Best US Bank For RTW Travel?

Anybody have any suggestions of the best US bank to use during RTW trips? Are there any that don't charge international fees and have a good network of ATM's that they don't charge on, and that are known for having good conversion rates? So I guess I'm asking if there is an American "dream bank" for travellers. haha.

What do my fellow American globe-trekkers choose to use? (The least evil one is my guess of the answer I'm really going to get).

What about Credit Cards? I have a nice Capital One with no international fees/annual fee/etc. (They even gave me a year of $0 interest when I first opened it!). Any other companies known to have this no international fee benefit? Or ones that are known for great conversion rates?

Finally, and kind of as a side note... I think I need to move my savings into a better savings account. I just realized that I'm only getting .20% interest on my account. That sounds pretty dang bad to me!!! I'm obviously going to do some research on this one, and realize this may not be the best place to ask on that, but I figured I'd throw it out there while I'm asking about bank-related stuff. :)

Thanks!

~Nicole

I use Schwab Investor Checking. I've written about it before so do a search for Schwab or look under my username. Best idea is to use a debt card instead of a credit card. Debit cards exist without all the international fees (see Schwab) and can be used like credit cards. The only no international fee one I knew of was Capital One but I think they've changed that now.

The first post on this branch, titled, Welcome to the Gap Year has a link to an FAQ on credit cards and debit cards. Try reading some of it.

Thanks BpGuruagain. I had clicked on it before I posted and EVERYTHING appeared to be very old (2004...). I didn't want to rely on that being current information, as banks cange policies/run promotions/etc. I just went back and clicked further than I had before and see there are a few more recent posts (albeit not many, and hard to sort through what countries and conversations that have been going on for several years worth of posts).

I'll try to sort through for some more informaion but I'd still love to hear from anybody who is willing to share their insight on this thread as well. It never hurts to get fresh eyes to look at a question. They may be like me and have a hard time sitting and reading hundreds of posts from the last several years to add insight that hasn't already been mentioned.

Thanks. :)

The key is to find a bank that has some sort of account that charges no fees for withdrawals from other ATM's. Most banks will offer such an account, but there will likely be some sort of minimum balance requirement. Credit unions often feature these as well.

The brokerages offer another option worth exploring, as #1 suggested.

Some of the major banks tout accounts that allow for free withdrawals from affiliated ATM's, but this is somewhat disingenuous. The withdrawal fees for international withdrawals are determined by the bank which maintains your account; Cirrus and Plus do not permit banks to charge withdrawal fees to their international customers, so in the case of these accounts, it is your bank that is deciding to selectively charge you the fee, and it has nothing to do with the overseas bank whose ATM you are using. You can do better by getting an account that charges no fees, regardless of which ATM you use.

Banking in the US is still largely not a national business, so your choices will vary somewhat based upon where you live. Again, most banks have a no-fee account, so it's a matter of choosing the right account, more so than it is about choosing the right bank.

There are 2 basic fees you need to look for. A transaction fee (your bank charges say $3 per withdrawal) and an exchange fee (your bank charges say 3% of the amount changed)

Transaction fees are not charged by the owner of the ATM you use in another country. They are charged by YOUR bank at home.

Exchange fees are often not shown as 'fees' as such, they simply bury them in the exchange rate they use. So a lot of banks will advertise 'fee free overseas ATM use' when in fact all they are referring to are transaction fees not being charged. What you need to know is what exchange rate you will receive relative to the Interbank Rate or Visa Rate which are now one and the same. Banks will sometimes advertise or respond with the phrase, 'based on the Visa Rate'. This is not good enough. BASED on something doesn't mean you get that exact something.

The exchange rate you get is far more important than transaction fees. You want to find the lowest exchange fees you can get. There is no clear and best answer in the USA unfortunately. It varies by area and changes from time to time. For someone going on a 2 week vacation it probably isn't worth the effort to find the best deal. Saving 3% on the exchange of a couple of thousand is no biggy. But for someone who plans long term or repeated travel it does become worth the effort. Do the math.

Whatever you do, DO NOT believe any claim of being 'fee free' until you have had answers to the specific question of what rate of exchange you will receive relative to the Interbank or Visa Rate.

i use first republic...keep a 2500 balance & they take care of all transaction fees...theirs & the distributing atm bank

...usually i check in at a cybercafe after a withdrawal to verify the transaction & though there might initially be a charge on my account it is invariably erased within a day without any action on my part

..best to develope a relationship with your banker...ask them what you can do if you were down to your underwear but can get to a phone or cybercafe...

..in my case they will call my daughter in the states on a preordained phone number...she will verify my status & together they will work out where & how to send me money

...i wear a belt & suspenders so i carry 2 first republic atm cards...2 from other banks & 2 credit cards...

This is the go-to list; as noted, you want to minimize
a) the hassle of your bank (i.e., you don't want to be SOL if you lose a debit, or have a debit that doesn't work on Plus/Cirrus)
b) the per-ATM transaction fee charged by your bank (completely ridiculous, particularly for banks like Bank of America which charge an astounding $5 per foreign ATM transaction outside of their rather limited alliance network)
c) the percentage fee on the quoted exchange rate (this varies between 0 and 3%)
and maximize
d) the interest rate you're getting, which is only 3-4% at the best e-banks these days, but which will likely increase over the next year or so as the Fed begins to raise rates again.

http://www.flyerguide.com/wiki/index.php/Credit/Debit/ATM_Cards_and_Foreign_Exchange

The Flyerguide Wiki is updated fairly often. I wouldn't worry about the credit card since you'll probably only use it in emergencies, or to get the insurance on a car rental. I'd go with American Express since they have offices in an enormous number of overseas cities. The Starwood Amex is fee-free first year, and is widely considered to be a great card - you'll even get yourself a few free hotel rooms for your trip when you need a break from the hostel!

A good alternative is to check your local credit union - you'll be able to have a personal relationship with your banker so your ATM card won't get shut off (for fraud protection) just because you're using it overseas, and the credit unions are much less likely to charge you garbage fees.

(Also: it would be helpful if the Intro to Gap Year thread were replaced - there's far too much outdated information in that thread.)

The exchange rate you get is far more important than transaction fees.

Not really. The cost is typically 1% of the interbank rate (i.e. the best rate available). However, the tendency as of late is for banks to increase these fees, so 2-3% is no longer not so uncommon, particularly among the larger banking behemoths such as Bank of America. The likelihood of getting 0% (the interbank rate) is fairly low, and even if you get it, you can lose it later.

In contrast, an ATM withdrawal can now be as high as $5 per withdrawal, but you can find accounts that bring that to zero. On a $100 withdrawal, that's equivalent to saving 5%, and it's a fee that you can realistically expect to eliminate completely.

Here's the problem: If the bank increases the fee on the exchange rate, it's a matter of bank policy, and there isn't much that you can do about it. This could be increased retroactively, after you open your account. (For example, HSBC used to charge 1%, but now charges 3%. If that happened to you in the middle of a trip, there isn't much you could do about it.)

However, if you have enough money in your account, the ATM withdrawal fee can be waived if you negotiate. I've done this myself for one of my accounts -- the account began with a no-fee provision that was subsequently eliminated, but I negotiated with my bank manager to keep it for my own account. (The fee posts, and then a credit is posted to cancel it out.)

In the scheme of things, while 0% would be lovely and 1% is certainly good, 3% is not actually that bad. You would get a worse rate if changing travelers checks or cash, so in comparison to your alternatives, it's still a fairly good deal.

I'd say that 1% is a good target; if you can beat 1%, rejoice, but don't expect it. And don't count on having that cost forever, as the bank can increase that fee (and probably will eventually), at which point there isn't much you can do about it. You have more control over the ATM withdrawal fee.

why not just sign up with a bank like first republic if you can afford to let $2500 sit almost idle drawing only money market interest?...

...i'm sure first republic isn't the only bank...but they make no money on the transactions or commissions on conversion rates...in addition they absorb the foreign atm fees.

I suppose if you cash a piddling $100 at a time then the transaction fee will assume more importance. But really, the transaction fee should be of no consequence whatsoever since you should not be using a bank that charges ANY transaction fee at all. There are plenty that don't even in the USA. So you should only have the exchange cost to worry about since it is much harder to find a financial institution that charges no exchange fee at all unless you live in the UK and can open a Nationwide account.

Accounts like the one described by germuno which require you to maintain a certain balance may be available in your part of the USA Nicole or Credit Unions are often a good place to look for low exchange fees.

By the way Germuno, as you are probably aware, some US banks either ignore or are given permission to ignore the Visa ban on charging an ATM fee on foreign card withdrawals. Well little Borrego Springs Bank with only 3 branches charges no ATM user fee on my Canadian or UK cards while the Wells Fargo ATM in town charges $3 on those same cards. Tells me a lot about Wells Fargo.

But really, the transaction fee should be of no consequence whatsoever since you should not be using a bank that charges ANY transaction fee at all.

Most US banks charge transaction fees for currency exchanges; those that do not are the exceptions, not the rule.

Most US banks also charge withdrawal fees. But as noted, most of these banks offer some accounts that do not charge these fees. These are generally interest-bearing checking accounts with minimum balance requirements; the basic accounts will not generally be free of fees.

Credit unions can also be a good option, for those who are eligible to join one, as can the smaller banks. However, their networks may not always work as well, and many of them lack 24-hour customer service, which can be a problem if you are having difficulties from another time zone. Smaller financial institutions have their advantages and disadvantages.

some US banks either ignore or are given permission to ignore the Visa ban on charging an ATM fee on foreign card withdrawals.

It is legal in thirteen states for banks to ignore the Cirrus and Plus rules against charging ATM fees to international customers. They are busy lobbying to change the rules in the 37 other states where the fee prohibitions continue to be enforced.

Over time, we can all expect ATM usage to become more expensive. In the beginning, Cirrus and Plus were driving the business in order to lower their costs and to increase their usage by customers, but over time, banks have turned to these transactions also as a source of revenue. But using an ATM will probably always be competitive compared to the old ways of changing money, assuming that you can keep your bank fees to a minimum.

Roadwarrior, while I agree that most big banks charge forex (over 1%) and foreign ATM fees, any bank that charges these fees is not customer-friendly, and I say this as someone who has worked in bank regulation for the past 3 years.

Credit unions and many internet and local banks do not charge these fees (and also have many fewer "trick" fees in general, particularly compared to that most odious of banks, Bank of America). A traveler overseas for a year with 20k in the bank is giving up about $1200 by using BofA instead of a credit union or internet bank (assuming BoA charges $5/3%/0% interest on the account, the credit union charges $0/0%/3% interest on the account, an average of 10k is in the account over the year, and the traveler goes to the ATM once a week for a withdrawal). That's six percent of the trip budget! Back in the pre-ATM days, there was nothing you could do, but in 2008, a little work on the front end pays off hugely over the course of a trip.

I think that I've been fairly clear: Getting an account with fee-free withdrawals is realistic, particularly if you have enough money to hit the minimum balance requirements that are fairly typical. It is easy to avoid accounts with $5 withdrawal fees.

It is also realistic to get a 1% exchange fee based upon the interbank rate. While 0% is possible, it is not always plausible, and I wouldn't lose sleep if you end up paying 1%. A 1% fee, combined with an account with no fees for withdrawals, is far less than the alternative of changing travelers checks or cash.

I would never suggest using B of A for anything. High fees and bad service, the worst of both worlds.

what the hell is the problem here...simply get a bank like first republic...go in & shake your banker's hand...plan for the worst scenario...

...there is no reason to pay more than 0%...& atm's are arguably the safest way to safeguard your money on the road...but absolutely the most convenient way to obtain it

...incidentally first republic also gives free notary service

i don't like paying even 1%...that's a lot of money in a year's time...call me cheap if you want...but i hate work & i like my beer & smoke

Wow, amazing food for thought everyone!!!! Thanks so much!!!!!!!

Germuno, your First Republic sounds great. Unfortunately, I just checked and they don't have any branches in my state (Georgia).

I'm going to pour through all of this advice with a fine-toothed comb. Now I at least really will understand what to ask the local banks about to find the best one.... Which is clearly NOT my current bank, seeing as I use Bank Of America right now (I will say though, they have been great to work with for my 'domestic' banking. And their alliance network in Fiji and New Zealand was great when I went there so I didn't have those extra fees there. But I obviously see that other places in the world they aren't so accomodating! And I have no idea what I was getting charged with exchange rates on my Fiji/NZ trip. I didn't even know to plan for stuff like when I went on that trip. )

Looks like it's time to get on the phone soon so I'm not doing this one at the last minute. This seems like it will be one of the "easier" parts of the advance planning I am doing (well at least it doesn't require making decisions about which countries I can live with NOT going to!).

Thanks again!!!

I use my Schwab Investor Checking account like #1 Bunglegirl suggested. They refund all transaction fees back to your account and their money market checking fund pays a very competitive interest rate (something BPagain forgot to mention.) You'll have to check on the exchange cost which I'm guessing is the difference between the official exchange rate and the one the bank gives you.

I think backpackers and budget travelers probably only take out around a thousand dollars at a time, so not paying the ATM charge is important

Check out Schwab It's a pretty good deal. think you need $2500US to open an account.

raisuli...is this a misprint ?...

I think backpackers and budget travelers probably only take out around a thousand dollars at a time