Banking in Mexico is most likely going to be a different experience then where you are from. For example twice a month banks have lines out the door and at ATMs. This is because everyone in Mexico gets paid twice a month, the 1st. and 15th of the month more of less. Some other differences are the fact that most things are paid in cash and actually setting up online bill pay is still in the infancy stage, most accounts come with an electronic code keychain device for logging in online, cash, rather then credit cards is used a lot more in Mexico and long lines are normal in banks. These are just some of the different things you can expect to encounter in Mexico.
The first thing to consider about opening a bank account in Mexico is do you need one? It really depends on how long you plan on being in Mexico and your personal situation. Not all people that are going to be living here need an account and the ease of keeping what you have may outway the paperwork and time of learning about your new bank account.
Who could go without a bank account in Mexico?
1. You are going to be here on a tourist visa for six months and then leave and come back for an additional stay.
Note: It is possible to open a bank account with a tourist visa if you want one. But not all banks will do this.
2. You do not plan on buying a home here.
3. You don’t have a lot of money. You do not want to open an account only to pay fees for low balance.
4. You are not going to be working in Mexico for a company.
5. You have a bank in your home country and can easily access cash by ATM card.
Note: Notify your bank that you are going to be out of the country for the dates you are in Mexico. That way you can use your ATM card without it being frozen due to what looks like fraud.
Who should open a bank account in Mexico?
1. You plan on staying in Mexico more then one year.
2. You are going to be working for a Mexican Company (every company does direct deposit to a Mexican bank account)
3. You are going to be purchasing a home.
4. If you are going to be purchasing a lot of items, having a Peso backed credit card comes in handy and saves fees.
5. You want to try your hand at transferring money between pesos and another currency in order to make money.
6. You want to make interest. (Mexico has much better interest rates on bank accounts then most other countries.)
Which Bank should you use in Playa del Carmen?
After considering if you need to open a bank account in Mexico the next question is what bank should you choose. The big banks in Mexico are Banamex, Bancomer, Banorte , HSBC, Santander and Scotiabank. The banks of Bancomer, Santander and Banorte are basically the same thing, just basic banks where most expats do not have accounts. Santander is the most popular bank for locals. They tend to have the longest lines at payday and there service is nothing special either, so just remember this when shopping around for a bank. Banamex, HSBC and Scotiabank are popular because they have affiliate banks in other countries and they link accounts which is an advantage. Citibank actually owns Banamex and just has not changed the name or logo. HSBC is globally recognized and Scotiabank is popular with Canadians because of the availability to link with the Canadian counterpart.
If you are a current HSBC or Citibank customer and are an upper level account holder there are substantial benefits you can get in Mexico. Some or all of these can be true depending on the bank and your account: your credit history can be transferred (although this does not really matter because credit history is not really used for anything in Mexico) better exchange rates then lower level customers of the same bank, better investment account opportunities with higher interest, the use and help of higher level executives at the bank, and a special card that allows you to use the business line at the bank and avoid long lines.
Bank Services in Playa Del Carmen
Interest rates are much higher here on savings then most countries. Depending on how long you leave your money in the rate goes up. It is about 1-3.5%. This is something to consider if you are going to retire and have some cash in the bank. It is extra income and best of all, it is not taxed in Mexico. The money you make on interest in Mexico is not taxed because it has already been figured into the rate. It might be a big confusing to you though when you ask about interest rates at your bank in Mexico. Most people are used to a monthly amount or year percentage. Here it often is done in a several month term with the first part getting lower interest rate for that period and then a much higher rate when in the final period. It might be very complicated to figure out the actual rate. This is done in Mexico because the value of the peso fluctuates so much, so does the interest rate. But at any rate it is good.
Tourist using banks in Mexico
Money exchange. Most banks will allow non customers to come in and exchange money. This however is not a very efficient way of doing it for tourist. It is better to use currency exchange booths on the street or your ATM card.
Investment and money exchange
For customers that have large amounts of money that you want to bring into the country you many want to consider a company like Monex which is a banking institution that is very popular with people purchasing property here. They offer completive rates and when you are transferring hundreds of thousands of dollars a small percentage can mean thousands in savings with a better rate. Just keep this in mind if you are purchasing a home and compare them to your local bank in Mexico. Note: Laws are constantly changing and this has affected Monex. They only offer services to clients that will keep 300,000 pesos in a account with them. So if you are going to just transfer money to buy a property and not keep money in an investment account, then they will no open an account for you. If you are going to open a corporation in Mexico this 300,000 limit is waved.
If you are going to be transferring money to your Mexican account, your regular bank can offer good rates as well and may be easier then including a third banking institution like Monex
Can you get a loan or home equity loan in Mexico? Yes you can but you can expect the rates to be high. Most loans based on the type of customer you are range from 11%-34%. Most people in Mexico pay upward of 30% on credit cards and loans, so don’t expect to come here and get a loan to do much without a heap of debt. Home equity loans are hard to get and usually only done for permanent residents.
Credit cards can come in handy if you purchase a lot of items in Mexico like plane tickets or car rentals. It can also come in handy to have a credit card issued here because if a card is stolen then replacing a card issued in another country can take time and expense.
Note: Some services like credit cards are only available for permanent residents of Mexico with visa.
Advice from bank represenatives
When we asked bank executives what advice they had for foreigners that wanted to open accounts here they told us to have all your paperwork together and keep everything. If you loose log in numbers and account numbers you can see a representative at the bank but this can take time and if you are in the process of completing an important transaction it can slow things down.
It should also be noted that Mexican bank accounts are insured much like how the FDIC works in the United States.
Many people in Playa Del Carmen have found Banamex to be a good choice because of their policies and relationship with Citibank. The branch on 30th Avenue and 12th Street is technically an international branch and it is supposed to be bilingual. There are several people there at desk and behind the counter that can help you in English.
Your Bank account back home
Just a few tips for your account back home.
1. Make sure you have a current address for your bank and credit cards. If you loose anything and need a replacement or the date expires and they send a new card to the address on file, you can save a lot of hassle if things are up-to-date.
2. If you have moved on a more permanent basis but still have left an account open check the phone number on file because this can be used for verification by the bank or credit card company. If you have gotten rid of a phone or will not have access to it, then it is good to have a friends number or a Mexican number on file.
3. Try to go paperless so all your statements will go to your inbox or online. Less paper trail means less information out there for people looking to take the information. Even if you have a mail forwarding service, having online statements is a sure way of having access to them.
Laws change, so keep up to date!
Laws in Mexico and other countries are constantly changing. For example if you are a US citizen and now you move more then $10,000 to a bank in another country, you are required to file a FBAR form according to the IRS. In Mexico in 2013 there was a law that taxed a deposits over 15,000 pesos a month. This was to prevent cash deposits from drug sales or illegal sources. Now that law is gone and you can deposit as much cash as you want to without a tax. Keep up-to-date as countries regulations change so you can fulfill your legal opportunities.
Note: For research for this story we spoke with several bank executives to ask about services that their banks offered here in Playa Del Carmen (we cannot mention their names though since they are not official bank spokespersons).