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I was trying to come up with a snazzy title for this one but there is just no way around telling it as it is. There is nothing exciting about having to open a bank account in a new country. Neither is there much humor in it, though I always find it rewarding to go look for it anyway. Humor is so much better to stomach than hassle.
Anyway, a reader asked if it’s possible to open a South African bank account as a foreigner (yes it is!) so I thought I should make a blog post out of it. While I’ve written about going to the bank (where readers have left some instructive comments), I’ve never actually told you about opening an account.
Perhaps this is due to the fact that our bank account was already opened when I moved here, waiting for me to start spending which, trust me, I already knew how to do well. It’s one of the few things Noisette got accomplished in the weeks he was here prior to the rest of us, much like I expected a shiny new car in my garage upon my arrival. Alas, the car was not to be, as you well know.
Anyway, opening a bank account is definitely your first order of business. I know other expats who manage to live here without one, but transferring money all the time is a huge hassle and not worth it, in my mind. A lot of the other things you will want to get, like a mobile phone contract, an internet connection, and yes, a car, will require you to have a bank account, or at least it will make things easier.
But which bank to pick? South Africa’s four largest banks are ABSA, FNB, Standard Bank, and Nedbank. Their services are all similar, and you will have to get used to the fact that they will all charge you fees for just about everything. To deposit money. To withdraw money. Maintenance fees. Foreign exchange fees. If you want to research all of their fees to make sure you get the best deal, feel free. I personally think it’s a good idea to pick a bank that has a branch fairly close to your home, and ATMs in places that are safe and that you frequent often, like your closest shopping centre. A reader of mine recommended Investec for their excellent customer service and reasonable monthly fees, so that’s also worth a try.
It’s possible to open your bank account from abroad, I think, but I’m sure it’ll be easier to do in person as soon as you’ve arrived. Just as long as you’re prepared to plan enough time for it. Remember, you are now on African time and things don’t get simply checked off your list just because you’re willing it to be so. The best way to avoid numerous trips is to come armed with, well, everything you can think of. This is what I would bring:
- Proof of identity (passport, including visa/work permit)
- Proof of residency (i.e. utility bill, but if you have just moved here a copy of your lease agreement is best; and yes, bring the entire agreement)
- Bank draft or cash in South African Rand (ZAR) to put a starting deposit into your account; having a minimum balance may reduce your monthly service fees
- Statement or reference from your existing bank
- Letter from your employer stating your monthly salary
Oh, and make sure you put everyone’s name on the account who will be using it. South African banks don’t offer joint accounts, so as a spouse I’m forever relegated to a somewhat lesser status than Noisette when it comes to money issues. It is very important you at least get your name on there. And remember how you spelled it (initials or full first name etc) because if you then later have your cable TV turned off because your monthly auto pay (also called stop order) didn’t go through you’ll know it’s because the spelling didn’t match.
While you’re there, let them also set up and explain their internet banking in every detail. You will use that a ton. In fact, most every transaction in South Africa, whether it’s making a deposit on your first safari or paying the kids’ piano lessons, occurs via Electronic Funds Transfer (EFT). Once you get that going it’s a breeze to use, but I remember it took quite some time to set up, what with all the passwords you need to register it. Also think about what kind of SMS alert you want. And to whose phone. I can assure you what you DON’T want is an SMS to your husband every time you make a purchase. It took me quite some time to get THAT fixed.
What you should come home with after setting up your account is three cards: A debit card, which you’ll use to get cash at the ATM and pay most of your in-store purchases, a credit card which comes in handy for online purchases, just as long as you set it up for something called 3D-Secure Checkout (another instance where you have to make sure the spelling of your name is exactly as the bank has listed it, trust me, I know these things), and a garage card. That last one is for paying for gas at the pump, because gas stations don’t accept regular debit or credit cards.*
Another thing worth pondering: South Africa has in place something very few countries still use that is called Exchange Control Regulations, meaning there is no free flow of money in and out of the country. The Reserve Bank of South Africa, believe it or not, oversees all capital in- and outflows. Which goes a long way to explaining why I had to have fifteen forms stamped and show all sorts of identification when I simply wanted to get some U.S. dollars the other day. Another errand NOT done quickly. What this also means is that any incoming foreign exchange funds will be scrutinized and you will have to explain yourself. I get an email from our bank every time we get any healthcare reimbursements from the U.S. asking me to explain what it is. Think about that before setting up your salary arrangements with your employer. It might be easier to be paid in local currency from a domestic bank.
Oh, and I can think of another banking-related issue: When you move, don’t give your home bank your new South African address to forward mail to. Keep an address in your home country for that purpose, and set up some kind of arrangement to have a mail pouch shipped to your front door periodically via Fedex or DHL. The South African Postal Service cannot be trusted, and they seem to have an especially keen eye for foreign credit and bank card replacements sent in the mail. I can guarantee you that if you have your foreign card sent to you through the mail that it will not get here. What will get here, however, is a puzzled query from your home bank if you REALLY want $30,000 transferred to some bank in Nigeria. If you’re lucky.
Have I forgotten anything? I think that’s it. Happy banking, everyone!
* UPDATE 5/2015: Garage cards are no longer issued or required in South Africa.