I thought I was prepared.
I wanted everything to go smoothly in our transition to India, and finances was high on the list of things I preferred to not worry about. While I was still in the US, I opened an account with a large international bank that I knew had branches and ATMs in India. This should be easy.
When we first arrived, I went to my bank’s ATM to get some cash. There was a notice that they would be levying an additional fee on international cards. Strange, I thought. Shouldn’t they accept the card of their own bank?
I checked our balance online and within about five days I had racked up close to US $80 in fees. Yikes!
I painfully learned that the bank in the US is completely separate from the bank in India, although they have the same name; and therefore, they were charging me additional fees on both sides.
Opening an Indian bank account as an expat is not really an option unless you are on an Employment visa, so most other outsiders must rely on their home bank account to access their money. There are several things you need to think of before you come in order to understand how things work here.
The quickest way to get rupees in India is to use your home bank’s ATM card. In major metros, ATMs are easy to find. You can find them in smaller cities too, but you may have to plan a special errand to make sure you are near one.
Choosing the right ATM to use is a bit of an art. The really nice ones with names you may recognize are good, but often come with higher fees. The really grungy ones probably aren’t charging anything extra, but I’ve had the experience of losing my card and getting overcharged.
Most ATMs have a maximum withdraw limit of Rs. 10,000 per transaction (Citibank allows Rs. 20,000 in some ATMs). You can do as many transactions as your home bank will allow, but will need to restart the process every time. This limit is important because every transaction is subject to a new charge.
Here are the fees you may be charged:
- Fee from your home bank for using an ATM out of network
- Conversion charge from your home bank for converting the money into rupees
- Fee from the bank that owns the ATM for a foreign transaction
Your debit or credit card can be used in most stores and restaurants, but you should always carry cash with you just in case. The one place where many international cards are not accepted is online. Some of the bigger e-commerce sites accept them, but many do not. If your transaction gets denied, it is likely that this is the cause.
When you buy things at point-of-sale, you may be charged a conversion fee by your home bank that can go as high as 3%. It may not be a big deal if you are coming for a short visit where you are only making a few purchases, but if you are here for a few months and plan to use your card a lot, it can really eat into your money.
These days, most banks have good online platforms for managing your account from overseas, but you want it to be fully featured and you should be very comfortable with it. Any extra service (like mobile deposits) that helps you to not be reliant on a physical location is a huge plus.
Great customer service is a necessity when you are managing your account from overseas. You can put a travel watch on your account before you come, but you may still need to call for a special situation or need. After five years here, if I deviate from my usual pattern of using my card, it gets shut down. Thankfully, it’s easy to reactivate with a quick automated call.
The ideal situation is a 24-hour help line of friendly faces. FAQs and email responses are often too slow for emergency situations, so you want to have the option of calling someone at any time.
I don’t get any money for saying this, but if you are in the US, I can wholeheartedly recommend Charles Schwab Bank as the best expat bank account for India. They are basically perfect in every way.
- No ATM fees charged
- No conversion fees for ATMs or Point-of-Sale
- If the other bank charges for using their ATM, Schwab will refund the amount. Seriously.
- Amazing customer service. My wife started to get a little worried when I started to get excited about having to call them up. They are that good.
It seems like you may be able to get a $100 bonus if you sign up here, but I can’t confirm it.
I’ve heard good things about the Capital One Venture Credit Card as well if that is of interest.
Sorry, I don’t have good recommendations for other countries. Many banks in the UK actually have much closer physical tie-ups with their Indian branches that might make it easier, but no promises.
Please leave a comment if you have any other good recommendations!
Next week we’ll look at opening a bank account in India!
Image Credit: C+H on Flickr