08 Aug 2024
Over 281 million migrants are living in countries other than their own to earn a living to offer financial aid back home through money transfer. Developed countries offer work opportunities in every professional field. But have you ever thought about opening a savings account while living abroad?
The problem is that the requirements to open a savings account in a foreign country are slightly different than your native country. Opening a savings account abroad helps you with saving money, which is what you should be focusing on while living in a foreign country as a migrant.
This blog walks you through all you must know about opening a savings account abroad.
Opening a savings account or any other account type in a developed country like the UK, Canada, Australia, and so on is never easy. Not because the process is complicated. But simply because developed countries have robust economies which means their financial markets are filled with diverse financial institutions.
The diversity in this particular area makes it challenging for you to choose the right service provider and financial institution from the given options. Banks, therefore, specialize in certain financial operations, while offering overall financial services and products.
For example:
· Certain banks specialise only in offering you savings products and services
· Certain banks specialise in retail banking
· Some banks might offer a seamless process for online money transfer.
· Some banks offer you a bit of every financial service and product there is
Therefore, consider the following essential steps to open a savings account in a foreign country while keeping in mind what is explained above.
The first step is to decide why you want to open a savings account in the first place. The name says it all -- the purpose is savings. But then ask yourself the following questions:
The next step is to choose the right bank for this purpose. Now that you have decided to open a savings account because the answers to the preceding questions are positive, make sure to find the right bank type. The right bank type here means the banks that specialise in offering you the best savings services and products. Make sure to avoid landing in the lap of a bank specializing in retail banking to open a savings account.
After selecting some of the banks offering the best savings services and products, draw comparisons between their services.
It is important. Normally every shortlisted bank you go to will paint their services as the best in the market.
But how do you know they are the best?
Now you seem to get the idea fully.
Some of the areas to draw comparisons in are:
· Market-competitive annual percentage yield (APY)
· Account opening balance requirement
· Monthly fees
· Access to fee-free ATM services
· Branch and service accessibility
· Access and availability to mobile banking services
· Insurance coverage
Furthermore, also see if a bank is suitable as a money transfer service provider or is fit for savings only.
Documentation might seem a complex part of the entire process but not in the legal or financial sense. It is complicated in the sense that different banks will ask you to provide different documents for opening a savings account. Some of the banks may well ask you to get your documents – some or all – verified by certain authorities.
However, listed below are some documents that almost every bank in a foreign country will ask you to produce.
· Driver’s license or passport
· Your Social Security Number (if applicable)
· Proof of your current address
· Contact information including email address and phone number
· Letter of your current employment
· Information about your other bank accounts (if applicable)
Whether you are opening a savings account or a checking account, discuss if you need to open a joint account or an individual account. In a joint account, you give access to the account and the funds to another person.
This typically happens in business accounts to ensure transparency but you can explore this option in your savings account too. In the entire process, keep one thing in your mind which is that banks grapple with many operational risks and challenges. Click HERE, if you are interested in learning about these.
After all of this, submit your application, make an initial deposit, and wait a while. The wait is not long. Gone are the days when you had to wait several working days to get your account operational and running. Now you can just sit in the concerned branch post-submission and there you go! Your savings account in a foreign country is open, running, and operational!
Does it not occur to you why you need to open a savings account? Well, if it does, then the straight answer is to save money. Here’s how and quickly!
· Live on a budget and follow it strictly
· Slash expenses where you can
· Create an emergency fund and add money to it regularly
· Save first and spend later to increase your savings
· Use public transport for commuting to travel more and pay less
· Share accommodation to reduce accommodation costs by dividing them
· Draw comparisons between different service providers
· Differentiate between needs and wants
· Cook at home as it will save you a lot of money
· Search the market before doing grocery to find cost-effective deals
· Choose your remittance transfer service provider wisely
· Track your income and expenses
· Set realistic financial goals and work smartly to achieve them
· Find diverse investment opportunities and thoroughly check the risks involved before investing
· Seek professional financial advice for savings and smart financial management
Choosing a remittance transfer service provider to send money online is essential to save money. The reason is fairly simple. The process of sending funds online is repetitive and incurs costs. Therefore, make sure to find a service provider that offers you live and market-competitive currency exchange rates that will compensate you for the fee that you will pay in the process.
Also, look for a service provider that will offer speed, safety, and wide service access and availability coupled with professional liaison with many financial institutions to make service access easy for you. The icing on the cake is to find a company that charges you a low fee and still offers live and market-competitive currency exchange rates for fee compensation.
As soon as you arrive in a developed country, you are required to open a bank account for the processing of your money. In developed countries, the trend of using cash is on the decline. Therefore, people are shifting to plastic and digital currency for which having a bank account is critically important.
A savings account is a type of bank account in which you deposit your funds for a specified time. During the time for which you have opened a savings account, your funds remain largely out of reach and the interest you earn on your deposit automatically adds to the principal amount and thus your wealth grows.
Savings accounts have several types. But most typically, a savings account has two main types. Short-term savings account and long-term savings account. In the short-term savings account the duration for which you keep your funds is short. While in the long-term savings account the duration of deposit is long. The rate of interest depends on the terms and conditions and varies from bank to bank.
You can save money by living on a budget, tracking your income and expenses, slashing expenses where you easily can, saving first and spending later, paying off bigger debts first, sharing accommodation, commuting by public transport, searching the market for groceries, understanding the difference between needs and wants, and so on.
Yes. You can send money online through banks but banks are not, have never been, ideal for online money transfers as they charge a fee, offer uncompetitive and static currency exchange rates, take several days to deliver funds, charge an additional amount for currency conversion and involve immense paperwork and commuting hazards that incur costs.
