As I recently discovered, European banking is completely different from U.S. banking. When I first arrived in France, I was completely baffled: How do you open a bank account in Europe?
And while I have a Charles Schwab debit card that allows me to pay abroad with no international transaction fees, I recently decided that I need a French bank account for a few reasons:
I am working as an au pair in Paris and need somewhere to deposit the money I am earning.
I need a card with a “chip” in it. (See the small silver box on the left side of the card below?) There are many places in Europe where you can't swipe with your card (like the Paris métro for example), and must pay with a card that has a chip.
In Europe, the debit and credit card system works very differently. There are basically two cards: ATM cards and credit cards. An ATM card can only take cash out of an ATM and can't make purchases. A credit card can charge credit as well as take cash out of the ATM; it's like a combination of a debit and credit card.
Advice for opening an account in Europe:
- Schedule an appointment with an English-speaking banker. Sit down with him or her and talk about your options, and make sure to read the fine print regarding online banking, monthly charges, etc.
- Even if you speak the local language fluently, bring along a local because you may not understand all the banking terms or contract differences between your own country.
- Bring along your passport, your proof of residence (like a utility bill or rental agreement, or bring your host's proof of residence if you're staying with a family) and any kind of paperwork that proves you are working or studying in Europe.
- Open the bank account once you get to Europe; it will be easier than opening it from your home country.
- Make sure that your bank charges a flat fee as opposed to a percentage when transferring funds to a non-Euro bank account, so that when you leave the country for good the bank charges you around 20 euros to transfer your money into your bank account back home, as opposed to taking a percentage. Imagine losing 3% of all of your money!
- Choose a bank that's close to your house or apartment because in Europe you have to go into the bank more often than in the U.S.
- Study abroad students can also open bank accounts in Europe, they just need to bring proof that they are in fact studying abroad.
What I learned about French banking, and especially CIC, the bank I chose:
I decided to open a bank account with French bank CIC simply because it's close to my house and because the lady I work for banks there. Luckily the bank's policies are quite fair (besides the absurd charge to access my bank account online) so I think I made a good choice.
- At all banks in France you are assigned a pin code for your ATM or credit card, and can't choose one like in the United States.
- In France I have found that the best way to transfer my money into and out of the country is by using the Xendpay money transfer service. It's so easy!
- CIC charges no ATM withdrawal fees anywhere within the Eurozone (any country that uses the Euro). Even if you withdrawal at a non-CIC ATM there will be no charges. If you are paying or taking money out of an ATM outside of the Eurozone, the bank will charge you a fee (i.e. if you were in the U.K., United States, etc.)
- CIC charges for online access to your bank account, but if you pay 2.50 euros a month you get unlimited access so that's what I chose to do.
- At CIC sends you your PIN code in the mail, but you have to come into the bank to pick up your new card.
- At CIC you can't overdraft your account (the card will be denied once it has no money left).
- CIC charges about 20 euros to transfer funds to a non-Euro account.
Am I missing any important points? If you have opened a bank account abroad what was your experience like?