Expat: Please note that I am getting nothing for making this recommendation of my bank. I AM recommending this bank because it is the best US bank I have ever worked with, and I have worked with almost all of them at one time or another.
Please see important updated info important for anyone living permanently outside the U.S. with no US address or phone number at the end of this report. Update.
Report by the American Expat in Chiang Mai
Banks are not my friend. And I am probably no friend for any bank. Except for the one I have now, the Bank of Charles Schwab. I opened accounts with them over 5 years ago, and am so pleased with the service that they give me, I want to encourage others to do the same.
I think I have had every kind of problem possible with retail American banks. I don’t need to repeat them in detail, because any reader here has no doubt had most of these problems at one time or another themselves. Let me just summarize them: exorbitant fees, rude employees, customer service cannot understand the problem or even speak clear English, checks bounced unfairly, holding deposits, lost deposits, website doesn’t work right, etc., etc., etc. And I am not even mentioning how most of the big banks have also helped to destroy the American economy, bribe our elected politicians, get our Tax Money at no interest, be a part of the criminal organization known as the Federal Reserve, and pay themselves outrageous bonuses at the end of every year..
And the Bank of Charles Schwab is FDIC insured like all the other banks.
The Bank of Charles Schwab has no retail offices. They do have retail offices for their stock brokerage services, but that is actually a different company from the Bank. Doing business with Charles Schwab Bank has to be conducted by mail, phone and the internet. So if a person is very short of money where they often have to run down to their bank to make a deposit before a check is about clear, this Bank is probably not a good fit for them.
So here is what I like about the Bank of Charles Schwab:
Automatic Deposits are easily arranged. I have a few places in the US that send me a check, and now I have them automatically send to my Charles Schwab Bank Account.
It costs nothing. No fees whatsoever for normal banking work. No monthly service fee, no fee for online bill pay, no fee to make a payment, no fee if you deal with a person, no fees at all. If you do bounce a check, however, they charge about the same as retail banks, around $35. If you deposit a bad check which is returned to you, there is a charge of $5. But those are weird situations. I had one deposit of mine bounce because a regular retail bank (Wachovia Bank) I used decided to do the infamous one week deposit hold without telling me.
You can use your ATM in any ATM machine anywhere at no cost. Use the card in any State or any country. I use my Charles Schwab ATM card in Chiang Mai. The ATM machine always tells you that there will be a fee, starting at $3 and going up. It’s OK, because the Bank of Charles Schwab credits you at the end of the month for any ATM fees you have had. And Charles Schwab ATM cards are Visa Cards, the same as most any bank.
You get interest on your money in the Checking Account. OK, interest paid is not much anymore, but it might go up (when the US enters into it’s inflationary period). Every month, you get interest on your checking, and there is no minimum you need to keep in the account to get this.
No International Conversion Fee. This is one of the most important services for an Expat. Almost all banks (actually Charles Schwab is the only I found that does not) charge 3% on every International Transaction. On a thousand dollar airline ticket, that’s $30. For the Bank of Charles Schwab it is zero. Same for shopping at the Big C or Tesco in Thailand.
Toll Free Numbers (OK, these work only in the US, but they have long distance numbers for international use) are answered by people, not machines. AND, these people are in the US and speak perfect American English. AND I have found them to be more helpful than customer service for any other bank. They get it done immediately. And they are very courteous. (I know this is hard to believe, but you just need to try it and you will see).
Internet Services like online Bill Pay are very easy to use, and at no cost. There are some retail banks that charge me for paying my bills online. Not here. And the online site is super easy to maneuver. There is no limit in usage as with some other banks.
Deposits are made by mail, but Charles Schwab Bank pays for the Postage (within the US). They give postage paid envelopes to mail checks in for deposit. From California, I send a check today, and it usually goes into my account within 2 days.
Free Checks. Yea, they don’t even charge me for printing checks!
Bank of Charles Schwab takes automatic deposits. Like from a job or Social Security or whatever.
OK, here are some of the things the Bank of Charles Schwab cannot do:
Take Cash Deposits. That’s OK for me, because I will spend them in a store.
Drop by and chat with the tellers. Thank God.
Get Travelers Checks easily. Who needs these any more anyway?
Safety Deposit Boxes. My mattress is probably better.
Make you wait in line.
Get attitude from the bank employees.
Bottom Line: I encourage anyone paying regular bank fees to scoundrels in the big US banks check out the Bank of Charles Schwab.
IMPORTANT NOTE: Have discovered that there is a requirement for opening a Schwab bank account that you have a US address. Best to open this account BEFORE leaving the US, and assuming you maintain some kind of an address, use that address for the account.
UPDATE: For American Expats: I opened my Bank of Charles Schwab account when I was living in the US quite a few years ago. I still own a home in California, and still use that as my US mailing address and I have a phone number in the US. This bank has worked well for me because of all the reasons outline above. After being brought to my attention by a few readers of this post, I have learned that the Bank of Charles Schwab is not all that friendly to AMERICANS that living abroad, either permanently or just temporarily. So if you do not maintain a US address and phone number, you probably should not consider this bank.
In the direct words of representatives from the Bank of Charles Schwab:
At this time, there are eligibility requirements for the Schwab Bank investor Checking Account:
- All account owners must be either a US citizen or resident Alien.
- All account owners must reside in the US or one of its territories with a US mailing address and phone number.
- Account owners must have a social security number or tax ID
To even open a Schwab brokerage account, if you are an American but living overseas, you are subject to special rules applied to non-Americans. For an American to open a brokerage account, they are required to deposit $1000 to begin funding trades. Non-Americans are required to put up $25,000.
From an American guy on temporary overseas assignment that wanted to open a 401K account, he reports “I tried to explain that I was considered as being a US resident of a given State working abroad for an unspecified amount of time, but they insisted that such US residents are not US residents and that thus Americans abroad must be treated the same as non-US citizens.”
So if you consider yourself a full blooded, tax paying, concerned American living outside of the US permanently or temporarily, I am afraid the Bank of Charles Schwab is NOT a good choice after all.
Here’s a link to their site: http://www.schwabbank.com. 
The New American Expat is absolutely invaluable for somebody about to live abroad for the first time, but also provides necessary reminders of details that are easy to forget for people who have lived abroad before.
also,
(1) since they offer full brokerage and ira custodian and other banking services… you can consolidate all your accounts
(2) their mobile app is actually USEFUL
(2a) you can make remote CHECK DEPOSITS (by uploading photos of checks); this is prob my favorite feature
(3) for cash deposits i put it in some local bank and do a free wire transfer to schwab
Unfortunately, after opening my account from Australia (I’m a US citizen with a valid driver’s license and my mother’s US mailing address), they closed it after realizing my application was done from a non-US computer and I was not able to validate my identity in a branch in person. So, Schwab didn’t work out for me.
In the case of Schwab, there are no branches to visit to verify identity or anything else. I have done everything with this bank, including opening the account, on line. I must say that when I call them, they have the most helpful customer service of any other bank people I have dealt with (and I have sorta a bad attitude towards bankers in general). You might try calling them and discussing your particulars with them. For one, they are all American so they truly understand what you are talking about (as opposed to some customer service department in India or other far away place). I have auto deposit coming in from social security and a number of other income sources, do all my bill paying on line, and draw out money anywhere — including any ATM in Thailand — for absouletley no cost. Plus — a biggie for me — there is no “conversion fee” which almost all other banks charge on top of everything else. And, like I said above, dealing with the Schwab guys on the phone has been very good — I am understood, and they get the job done well. I have banked with almost every bank on Earth at some time, and Schwab has been the very best. Have been with them now for about 10 years, and have referred many friends to them that report back positively.
Here is the exact text they sent me:
> “However, there is an issue with your account that requires your attention. During the account opening process, it was determined that your online application was submitted in a different country. Due to account verification requirements, your account is currently restricted until we are able to verify your identity in a Schwab branch. You must visit a local Schwab branch with two forms of identification (one of which must be a “primary” form of identification).”
When was the last time you referred someone successfully? Perhaps these are recent changes?
I will be checking with the Schwab Bank people directly about this issue, and will get back to you. Must say that when I originally opened the bank account, I was in the US. But I am a little perplexed because you do have a legit US location and ID, but you just happen to be outside of the US at this time (which shows up in the computer IP location). From my novice viewpoint, I can’t see the problem for the Bank. They can verify your address by mailing something to it and can verify the validity of the ID. So, WTF? This is a really good question for me, and I will enjoy getting the straight scoop on this.
(Note: am traveling about Thailand at the moment, so I may have wait till I get back to my home in Chiang Mai).
They did the same thing to me – the second they realized I didn’t have a physical U.S. Address, they denied me an account. I tried it again using a PMB but they were on to that too and denied me again.
What is a PMB?
Since my Schwab failure, I’ve had success with USAA, who even accepted a foreign address! Many people incorrectly perceive them as being only available to military, but that’s for the insurance and other products. The free checking account is available to all.
I’ve also setup an account with Simple(.com), but I was on a 2-year waiting list. They’re purely online, so no branch validation required there either.
Thanks for the good tips, Jay. I will check these out. I have written to my special contact at Schwab Bank for an explanation, clarification or something, and will report on what they tell me.. I opened my account with them in the US, and do have a US address to collect what little mail comes my way there. For me, Schwab Bank has been great, the best I have had — and so much better than the criminal retail banks in the US like BofA, Chase, Citibank, etc. I will for sure check out the two suggestions you have made — with Simple(.com) having a long waiting list indicates to me that a lot of people must think they are very good.
Wait till they find out you are not a resident, then they will cancel you. I’ve read many accounts of that happening with Schwab.
I will see soon. But I do still own a house in California that is the address for my mail.
OK – Please see my update added to this posting about Bank of Charles Schwab. Seems like they are no longer friendly to any American that decides to get out of the country, even on a temporary stay for an overseas assignment. It is too bad for them, because they are missing a massive depositor attraction. It seems that expats are the piranha for the world’s financial community, and fair game for the far reaches of the IRS and other US federal government control bureaucracies. I will continue my quest for “good guys” in the banking biz, and try to keep at optimistic outlook (and maybe just stock up on gold).
Good job getting a conclusive answer. As said, my experience with USAA has been fantastic. I did not even need to use my US mailing address. They shipped my debit card to Australia. Service and support has been excellent too.
Hi
I also tried calling and opening up a charles schwab account but since i am abroad they wouldn’t let me do it.
also they said if i plan on living abroad for more than 6 months than i should open an international account
what us credit card would you recommend to use abroad? i’d like to build credit in the US while away.
i’m thinking about getting a simple charles schwab checking account while i’m abroad as i will be getting paid in foreign currency and i like that there will be no conversion fee or atm fees (“We offer a rebate on these fees assessed by others: For Interest Checking, Regular Checking, and Basic Checking up to first 6 transactions not to exceed $9.00 per statement period.” – so this means it covers the first 9$ total in fees accrued per month?). since i will be on temporary assignments for a few months i wont be opening local accounts. it’s early years for me and i wont be making enough to warrant a brokerage or 401k account. i just want to be able to take money out with a visa atm card, not worry about fees, not worry about conversion fees when i get paid in foreign currency directly in to my account, and be able to use the visa card to make direct payments (like a credit card) that automatically debits my account without conversion fee. i’m in the US now so i’ll do it before i go. are my plans sound and what do you think about credit cards? thanks!
If you use a credit card abroad, you must be prepared for some fees that I consider outrageous. Just about every card on Earth will charge a “Conversion Fee” of 3% for converting the currency to US dollars. I have used a credit card in the US for a foreign carrier (EVA) which ran the charge through their US bank account, yet my bank still charged me this fee (I fought this one and lost). Then, of course, you will have an exchange rate that is less favorable to you than on the street. If you use most ATM cards, there is also a hefty ATM fee for using an ATM not owned by your bank. Credit cards are very useful in making hotel reservations, but personally I would avoid using credit cards very much if at all. It took me about 20 years of adult life to learn that Banks are NOT my Friend.
A Bank of Charles Schwab account has particular advantages, like NO CONVERSION FEE and NO ATM FEE. Plus the account is free (which is $9), and you even get a little interest on your account. You will still get charged for extra services, like wiring money or if you have a NSF check.
To open a Schwab Bank Account, they do require you to open a brokerage account first, and you can just let it sit there. When the bank account is open, you just transfer it to your checking account (I have had a brokerage acct with zero in it for years). You also must have a US address to open a Schwab Acct. They do not want to open an account for anyone permanently living outside of the US (I have a California home as an address).
I spent a great deal of my life worrying and working to improve my credit score so I could borrow more money from banks. Now as an old guy, I see all this as foolish. Having debt to a bank is something you will always be the loser on. In my later working years, I paid off everything and went to all cash lifestyle (all except my US home mortgage, and if I had done better planning, I could have avoided even this). So I am in that minority of people that are debt adverse. My personal belief is that you should have as little to do with banks as you can in life, not worry about that magical credit rating, and avoid all loans as much as possible.
I use Capital One – no foreign transaction fees. My Bank of America card also doesn’t charge foreign transaction fees (though many BofA cards do charge the fee) For ATMs there is no fee with my Bank of America account for a variety of foreign ATMs.
I have a question about Schwab Bank, with whom I have an account. I have been in Peru for close to six months and plan on living here as an expat. I love that a Schwab doesn’t charge me to use ATM’s, but have recently been reading about how my account may be closed after six months of living abroad. I’d call Schawb’s very helpful customer service, but am afraid of drawing attention to my situation so I’ll ask here.
I am a US citizen using a relatives address in the states for mail and other official purposes. Can I get around this six month limit by making an online purchase using my debit card at least once every six months and having it sent to my US address? Can I open an ‘International Account’ with Schwab while in Peru, using my US address and details, and will this get me around the six month limit?
Schwab is by far the best bank I have ever dealt with and I’d hate to lose this account with all of its benefits for expats, uh, I mean ‘international travelers.’ Thanks for any response.
The way you laid it out to me is that you are an American with an American address that spends part of the year in Peru. Does not seem like you need to volunteer more info than that. I do not know about any “international account” at Bank of Charles Schwab.
I’m thinking Schawb’s computer sorts out when domestic purchases haven’t been made in a six month period and alerts a bank employee or just cancels the account. I’m not planning on calling them to volunteer any info, but am more worried about their computers picking me up. Changing my iTunes account to withdraw from Schwab when I make a purchase and figure I’ll just make a couple of other purchases a year. Further investigation shows they have an international account, but it has high balance requirements and many hoops to jump through. I also take out the maximum allowed per withdrawal so that I’m not using the card every day or two like I would in the states. Hopefully if I don’t abuse the privilege I’ll be overlooked