We Diversify Our Banking
We certainly are living in interesting times. We have U.S. supported rebels in Syria attempting to bring down the Assad regime, Russia moving tanks and military to Syria to stop the rebels while struggling to cope with sanctions leveled on them by the United States. Meanwhile, much of Europe melts down.
We have the recurring discussion in the U.S. Congress about taking over the 401ks and IRAs in exchange for U. S. government bonds and then guaranteeing retirement. We are told that our bank deposit now amounts to an unsecured loan to the bank. If our bank goes under. depositors’ money could be used to pay the bank’s debts.
Yes, indeed, interesting and uncertain times.
Here at Four Flags Journal we remain calm and confident. We are diversifying in just about every way we can think of–in investments, in currencies, and in countries. Just in case our subscribers also have decided to diversify and need at least a place to start, we offer you some resources to consider. Even if you are not ready to diversify yourself just yet, you might consider diversifying some cash so that all your assets are not in the same jurisdiction. Following is a list of banks that we have either used ourselves or found in research. If we have had experience with the resource, we will say so. Others are the result of research. In all cases you will need to do your own analysis before using them.
As our readers know, banking is becoming more difficult for U. S. citizens since the United States requires every bank that accepts American clients to report that client’s banking activities to the IRS. For that reason, our experience is that as soon as most banks find out that you are a U.S. citizen the conversation is over. Even if you hold dual citizenship, in most cases you can’t use your second passport to open the account if you are also a U. S. citizen.
The problem is not that they don’t want you as a client. All the extra bookkeeping and reporting cost the bank money, plus the penalties are high if the bank happens to make a mistake. So they just eliminate that problem. They don’t serve Americans. However, banking offshore is still possible. And here are some of the possibilities.
For our subscribers who do NOT have U.S. citizenship, the world of banking is open to you, along with a lot of other things. But the field is quite narrow for U.S. citizen. Following are institutions that will serve clients who do hold U. S. citizenship.
First–and we have experience with these people–is Everbank. We’ve been with them for a number of years. They are a U.S. bank but their service to someone living outside the country is excellent. They have different types of accounts, a brokerage, world currency accounts in a number of prime currencies, and you can even invest in precious metals through them.
We live in South America and having a bank wire sent from Everbank is a matter of going to the web site and entering instructions. They handle it immediately. If you still have bills to pay in the U.S. you can pay them on line and we are sometimes amazed by how fast it happens. We asked them how they do it so promptly sometimes and they said that in some cases they can transfer it electronically. We have always met with courtesy from their employees. Their web site is www.everbank.com. While Everbank is in the U. S., they do work very well for someone who lives overseas and also keeps an account in the States–for example, people who have U.S. income that is direct deposited in a U.S. bank.
Banco Republica, Uruguay
For those with an interest in Uruguay, we have had experience with the state bank in that country. They accept Americans with no problem. However, you must apply in person. You must provide proof of where you got the money that you are depositing. The last we knew, brokerage accounts did not count as documentation. They told us “Uruguay doesn’t understand much about that.” We advise our readers never to throw away a closing statement for real estate that they sell, a business that you they or other proof of income. If part of your money that you deposit is savings, it is hard to document but you’re all set if you just save documents that show an income.
The bank will want a phone number and an address. At one time they accepted a U. S. address and telephone and that may still be the case. It’s hard to tell you exactly what they will accept because it changes but you should be okay with these options. Also bring a reference letter from your home bank saying that you have an account with them that you handle responsibly. You’ll be all set. Our suggestion is that you have a letter of reference for any bank that you apply to for an account.
And while we’re at it, even though this is a little off subject, you may also open an account with one of two stock brokerages in Montevideo, Victor Paullier & CIA and Gaston Bengochea & Cia. However, charges are very high compared to a discount brokerage in the U.S. so you will have to weigh the advantages and disadvantages. Bengochea goes through a U.S. brokerage so we don’t see the advantage of using them. You merely add more charges and it is not a diversification outside of the States. But Paullier buys directly from foreign stock exchanges. . Be prepared for much higher fees than in the United States.
Very few brave souls bank in Argentina except for small amounts needed for daily living, if that. Argentina does not have a good record when it comes to banking. Plus you can wire money in to some of the exchange houses in Argentina and get a much better rate of exchange. However, if you have an Argentina address you can open an account. You will need a “cuil” and they will check the address you give to be sure that you live there.
You do not need to appear in person to open an account, Application forms are on their web site. Please do notice the fees involved, which are pretty high Minimum deposit at present is $500.
Several Canadian banks will open accounts for U.S. citizens. There probably are many in Canada but the following will perhaps get you started. All that we know of require a personal visit.
T.D. Waterhouse Bank,
This bank is connected with T.D. Ameritrade discount broker. They once told us that they would consider opening an account from a distance, but then after we sent the required paperwork, they decided that we would have to go there since they felt a personal meeting necessary to verify our identity. That may well have been because of our Argentina address. No minimum deposit requirement.
National Bank of Canada
No minimum and requires a personal visit. Also has branches in the U.S. and various locations around the world
Capital Security Bank Cook Islands
They will open an account from a distance but the fees are quite high for this bank. However, the bank is connected with one of the largest trust companies in the Cook Islands and has no links to the U. S. and is especially secure since it makes loans only against actual deposits. You can trade currencies here and deal in precious metals. We really like this bank but we frankly balk at the charges. You can see what you think.
We find quite a few Argentines who like dealing with banks in China. We do too. Here are some choices that may work for U. S. citizens.
United Overseas Bank, Singapore
Minimum to open an account $400 U.S. Requires a personal visit to the bank. Also has branches in China, Thailand, Malaysia and Indonesia.
Hang Seng Bank, Hong Kong
They may require a personal visit, it is at the bank’s discretion. If you happen to have a recommendation from one of their existing clients it could help if you want to open from a distance but no guarantees there. No branches in the U.S. but a large stockholder in the bank is HSBC which does have a presence in the U. S., in case that is important to you.
Lloyds International Bank, Jersey
$3,500 minimum to open. They will open an account for you from a distance. They offer several types of accounts and in several currencies. Lloyd’s International Bank will open accounts for U. S. citizens but only if they reside outside the U.S. If you’re still living in the U. S., this will not help you.
Citibank also has a banking presence in Singapore in which you can open an account from a distance, if Citibank appeals to you. The minimum to open is $10,000.
Although the dollar is strong at the moment and we like the dollar, we think it is time to look for income producing assets rather than maintain large bank deposits. We are not financial advisers, however. Always consult your personal financial adviser before making financial decisions.
This is a bank in Singapore that will open an account for an American even without your going there in person. Here is the contact information
OCBC Bank (Overseas China Banking Corporation)
53 Ang Mo Kio Avenue 3
#B1-32/33 AMK Hub
If you need more resources for international diversification, stay tuned. Until next time . . .