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Current Version: 1
Last Updated Date: September 22, 2019
Current Version: 1
Last Updated Date: July 17, 2019
Many travelers we’ve met usually do not make significant changes in their banking simply for going on vacation. Philippines travelers on the other hand, they can be a different breed though. Do to the great many overseas Filipino workers, as well as balikbayan’s, and fiance visa seekers, the Philippines sees a lot more repeat travelers then many other countries in Asia.This unique situation requires special attention because many of these people, even those with accounts in different countries, will often get burned by their banks terrible conversion rates and/or fees! The good news is that for those living between the United States and the Philippines, there are some noteworthy money-saving expat banking strategies that are so surprisingly convent, that they will have you wondering why your current bank hasn’t gotten on-board.
Now before we get started, it’s important to note that many expats and/or their significant others, may be able to open up for a Banco De Oro (BDO), or Philippines National Bank (PNB) account with relative ease. If one lives near an office of one of these two banks in either California or New York, then they can walk in and open an account that can be used within the Philippines. The benefit to this is that it is easier for the foreigner to establish the Philippines bank account, and less of a security risk for the government to direct deposit Social Security income, DOD retirement, or VA compensation and Education benefits, then if this was attempted from within the Philippines. Needless to say many institutions will not direct deposit into Philippines bank accounts for security reasons, but the DOD for example, will direct deposit if the account is set up from within the United States. The VA and SS on the other hand simply require special authorization forms to set up the direct deposits, simply contact the most local office to get that set up. Lucky for veterans, the VA in Manila will help set up direct deposit into a local Philippines bank and take care of conversions on their end! If signing up for a Philippines bank account within the U.S is not an option for you, then you can open an account while you are living in the Philippines. To do this you will need to be a permanent resident that has access to an ACR Card to sign-up, or be married to a Filipino who has an account you can be added to.
PLEASE NOTE: Many people claim “this and that” about the Philippines, as a practice we will only provide you with what is legally legit. So in other words, as with all things in the Philippines, individual results may vary!
For many of you though, you may want to retain a U.S. bank account either way. Why? Well with a U.S. bank account you can still operate business as usual back home with free online bill pay features only available in U.S. bank accounts. Not only will you be able to continue your business back home, but you can do so with confidence that your money remains FDIC insured! Banks in the Philippines do not compare to banks in the U.S. at all! You will simply will have less headaches to deal with overall if you retain your accounts back home. Unfortunately, some U.S. banks make it very complicated and often impossible to retain their accounts on extended stays overseas. Not only this, but the majority of the banks in the U.S. will charge you downright ridiculous foreign transaction fees to use their account in another country! Lucky for U.S. residents though, their are a couple outstanding options for those of you who are looking to spend extended time overseas:
When deciding on a bank to use for your overseas travels, their are two major players to consider in the battle over foreign transaction fees: Charles Swab High Yield Investor Checking & Brokerage, and Capital One 360 Checking & Savings (formerly ING Direct Orange Checking & Savings). Naturally, each of these companies has their own pros and cons. Next we will do our best to highlight those differences, so that you can make an educated decision on the account that suites you best, then later we will provide you with some additional tips and tricks.
Foreign Transaction Fees:
Both accounts have no foreign transaction fees. This means you are covered from additional costs when using your account as either a debit or credit at any retail outlet, as well as dinning, and online shopping for example.
Foreign ATM Cash Withdrawals:
While both accounts will incur foreign transaction fees charged by the overseas bank (normally 200.00php or 4.27usd + 10% including poor local-bank exchange rates), Charles Swab’s Investor Checking account allows these fees to be refunded at the end of the month! I know what your thinking…whats the catch? There are a few: 1. Swab has no control over the exchange rate that you receive while using the foreign bank’s ATM, this means you are subject to poor local-bank exchange rates! While this might not be that big of a deal at first, it can become a big deal if you end up using cash from the ATM to pay large bills such as rent on a regular basis, or if you make a large number of ATM withdrawals over time. 2. Because of the way that these foreign ATM fees are combined in the transaction, they can more often then not be missed by Swab at the end of the month. This will require you to keep copies of all your ATM receipts so that they can be scanned and emailed/uploaded to Swab at the end of each month to request the credit difference…ugh! 3. As one can imagine, paying these fees on behalf of customers overseas cost Swab a lot of money. Swab expects that it’s customers traveling overseas will only be gone for a month and thus will have limited transactions, prolonged stays can cause issues like account-freezing long-term, but more on this later*.
Service & Security:
Both companies have exceptional customer service, you will never wait more then a couple minutes before speaking with a professional representative. Each bank is FDIC insured and is relatively secure, although Capital One 360 does have additional security features such as extra PIN’s or security images that can be the difference between being hacked or not. Comparing Capital One 360’s online banking to Charles Swab’s is like like comparing the luxury of Makiti city to slums of Marawi city! Swab is way behind the 8-ball on this one, the website is outdated, navigation is complicated, and their are many things that one can not simply do online thus requiring a phone call to swab. One relevant example of this are travel notices:
Travel notices are needed to prevent banks fraud detection security systems from flagging and preventing foreign transactions. While Swab requires a phone call every 30 days to keep your investor checking account on travel notice, Capital One 360’s travel notices can be done online for a year at a time! NOTE: If you have Capital One 360’s new chipped debit card, then you will no longer need to enter in travel notices!
Usability & Reliability:
While both accounts can be used just about anywhere with relative ease, there situations where one can eventually run into problems. Example? As previously mentioned, all banks require travel notices to be place while using their services overseas. Different banks have different policies in regard to how travel notices work, this because banks are often bound by something called laws. To make a long story short, depending on the bank, they may or may be able to cater a certain entity of their business (such as traditional checking) to those individuals residing overseas. Capital One 360 has no limitations for it’s expat customers who are living overseas, just as long as the customer retains a U.S. address (see this post on how to retain a U.S. physical address). In the case of Charles Swab, they are not legally able to let expat customers use their Investor Checking even if they have an “intent to return.” If Swab detects that the checking account is being used consistently overseas for a year, they will freeze your account until you can prove that you are living back in the United States, which can be more difficult then one would think! Unfortunately, legally speaking, retaining a U.S. physical address is not proof of actually being in the U.S. We have been told that Swab is notorious for permanently flagging an account that has been either frozen once before, of suspected to be used excessively overseas. Banks are not in business to pay thousands of dollars in ATM fees and conversion surcharges, we simply can not blame them for this. Don’t take it from us though, a quick google search will reveal many others who have experienced this account freezing. It is not our intention to put Charles Swab into a negative light, at the end of the day Swab is a great bank for most people. In-fact, they can be great for expats who are interested in investing at least $25,000.00 into one of Swab’s International Brokerage Accounts. Although there is always risk involved with investments, this type of Swab account can be used overseas permanently without issue!
For expats, people who are residing in the Philippines for extended periods of time (i.e. extending visa’s for over a year), we recommend the Capital One 360 Checking & Savings accounts combined with a linked Remitly account for free cash withdrawals*.
For tourists, people who are on vacation in the Philippines (i.e. staying for less then a year), we recommend the Charles Swab High Yield Investor Checking & Brokerage accounts.
No matter which of these two accounts you decide to use, it should be noted that if it’s possible in your situation to open a local Philippines bank account, that you should do so in addition to your Capital One 360 or Swab account. Why? Well, with a local Philippines account one can still utilize Remitly in combination with the BDO or PNB accounts. Remitly will allow a deposit directly into your Philippines account instead of going though the normal timely pickup procedures. This will allow you to easily, safely, and without fees that other banks charge, deposit funds as needed into your (or your significant others) Philippines bank account! This way you are not putting all of you direct deposit at risk all at one time inside a Philippines bank account. There are many reasons why one may want to consider this, but we will not go into that at this time, just use your imagination.
If you are having trouble accessing capitalone360 from within the Philippines, try emptying your browser cache, or use another browser such as Internet Explorer / Edge, or in the extremely rare occasion that doesn’t work, you can download the free Google Chrome Extension “Touch VPN,” to access U.S. only websites, or alternatively “Hotspot Shield VPN” and set it to Canada. I’ve only ran into this problem once, and using Edge cleared the issue, and Chrome works again.
Additionally, if you are having trouble with Remitly, they may ask you to email them your identification for security reasons, this is ok. If you want to avoid this, I would suggest sending money to yourself using someone else’s name as the sender such as a family member. If you have any questions please leave a comment below!