Reader Didact, always full of great and insightful comments, chimed in recently in response to one of my various emails about taxes, buying apartments, and whatever other discussions I’ve had recently about the “green stuff”.
It’s a must-read for anyone who is interested in opening foreign bank accounts…
Here goes:
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Hey man – since it sounds like you have the cash, it might be worth your time and effort to look into opening a bank account in Singapore.
The reason why Ukrainian savings accounts offer 18% interest rates is because they have some pretty high inflation rates – officially at 6.5%, which means that the actual inflation rate is easily double that level. This also indicates that the banking system in Ukraine is unstable and public confidence in their banks is very, very low.
Singaporean savings accounts can be opened by foreigners with banks like OCBC, UOB, Citibank, and a few others, if you have SG$100,000 or more – about US$75,000 or so – on hand. The exact amount depends on the bank; Citibank is the most egregiously stupid with a SG$250,000 minimum limit, while OCBC Bank allows you to open up a savings account with only SG$50,000. The catch with OCBC is that you have to give them a cheque from a bank in Singapore itself as the initial deposit, and you have to go to Singapore to open the account in person.
But, if you’re looking to diversify your money away from unstable places like Ukraine, or stupidly bureaucratic places like the USA and the UK, then Singapore is a good place to go. You can shift your income to Singapore itself as well, since Singapore only taxes your income if you actually live in Singapore itself. If you live overseas, you can maintain a bank account in Singapore and withdraw money from it using an international debit card.
There are a couple of problems, though.
First, arranging something as simple as a wire transfer can be a huge pain in the ass, depending on which bank you’re using. They rely heavily on their mobile app technology, but if for some reason that technology doesn’t work, then you’re screwed. And second, the debit card service fees can be pretty irritating; it’s not like having an account with Schwab where your international ATM fees get reimbursed to you.
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So, here’s the thing.
Let’s say I put $1,000 into a bank here in Ukraine. If I want that interest, the good stuff at 15% or so, it has to be in the local currency (UAH) in this case.
So, inflation can get you, if for some reason places have to jack their prices up in order to keep up.
Which, they have done for several years now.
In 2016, a lunch at the best spot in town was 160 uah, now it’s 300. And yet, the exchange is still the same (24/25:1). So it’s basically $12 instead of $5.20.
Make sense?
Now, that’s a 3 year jump, so it’s drastic, but Didact isn’t wrong.
Honestly, it kills me to say this, but there just isn’t any good system out there for digital nomads, expats, and family men who have decided to build our lives abroad. There’s just not.
But, I did list everything I think is useful inside of a recent “Actually Abroad” post, which goes away come December 1st.
Here’s the link to get in before it’s gone in just a few days:
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