La Ronda is just around the corner

Thursday, May 24, 2012

Is it worth opening additional bank accounts to save $22 in Ecuador? May 2012.

Part one
http://dayinquito.blogspot.com/2012/05/us-banking-while-living-in-ecuador-as.html

Part two
http://dayinquito.blogspot.com/2012/05/is-it-worth-waiting-in-ecuadorian-banks.html

Part three
Comment from another reader:
Schwab banking services have also been recommended to us by expats.
My opinion:
Is it worth opening additional banks accounts to save $22 per 3-4 months?  I prefer to keep it simple, even if it cost me $22 more in a duration of 3-4 months.  Banking is banking.  It is not a charity.  It will charge you ALWAYS.

If you already have a relationship with a US based bank with good customer service by phone and a solid, with a lot of functionality, website, my advice is - keep it and use it while living in Ecuador.  If you have an urge to save $22, (figure of speech) read the story about a formerly great bank with the lowest fees and higher interest rates on a saving accounts (at one time).  Well, it was sold in 2011. My girlfriend has an account with them and lately she has discovered unpleasant changes in their once-reliable service.
http://moneyland.time.com/2011/06/17/capital-one-buys-ing-direct-and-customers-start-to-freak-out/

I opened an account at Wells Fargo long before going to Ecuador, because it has branches almost everywhere in the USA,  outstanding customer service by phone, (their customer service becomes annoying at the local branches), and a solid website with a lot of functionality.
I picked Pichincha bank in Ecuador because, again, it has branches everywhere, it has stricter rules than other Ecuadorian banks, (for me this is a very good sign), and a very high rating.  The very solid, functional website of Bank Pichincha helps as well
http://dayinquito.blogspot.com/2011/10/banking-in-ecuador-october-2011.html

To add more banks to my plate or to abandon my current banks for some who promise little savings, to make life more complicated - standing in extra lines and having extra accounts.  No, no and many more times no.

Instead of wasting time on these questionable  savings strategies I would financially educate myself.  I would read about Quantitative easing (QE) and think how it will impact my livelihood.  I would learn some surviving skills and figure out how to create cash flow. 
When you have "minimum balance at Wells to avoid these fees, but that minimum includes the total of all monies in savings, checking, IRA's, CD's, and any other acounts, and is not excessive." - consider  what Federal Banks around the globe do with the money supply nowdays (Quantitative easing and other evil practices).  Right now, to have money in the bank in any form - it is like feeding your money to the beast.

These USA expats, who live on government payments, I want to tell you what happened with USSR pensioners (and others who had savings in USSR banks) in the 1990s.
The situation in Russia, in the 1990s, was:
" The money supply continued to grow.  The Central Bank (of Russia) and the government (of Russia) believed that issuing more money would create more demand, and stop the economic decline.  Instead, it all ended in catastrophe, with “Black Tuesday”, when the ruble lost about a third of its value against the dollar."

These of retirees, (in the former USSR), who didn't grow their own food or have other skills to survive, when their pensions and paper currency savings all of a sudden (overnight) lost its value, some of them committed suicide and those who didn't - live(d) in extreme poverty.
My parents used to grow food, for us to consume and for sale,  and they invested their money to buy our two apartments (back then, in Russia, you could buy an apartment you already lived in from the goverment).  We didn't even notice this "Black Tuesday"

If you think "Black Tuesday" or "banking holiday" cannot happen in the USA, think again.  Saving $22 (a figure of speech) once in a while, won't save you.  Thinking strategically might.




Monthly rental in Quito, for tourists and expats.