bank account

[ROBERT CRENSHAW]

Do you have to be in country to set up a bank account ?

[IL’s Insider Expert]

Hi Robert – thanks for your question!

In short, yes, you have to be in Ecuador to set up a bank account there. You will have to visit a local branch and provide proof of your (Ecuadorian) address.

However, bear in mind that many expats live in Ecuador without opening a local bank account. They simply withdraw money from their U.S. bank account using ATMs in Ecuador. Since Ecuador uses the U.S. dollar, this process is made easier.

Opening an Ecuadorian bank account is relatively simple if you are an Ecuadorian resident. Since the country is typically not a source of (or a destination for) laundered funds, the banking controls are not as strict as in other Latin American countries. On the other hand, Ecuador is not an international banking center, and all banks are Ecuadorian owned and operated. Most banks require that you have a resident’s visa to open a checking account, but most will open a savings account for non-residents. (If you do open a savings account here, you can get up to 8% interest.)

In addition to providing proof of residence status with your cédula (resident’s ID card), you’ll need a copy of a utility bill showing your address and your passport to open a checking account. Depending on the bank, you may also be asked to provide references. The process usually takes less than an hour. An attorney, local resident, or real estate agent can assist you in opening an account and make sure you understand the rules and requirements, although larger institutions almost always have bilingual employees.

There are a number of good banks in Ecuador with convenient hours and many with internet banking services. Be aware that bank deposits are insured for only $32,000. Banco del Pichincha is first rate, as are Banco Guayaquil, Banco del Pacífico, and Banco Bolivariano.

Nonetheless, we suggest that you keep only a year’s worth of living expenses in the bank at any given time. And remember, under FBAR (Foreign Bank Account Reporting), the U.S. requires you to report amounts of $10,000 or more held in foreign banks (whether the $10,000 is all in one bank or you have smaller amounts in several banks that add up to that number).

By the way, Bancos Guayaquil and del Pacífico have arrangements with the U.S. government to accept direct deposits of U.S. Social Security transfers.

Hope that helps!

[Robert Crenshaw]

Thanks for the info. I have some property on the coast and I was thinking of selling it and moving it to a savings account in Ecuador. My plan is to have available cash to buy another property if I see something that attracts me. I guess I’d still have to come to Ecuador to do this ? Thanks, Robert

[IL’s Insider Expert]

Hi Robert – The best thing might be to speak to an in-country attorney about your particular situation; they might have some recommendations about the best way to approach it. We have a list of some attorneys and other resources in our Rolodex: https://members.internationalliving.com/country_clubs/ecuador/rolodex/

• This reply was modified 4 years, 4 months ago by IL's Insider Expert.

[Douglas Bennett]

Since I can not read Spanish, I need list of cooperativas that are insured by COSEDE and how much interest that they pay. Can you have money transferred between a bank and a cooperativas electronically and, also, between cooperativas to cooperativas? I plan to transfer money from my brokerage account to Ecuador and live of the interest plus my social security.

[IL’s Insider Expert]

Hi Douglas – thanks for your question!

We reached out to Jim Santos to get an answer for you – he’s written many articles for International Living magazine and Ecuador Insider. Jim says…

“The banking situation in Ecuador is reasonably stable, but it is a complex field that requires the input of professionals – especially during the current COVID-19 crisis. Any list that I might draw up would be incomplete at best, and possibly out of date by the time you read it. In general, there are government supported banks, at least one independent bank, and then many cooperativas. The banks are all insured up to a certain amount.

“Cooperativas however are private banks, much like savings and loans in the US. There are some cooperativas that are insured, but not all. Generally speaking, the cooperativas offer higher interest rates, and make their money making small personal and business loans. As all over the world, you can assume that the higher the interest rate paid, the greater the risk to the investor.

“I have personal experience transferring funds by wire into and out of Ecuador. I have never had a problem, and fees will vary – both in the US and in Ecuador. For transferring within the country, most banks and cooperativas have web sites where you can transfer to other Ecuador banks. I had two accounts, one in Banco Pichincha for general use (paying bills online, debit purchase) and a savings account at a cooperative JEP.

“BTW, our Pichincha account was savings also. You will find that writing checks can be a bit of a hassle. They are very particular about signatures matching, and there can be no scratch-throughs, overwrite corrections, or misspellings. Many businesses will not take checks. When it comes to making deposits, some banks have limits on the amount of the check that can be deposited at a time – and there is usually a 7-10 day wait until it is available.

“One important thing to remember about moving money into Ecuador is the cost of getting it out again. Although there is talk of changing it, currently there is a 5% exit tax on any funds transferred out of Ecuador. This even includes ATM withdrawals and debit purchases. For example, I purchased goods in the Panama airport once with my Banco Pichincha debit card, and found the bank charged the 5% exit tax on a purchase of less than $30.

“Many expats have found the advice and assistance of professionals to be well worth it. Two you may consider are Sebastian Cordero ( scordero@rcpabogados.com ) and
Camila Moreno ( cmoreno@morenodidonato.com ). Both are Ecuadorian attorneys who deal in immigration and banking issues. Both are fluent in English and very easy to work with.”

Jim Santos
http://jimsantosblog.com

• This reply was modified 3 years, 9 months ago by IL's Insider Expert.

[IL’s Insider Expert]

Hi Douglas – here’s some more information from coastal expat John Williams – you can read John’s article about living off his savings interest in Ecuador here: https://members.internationalliving.com/i-live-off-my-savings-interest-in-santa-marianita/

John says:

1. Most of the bigger Co-ops are covered by the COSEDE government insurance up to $32,000 including JEP, Progresso, FINCA Bank. At the government link, you can enter the name of a bank or coop and it will tell you if they are covered: https://www.cosede.gob.ec/conoce-tu-monto-de-cobertura/ (NOTE: You may only be able to access this link from inside Ecuador.) Coverage is similar to the FDIC in that it is a government guarantee of an insurance plan that the financial institutions pay into.

2. Actual banks pay interest in the 5.0 – 6.0% range on one year CD’s. Co-ops are similar to Credit Unions in the USA and pay 8.0 – 9.5% interest on one year CD’s, and you can have the interest paid monthly into a savings account where you can access it.

3. Co-ops typically have their open bank accounts at banks. To transfer into a Co-op you need to set up an account and then get their BANK account information from them. The transfer is then from your bank to the Ecuadorian Bank where the Co-op has their account and “for credit to” the bank account of the Co-op, and for further credit to your account at the Co-op. Transfers from an Ecuador Bank to a Co-op are pretty simple and routine. Intra-Ecuador transfers are relatively easy, but Ecuador is a little behind in electronic banking and usually requires you to go to your financial institution to make a transfer instead of being able to do it online.

• This reply was modified 3 years, 8 months ago by IL's Insider Expert.

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