# US Bank suggestion



## chrisser (8 mo ago)

I'm in need of a second checking account. My primary is currently at a local bank that has a small footprint - just within our state. They're nice people, but I don't know if I would want to try to deal with them processing foreign transactions.

Since we plan on visiting MX soon, and also would like to relocate there in the future, it seems like it would make sense to establish a relationship with a bank now that will make the process easier when we're ready to travel and when we change our address. I'm not a veteran so USAA isn't an option.

I've seen some references on the forum to Bank of America having decent policies and Citibank having some good relationships with Mexican banks, but the threads tended to be a few years old and banking laws and policies seem to change frequently these days.

Anyone have any US bank recommendations for travelling/living in MX?


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## citlali (Mar 4, 2013)

As far as I am concerned most relations are irrelevant. I have a Schwab account and bank on line with them. They reimburse all the ATM charges and if you want to transfer money they give you an excellent rate of exchange. I change the dollars into pesos and have them send pesos to BBVA my Mexican bank. and it has worked well for the last 20 years.
I bank on line with both places.

Careful with the change of address and whether you want to keep a US address or not. Look into it carefully before doing anything.


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## eastwind (Jun 18, 2016)

Agree 100%. Set your banking up while you still have a US residential address, because after you don't you can't open US bank accounts as a US resident ('cause you aint). 

And I think Schwab is the best choice. Schwab gives you a brokerage account and a bank account. You don't have to use the brokerage account for much, but if you have an IRA or 401k or something you can move to an IRA at Schwab their benefits are even better. But even a small starter Schwab account gets fee-reimbursed ATM transactions in Mexico, from which you can pull pesos from your US account and get a good exchange rate (be sure to decline the rate offered by the ATM, that's not Schwab's rate).

Using Schwab to wire money to Mexico (in case you need to make a big purchase, like a car or house) is either cheap or fee-free, depending on how much you have in your account.

And their charge cards don't impose a foreign transaction fee if you use them to charge something in Mexico. 

You can even do without a Mexican bank account for a while if you have Schwab.

You want to have at least 2 US bank accounts with different companies for various reasons - cards get lost or skimmed, accounts get locked for silly reasons. So you always want more than one account. So I'd keep what you have, and add Schwab.


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## citlali (Mar 4, 2013)

One thing happened to me that is worth thinking about.. When my husband died Schwab blocked the joint account until I caould prove my husband had less than 60 000 dollars of transferable assets worldwide..So I wired on line money from my IRA to my Mexican bank .. Yes you need to be able to put your money in another bank sometimes. .


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## MangoTango (Feb 8, 2020)

There are some gotchas with Schwab - most have to do with if you are a US resident or not (regardless of citizenship). I think ALL US financial institutions will lock an account which is set up as Joint owners w/ rights of survivorship - if you are a non-resident. I got lucky and had time to change all such accounts to simply my name beforehand. (It bothered my wife, and she commented, that in a sense they were forcing us to unravel a lifetime of things we had built together - that was a bad moment). Nobody tells you this. You have to ask. I spoke to everyone beforehand. Another difference with Schwab is - a non-resident cannot specify a beneficiary on a non-retirement brokerage account. IRAs and 401ks are ok. I'll mention that Fidelity does not have the same restriction.

For redundancy I will keep my Schwab account. This is now June and I think I have used my Schwab debit card once this year to see if it still worked - so for me the ATM feature ain't worth much. I did also wire some pesos to Mexico to keep my wire instructions alive with Schwab. (They throw them away if not used - without asking). Ya know - the exchange rate wasn't as good as I remember either.


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## citlali (Mar 4, 2013)

I only wire large sums for weekly money I just get the money from the ATMs since the charges are reimbursed. I used the card a lot but since the account is restricted I just wire money from my IRA s and had SS deposited in my Mexican bank account.


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## MangoTango (Feb 8, 2020)

Someone advised you to be pulling money from your IRA ? These make up your RMD (required distributions) ? Note - I am no expert....


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## eastwind (Jun 18, 2016)

Just a note: if your husband had an IRA in his name, and you as his spouse inherit it, you are entitled to roll over the entire amount into an IRA in your name, which then you can take required distributions on based on your age.

That is at least true for a pair of US citizens. In your case, it _might _also be true. 

The other option, to distribute all the money from the IRA to you in the calendar year, _generally _results in higher taxes owed on it (because it puts you in a higher bracket). 

But depending on how much there is, that might not be a big difference, and I think you were saying before that you just want to be "done with the US", in spite of costs. So then taking the whole thing out in one year, paying the taxes, and being done might mean not having to file taxes forms in the future, which might be of more convenience value to you than reducing the taxes.

Up to you.


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## MangoTango (Feb 8, 2020)

eastwind said:


> Just a note: if your husband had an IRA in his name, and you as his spouse inherit it, you are entitled to roll over the entire amount into an IRA in your name, which then you can take required distributions on based on your age.
> 
> That is at least true for a pair of US citizens. In your case, it _might _also be true.
> 
> ...


And I believe being the beneficiary on the account allows the surviving spouse to rollover the retirement accounts into their own - (inherit it as you put it). It was very quick and simple. For annuities - the accounts remained distinct but the monthly deposits are co-mingled into my brokerage account. 

I vaguely remember Citali mentioning some exhorbitant tax rate on those IRA withdrawals (30 % withheld at time of withdrawal) ?? Maybe I am mistaken.


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## eastwind (Jun 18, 2016)

Yes, she did, because of her citizenship status the IRS requires to be the taxes withheld upon withdrawal rather than paid later when filing. (They're afraid of getting stiffed). But I think in the end the tax rate and taxes paid will be the same, the withheld taxes are credited vs the taxes owed once everything is figured and filed. 

If she takes a lot in one year her marginal rate could end up being more than 30%, if it's enough taken out to put her in a high income tax bracket.


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## citlali (Mar 4, 2013)

The tax rate in the end is the same but the witholding means that you can take out less by bracket or you hit the next bracket.


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