the banks. Teresa is right, spend an hour or two a day working on your spanish with a tutor. If you have a year to prepare yourself there you will have a good start.

Theresa in Mèrida said...

Remember when you used to have to go to the bank on your lunch hour to cash your paycheck on Fridays? You would stand in a long line and just before you reached the window the teller would close and go to lunch? That is what banks are like here, user surly, unless you have something like the Premier account at HSBC which requires a deposit of something like $500,000 mxp, then you get a personal banker and a special bank.
Everything Jonna said goes for me, except we still haven't gotten an account with Monex. Also we present our 3 months statements at renewal time, no translation. NO problem.
We do keep cash on hand all the time,in case of emergencies. If there is a chance of a hurricane we start hoarding small bills and coin in preparation of no ATMs working.
We once waited a half hour to change out address on our bank account, then they said that we needed our original contract, when Husband asked if we needed our original contract to withdraw all our money except 3 pesos? they found a way to make a copy themselves. We were very happy when we finally bought our house and closed the account.
Plus to add insult to injury savings account pay ZERO interest! and they charge you to have a checking account.
I feel strongly about this, can you tell?
regards,
Theresa

Michael Dickson said...

I opened my Banamex account in 2000. I forget now why I did it, but I have never regretted it.

I have never been ripped off by them unless you count fees for this and that (relatively small in my opinion). It doesn´t bother me. I don´t waste time thinking about that piddling stuff.

I like your first reason: the psychological. I have cut all practical connections to the U.S. short of my two credit cards, one of which has a U.S. mail drop address. There are cyber-businesses that will not accept credit cards without a U.S. mailing address.

There are tons of disadvantages to living in Mexico, mostly small. The huge advantage is financial. Property tax, car tax, insurance, health care, etc., are way less than in the U.S., so I don´t care if I get charged $1 to $2 for an ATM withdrawal. I´m still way ahead of the game.

If you´re gonna live here, then live here. Trying to keep one foot here, one foot there, just leads to niggling headaches.

From what I can tell from the internet the great majority of my fellow U.S. citizens feel compelled to keep U.S. connections they do not need even though they intend to live permanently in Mexico. It makes them goofy.

If you are going to be a Mexican resident, just do it, I say.

It´s odd that so many folks trying to keep one foot in the U.S. are, it appears, of the Leftist persuasion, folks quite quick to criticize their native land. But they can´t just . . . let . . . go . . . of that very same land. Kinda funny.

As for making friends with the bank teller: Yeah, sure. Give it a whirl. Buena suerte. Rots of ruck.

Babs said...

Ok, I want to chime in. IF you want to get an FM-3, you need a Mexican bank account. I keep the minimum in it to pay the maid, gardener and my rent which is automatically transferred to the landlord once a month. There is about a 20 pesos fee for that service. Who cares? I like the convenience.
I also keep two US bank accounts BECAUSE that money is insured whereas money in Mexican bank accounts is NOT insured. My SS goes to my Bank of America acct and they have a joint agreement with Santander. So, when twice a month I use my ATM card, there is no withdrawal fee. In addition, if I die, or when I die, I want my kids to be able to access those funds easily since they are on the accounts as co-signers.
When I renew my FM-3, I give them 3 months of Lloyd's and 3 months of a US account. They want to make sure you have at least $1250 a monoth coming in.......I've never had to have anything translated, I just download the statements off the internet.
I purposely made a point of meeting the manager of Lloyd's and have a very good business relationship with him. During the holidays I always take a LARGE tin of homemade cookies to him which he shares with all the employees. I know that for a fact, because they all stop and thank me! He has been very helpful at times of need.
You WILL want to have an FM-3 so you don't have to drive to the border to renew your car and your visa each six months. And, in fact two people recently were denied 6 month visas and only given 3 months! so they may be cracking down on that.......who knows.
For more info on moving to Mexico you might want to look at Rolly Brooks' website. He has very definitive information on ALL subjects such as domestic help wages, etc.
I presume there is an immigration office in Manzanillo where you would go to get the FM-3 if you don't get it before you come down.
Good luck.
BTW, someone said you don't make interest on accounts in Mexico but that is not true.

Jonna said...

Well Michael, it would seem that YOU have not left behind that very American trait of drawing the left vs right line in the sand. You are so full of it. People - note that, just people not left people or right people - keep their options open in both countries for various reasons.

I have not had any headaches from it, niggling or otherwise. I do like having lots of options though, to pick the country and the services I like best. Hands down, even after all this hoo-ha up north, US banks are miles better than their Mexican cousins.

I guess from your comment that you also have all of your investments in Mexico, and your pension or social security deposited there as well?

It doesn't make me or anyone I know goofy to live as an ex-pat with ties to my home country and ties to my new country. It's not hard at all, I'm not sure why it would be so difficult for you?

David & Sandra said...

We also have an acount with CitiBank in the US and Banamex in Mexico. We wrote out a check from Banamex every week for 8 months while our home was being constructed. We just transfered the dollars to pesos. It was very convenient, otherwise I would have been going to the ATM every day to take out enough to pay for construction.
We also ocasionally write checks on our Banamex acount to pay larger amounts for bills.We never have had problems with the checks and it sure beats going to the
ATM daily trying to get a larger sum of pesos.
I think it has been a very good idea for us to have a Mexican checking account.

Michael Dickson said...

Jonna, I am indeed full of it!

Oh, I keep most my money in the U.S. with The Vanguard Group. Not insured, as this month as shown, but it ain´t Mexican either. I am full of it, but I am not nuts.

Steve Cotton said...

Well, amigos and amigas, this has been very enlightening. I have learned a lot, and the lesson is: there are many correct answers in Mexico.

Because I plan to get an FM3, I will need to talk to my neighbors in Melaque and Manzanillo to determine if having a Mexican bank account will help me through the visa renewal process, assuming I get the visa before I leave in April.

But I have a much better idea what type of questions I should be asking.

Babs said...

When you go to the Mexican Consulate to get your FM-3 they will tell you what you need......

Steve Cotton said...

Babs -- I should have been less opaque. I meant when I need to renew my FM3 in Mexico, I will talk with my neighbors to determine if the Mananillo office gives any additional credence to accounts in a Mexican bank.

Calypso said...

I totally forgot to include Jonna in my curmudgeon list on my Blog the other day - shame on me!

Part of the answer for you Steve will be what people in your area experience - because as noted the experiences are quite variable.

While there are others with good reports and no problems with their Mexican bank - that is not the case in our area - ties or not to otra lado I go where it is easiest, cheapest and safest (in no particular order.

Anonymous said...

Steve,

I can't personally attest to what benefits you might gain from a Mexican bank account, but there is one VERY GOOD reason to keep as little money there as possible. Mexico is still an emerging market with all the risks that that implies.

Look at the Peso/USD exchange rate over the past six weeks. Pesos are now worth about 30% less than they were at the start of that period. Sure, the peso might rally from time to time as it did last summer. But the longer term history of the peso, and I believe the future of the peso is to lose value versus the dollar. Sometimes faster, sometimes slower, but it's a pretty inexorable downward pull.

Keep as much money in USD as possible. Major currencies don't move 30% in six weeks. And despite this spring's chatter of a dollar collapse, the USD is still the world's main reserve currency, and will be for many years to come.

As for ATM cards, I hate to sound harsh, but get a real bank. I too use a credit union, and they left me high and dry in Italy with no cash, "for my protection." Fortunately, I was able to get a cash advance on a Visa card.

The reason credit unions are prone to this kind of thing is they aren't willing to pony up for the latest fraud-protection software systems that prevent their systems from being scammed. So they just shut down entire countries instead. Major banks have the cost base to afford the best software. So get an account with a major bank, and you should be OK. And keep some cash around just in case.

And I'm with Michael on chatting up tellers. Sounds quite Victorian. I haven't talked face to face with a bank teller in over 20 years. Seems like a huge waste of time.

Fond regards,

Kim G
Boston, MA

P.S. Why aren't the expat blogs ablaze with chatter over the exchange rate? This should be HUGE for the expat community.

Anonymous said...

P.P.S. I'd second the opinion above about your Spanish. I'm not sure dealing with a bank is where I'd want to use my first-semester Spanish. Dealing with numbers in a second language is the hardest thing.

K
Boston.

American Mommy in Mexico said...

Who knew banking could illicit such passionate responses?!

Given we are temps in Mx, we have elected NOT to open an account so far. We did check into it but using the ATM works in our financial situaion.

Anonymous said...

I have a mixture of accounts too...I keep my account in the US in my old neighborhood where so far I still have my old banker who helps me out once in a while. I also have a Banamex account. I wish the Banamex account were tied directly to a US account so that I could seamlessly move money down here.

I also have a business account with Banamex. I am able to write checks some places but they are not as readily accepted here... I also have a debit card tied to my Banamex account and use that for most things though it is really a cash economy....

I have quit using my US credit card here because there are now rather steep foreign transaction fees. But I do use it to make purchases online like airline tickets and things that I have friends bring down when they come.

I also no longer use the ATMs because of the fees preferring to do a wire transfer with its fee once or twice a year and then use my debit card for transactions or to get cash from my local account.

It really is a mish mash of ways that work...everyone finds their way that works for them...

I agree with the schmoozing the folks at bank to get better service...does not work here...

One last little hint...do not ever go to the bank on a quincena...the 15th or 30th of the month...the lines are astounding.

Steve Cotton said...

Kim -- I suspect I will follow Michael's advice and set up a retirement account with Citibank. Then I will see if I want to deal with the Melaque branch of Banamex. I may post a question on the Melaque message board to see if the immigration office in Manzanillo prefers local statements or if American statements need to be translated. (By the way, the Melaque board and the La Manzanilla board have been ablaze with comments on the exchange rate.)

I would never place anything more than a minimum amount for FM3 purposes in a Mexican account. Besides, I could easily use up that many pesos in a month without breaking a financial sweat.

American Mommy -- I may follow your lead on my next trip down. I am more worried about the long term. Who knew that bank accounts could be so "comment-able."

Anonymous -- Thanks for the additional tips. I should not be surprised at the mixed reaction to the question. I could get similar comments on local banks and credit unions.

Anonymous said...

Regarding the comment about the exchange rate...when the exchange rate became favorable recently, I wired a large sum to my Mexican bank and instantly made 20% on my money...why would one not want to do that? Kathe and Anonymous above...forgot to sign

Michael Dickson said...

Steve, as I mentioned down farther on my engagingly informative website, someone told me a few months ago that you cannot open an account at the Citibank LA branch of Banamex now except in person.

This strikes me as highly unlikely in this wired world.

Report back on that, please.

Don´t know if somebody has mentioned this, but wiring money from the Citibank account to your Banamex account is free. At least, they have never charged me.

Gary Denness said...

To add my tuppence to the debate...!

Technically speaking, you need an FM3 to get a bank account, not the other way round. But I do know that different immigration offices around the country have different sets of requirements, some of which seem to get made up on the spot! Crazy, I know...

The best advice you'll get is from someone who's done it recently in the same place you're going to. But beware - banks used to open accounts with much less fuss than they do now, not least because the US govt has enforced US owned banks and banks that deal with the US (and that includes pretty much all of them) to adhere to strict regulations.

The Mexican govt has also tightened up regulations due to money laundering issues. Someone who opened up an account a few years ago might give you out of date advice.

As for the worth of having an account - depends dunnit! Mexico is a largely cash economy, so it isn't essential to have one to live here. But then if you're transferring funds from the US or enjoy the convenience of ordering tickets over the internet, then an account is more than handy.

I have two accounts, one with Scotiabank and one with Banamex. The Scotiabank account turned out to have severe limitations! Their debit card won't work over the net, which was unfortunate because I needed to 'activate' my PayPal account with a credit or debit card. So off I went to Banamex...their debit vcard works a treat.

It's nice to see Mexican banks offering free (or at least freeish!) banking too. Also ironic...in the UK it's likely they are going to abandon that model.

Steve Cotton said...

Michael -- I intend to contact Citibank when my federal service retirement checks start in January. I will let you know if there are new restrictions. I raised the same question on the Barroom Brawl message board, but received no response.

Gary -- Thanks for the "think local" advice. I received some very timely comments on the Melaque message board that will help me make up my mind on whether to get a bank account in Mexico.

Anonymous said...

You do not need an FM3 to get a bank account

Gary Denness said...

I did say 'technically speaking'. By this I mean that it is possible. I know of one person recently who has claimed they got an account without one. But it is getting harder to find someone who will open one for you without the correct documentation.

But in accordance with the rules you are meant to have an FM3 to produce. The application forms for a foreigner detail this requirement, at least at HSBC, Scotiabank, Banamex and Bancomer.

Incidentally, you now need an FM2 to get a credit card. If you go to a bank their literature may state they only require an FM3, but rules have changed quicker than their printing presses can print documents!

I tried getting one in the summer, but to no avail. I only learned of the change because one of my English students is a director of a bank here who tried to help me open one at his bank. But it was a no go.

Marcia said...

If you apply for an FM3 visa you need to show 3 months of the proper amount of income. To avoid the cost of mailing and translating you USA bank acct. information, you should open an acct. in a Mexican bank. That's what I have done and for those 3 months prior to renewal of the visa, I make sure my deposits show the amount required. Marcia Hass

Steve Cotton said...

Gary -- I intend to have an FM3 in hand. I have quickly learned that rules are flexible, but the boy scout approach seems to work best.

Marcia -- Glad to hear that a Mexican account works well -- especially for renewals.

Gary Denness said...

Steve, another good resource for info on FM3's and bank accounts is Dave's ESL Cafe - http://forums.eslcafe.com/job/viewforum.php?f=26&sid=d50ce21da53ebe6f5e030e76cde1c39b

Incidentally, opening a bank account is a pretty quick affair. Providing you turn up with the correct documentation (off the top of my head - Passport, FM3, Utility bill, names, addresses and phone numbers of two Mexican references) you'll walk out with your new debit card that day. You'll probably need 1,000 pesos to open the account too, although you can withdraw this. With a basic free account, you don't need to keep a minimum amount in it. This applies to Banamex, HSBC, Santander and Bancomer anyway.