International Money Transfers Online
Without a doubt one of the first things you will need to do in your new home is get money from your previous home country. The easiest way to do this is to set up a wire transfer from the bank that has your money to the bank that you will be using locally. Many banks require you to visit one of their offices to establish this overseas wire transfer but after an in branch authorization you can make international money transfers online.
There is typically a fee charged by both banks that can add up to $100
USD or more so these transfers are best suited for larger amounts of money. A huge benefit of this electronic transfer is the money is available in a couple of days.
International Money Transfers the old fashioned way.
Surprisingly most banks worldwide will accept a check drawn on a U.S bank for deposit. Whereas electronic international money transfers are the email of moving money abroad, depositing a foreign check in your local bank is not even snail mail, its speed is closer to the old pony express that used horses to move mail across the USA in the 1800s.
The timeliness of access to your money requires advanced planning because three weeks to a month before the funds are available is not unusual. The cost of this transfer is specific to each bank, but we have used BAC and Banco General, both of which have branches throughout Latin America and they both charge $25 USD per deposit, regardless of how many individual checks make up the deposit.
Cash Machines aka ATMS
These provide local currency on demand but between the local bank and the bank at home fees can add up to close to $10 USD per withdrawal. Withdrawals are typically limited to $500 USD per day so the cost of using these can add up quickly. Two banks, Charles Schwab and Citibank mitigate this. Schwab reimburses all ATM fees and Citibank allows no fee withdrawals at all of its branches worldwide regardless of which country your account was opened in.
Private Money Transfer Services
Two words, – last resort! These are very expensive and should be avoided if possible.
US Tax Reporting Requirements.
US Tax law requires annual hard copy declaration of foreign bank holdings $10,000 USD at any time during the year. There are two required, the first is the Foreign Account Tax Compliance Act or FATCA and the second is Report of Foreign Bank and Financial Accounts (FBAR).
Due to their complexity and high non compliance penalties most US Expats simply refer to them both as FUBAR! The tip here is if you can avoid it, never have $10,000 USD in foreign bank accounts. The laws and their reporting requirements apply to all foreign accounts combined together, not each account individually.
Day to Day Living Financial Strategies
Each strategy here is designed to legally avoid US IRS reporting discussed above. The first step is to prepare a budget for regular monthly out of pocket cash expenses.
Transfer several months cash expenses to your local bank plus a rainy day emergency fund because you will need it. The most inexpensive way to do this is to deposit a check a month before you need the funds, in an emergency use an ATM. Use a credit card issued by your home country to pay every possible local expense including groceries, cable and cell phone bills and use your home country bank account electronic billpay to pay the credit card on a timely basis.
The second strategy is to see if your monthly income can be deposited directly into your local bank account. The US Social Security Administration has direct deposit agreements with banks around the world.
If you have any suggestions, ideas and or questions please leave a comment below.