January 2021

By IL‘s Ecuador Insider, Donna Stiteler, and Guest Contributor, Jim Santos

The Many Ways to Celebrate the New Year in Ecuador

By Donna Stiteler

Would you think I was crazy if on New Year’s Eve I joined a group of revelers carrying an effigy…and I later burned that effigy to a crisp, while wearing red underwear, and walking in circles around the fire with my suitcase, eating a bunch of grapes?

New Year’s in Ecuador is what I call the “Superbowl of Celebrations.” By participating in some of the off-the-wall traditions, I’m just blending in among the thousands taking part.

I lived next to Disney World for a decade, so I’m used to elaborate fireworks, electric light parades, and Christmas carols sung by princesses… But the New Year’s celebrations in Ecuador beat even this.

Here are some of the fun and significant traditions you’ll see in Cuenca…

Widows of the Old Year

Viudas de Año Viejo, or Widows of the Old Year, take to the streets in droves on the days leading up to the New Year’s grand finale. These “widows” are men in drag, who jump on the city buses and trams in brightly colored bouffant wigs, tight miniskirts, fishnet stockings, and wobbly high heels. They ask for donations, playing up that they are lonely widows in need… After a few pilsners, their show for sympathy is wildly entertaining.

Yellow Underwear, Red Underwear

Walk around downtown before New Year’s and you’ll find that the tiendas in many outdoor markets overflow with yellow or red underwear, ranging from sexy bras to men’s briefs. Ecuadorians wear the underwear to signify what they want in the coming year: Yellow for good luck, prosperity, and productivity, and red if they’re seeking love and passion.

Lighting Candles

I’m a fanatic candle lighter… I love to light candles in the Cathedral of the Immaculate Conception, which sits on the corner of the elaborate, Parisian-designed Parque Calderón Town Square in El Centro.

On New Year’s Eve, the entire town lights candles, which can be seen flickering in windows. I stock up on all colors and light them in the Cathedral, as well as on my porch overlooking downtown.

I light the traditional white candle signifying purity. And I buy more candles from a blind man who sells all types at the entrance to the Cathedral: blue for peace, red for passion, yellow for abundance, and orange for intelligence. I take no chances, which is why I light all the colors.

Burning monigotes (effigies) is a New Year’s tradition in Ecuador. © iStockPhoto.com/MindStorm-inc

Making or Buying a Monigote

About a week before New Year’s Eve, thousands of monigotes (effigies) are sold on the streets across town, ranging from three-foot-tall straw-stuffed dolls to towering depictions of superheroes and cartoon characters. You’ll also find thousands of papier-mâché masks to put on the head of your effigy—depictions of local, national, and international politicians; depiction of witches and devils; and of course the all-time favorites: the bad boss and overbearing mother-in-law.

Burning Your Monigote

You can burn your personally selected effigy at any time during the day or night on New Year’s Eve. Daytime burnings tend to take place outside offices and workplaces. Nighttime burnings are most common just before midnight. On neighborhood street corners, you’ll see piles of effigies burning.

This is where resolutions come in… Folks write their commitments to stop smoking, drinking, or overeating and stuff them inside the effigy before burning it. You can also write lists of bad events and toxic people, poor decisions, or the names of people who treated you badly, and place them in the “pockets” of the effigies. It’s promised that you’ll start the New Year with a clean slate.

Once the monigote is burning bright and strong, folks jump through the flames and over the ashes, a spiritual cleansing with flame and smoke that harks back to ancient Andean culture.

This year, there were a lot of people burning COVID-19 information to rid Ecuador of the virus…

12 Grapes at Midnight

You must eat grapes. The traditional 12 grapes represent the 12 tribes of Israel and the 12 apostles. But today, Ecuadorians associate them with wishes. As each grape is eaten, each person repeats, “Voy a ser feliz,” or “I will be happy.”

Fireworks

At midnight in most big cities, you will be treated to pyrotechnics lasting about 30 minutes, with thousands gathering to watch.

I watch Cuenca’s fireworks from my second-floor balcony. I literally have a front-row seat to the spectacle—although my dogs tend to run for cover. It’s such an uplifting experience—like the entire town is celebrating in one communal salute to incoming good fortune.

Suitcases for Travel

I love to travel, so I gather up photos and articles on places I want to go, tuck them into an old carry-on suitcase, and head to the street corner, where there’s usually a small fire raging.

I take a few laps around the burning effigies with my suitcase. It may sound silly, but this sends a spiritual message about places I want to travel to—in hopes my wishes come true.

This year I put in photos of the U.S., so I could finally see my sisters, and articles on Italy, where I intend to go with a friend in June.

Silver Coins

It’s customary to hold silver coins at midnight, to bring fortune. Hiding money around the house is also said to bring prosperity. This is mostly done late at night after hours of partying, and it’s considered good luck if you actually ever find your hidden fortune… Ecuadorians consider it like getting free money!

When I’m not in Ecuador for New Year’s, and instead with my family in Florida, I still pack a few effigies, which my sister Laura and I burn in her barbecue pit, dancing around as we watch the past burn away… And then of course we eat our 12 grapes and drag our suitcases in a circle around the flame.

We love the traditions. When we are in Ecuador, we’re normal. But in Florida, her neighbors think we’re crazy.

Your Quick Guide to Banking in Ecuador

By Jim Santos

When you move to a new country, there is no shortage of confusing procedures and choices. In Ecuador, banking is certainly no exception to that rule. You are presented with a selection of several banks as well as a confusing assortment of cooperativas. You may find unusual criteria for opening accounts, and a variety of rules not generally encountered in North America. Add to this that official documents will all be in Spanish, and it is easy to see why new expats may feel a bit lost when it comes to banking.

I’ll try to answer your questions as best I can from my experience…

Do I Need an Ecuadorian Bank Account?

An important first question: Do you actually need to have an Ecuadorian bank account? Since much of the Ecuadorian economy is cash-based, depending on where you live and your needs, the answer may very well be “no!”

I know several expats who just access ATMs to withdraw cash from their U.S. bank accounts as needed, using debit or credit cards. They pay cash for most day-to-day purchases, and use U.S. credit cards for larger purchases. This works best in small villages, especially in the Andes, where living expenses can be quite low. For example, in the village of Cotacachi, your monthly rent may be only a few hundred dollars, and gas and electric less than $50 per month. Utilities can be paid at local offices or banks in cash without the need for an account.

If you are contemplating this “cash only” approach, be sure and check with your North American bank to make sure you are aware of any fees associated with out-of-country withdrawals. Likewise, check with the local banks in Ecuador so you’re aware of any local charges.

A drawback with this approach is that ATMs have a daily withdrawal limit of $500. So, say your expenses are $1,500 a month or more… You’ll have to make at least three trips to the automatic teller every month. It is also not unusual for ATMs to run dry, especially during a holiday period.

One example of when a bank is absolutely necessary: If you are planning on acquiring an investment visa. This is an arrangement where your residency is based on maintaining a certain amount of cash or another type of monetary note in Ecuador. In that case, I would strongly recommend making all of the arrangements through an Ecuadorian attorney who is up on the latest laws and requirements. Two experts that have been helpful to other expats are Sebastian Cordero, email: [email protected] and Camila Moreno, email: [email protected]. Ask other expats in your area to get recommendations as well.

The Benefits of a Local Account

There are several reasons for maintaining a local bank account in Ecuador.

First of all, there is the convenience of having a local debit card. You can use North American credit cards in most large stores or malls, but when you pay you’ll often also be required to show your passport. With a local debit card, you may get asked to show your cedula (national ID card), but that is rare.

Interesting side note: It is easier to buy $150 worth of groceries at the neighborhood SuperMaxi with a local debit card than with cash. Twenty-dollar bills are inspected carefully one by one, and anything larger may require a manager. A $100 bill may have to be photocopied, or at least will have its serial number recorded along with your signature and phone number!

All of the major banks and most of the cooperativas have modern and convenient websites, where you can pay utility bills online, set up automatic payments, and transfer funds to others who hold accounts at your bank or other Ecuadorian banks.

The largest banks in Ecuador include Banco Pichincha, Banco de Guayaquil, Produbanco, Banco del Pacifico, Banco Bolivariano, and Banco del Austro. Each has pros and cons, but unless you have particular needs, go with whichever is most convenient. For example, Produbanco has branches in all SuperMaxi grocery stores, which you may find attractive.

We chose Banco Pichincha as our main bank, mostly because it was only two blocks away from our condo. When we signed up, they didn’t charge a fee for ATM withdrawals from foreign banks, which was a plus.

Expats looking for a high rate of return sometimes choose to open accounts in a cooperativa. These are private banks similar to savings and loans in the U.S. There are hundreds of them. In general, they offer higher interest rates because they make their money providing loans to small businesses and individuals. Hence, they encourage investing to keep their capital up.

You should be careful when looking into cooperativas, since many do not offer any kind of insurance for your deposits. You don’t get something for nothing: A higher rate of return almost always involves more risk.

What Kind of Account Should I Have?

In the U.S., we take it for granted that you want to have a checking account for your main use, and maybe a savings account on the side.

However, in Ecuador it can be very difficult to use checks. Many businesses will not accept them at all, and the ones that do are very particular about the process. Be prepared to show a couple of types of ID, and woe unto you if your signature varies in the slightest between ID and check. They allow no typos or misspellings, there is no crossing out or over-writing of any poorly written characters, and I have even seen checks rejected because the date was not in the proper day-month-year format.

It is much easier to use a savings account. Debit cards are accepted more often than checks. It’s also a lot simpler to use a debit card to get cash from an ATM than to try and find someone who will cash a check written out for “cash.”

Signing Up for an Account

So, you’ve picked your bank, you know what kind of account you want… All you have to do is sign up, right?

Wrong.

It’s not so simple to open an account in Ecuador. Procedures vary depending on the bank, but in general you are going to need:

  • Two or more color copies of your cedula (front and back)
  • Two or more color copies of your passport’s photo page
  • Two or more copies of the visa page of your passport
  • Proof of address (a utility bill or lease/deed)
  • At least one written letter of endorsement from an Ecuadorian citizen

That last one really surprises new expats—but most banks want at least one letter that states that you are an honorable person and will be a good customer. Some may require two letters, and they may also need to be from current customers of that bank.

Do not be surprised if you have to sign four or more signature cards as well. In fact, each signature will be scrutinized, maybe by more than one employee. If they decide they are not all identical, you will be asked to keep signing until they have enough similar samples. You would not believe how difficult it is to sign your name normally and consistently with that much pressure!

Lastly, don’t count on walking out the same day with everything arranged. It may take a few days to a week to get your ATM card, and a similar delay to access online banking.

Keep in mind this is general advice and some banks may be more or less strict. Cooperativas tend to be less stringent, some waiving the letter of recommendation, for example. However, some may have unusual restrictions as well. For instance, a cooperativa we sampled did not allow joint accounts.

Banking is one of those situations where if you are not fluent in Spanish, it is well worth it to hire an interpreter to go along with you, to make sure you understand everything that is going on (and the bank understands you); that you understand all the rules. We have never had to pay more than $10 an hour for help from a bilingual Ecuadorian, and it has always been money well spent.

Learn the Rules

Always do your due diligence, and make sure you understand all of the rules and regulations your particular bank has. Some examples:

  • Some banks may only allow you to deposit a personal check if it is below a certain amount. Our bank set a limit of $1,000 per day
  • Money from deposited checks may not show up in your account for seven to 10 business days, especially if they’re foreign checks
  • There may be fees for utility bill payments or fund transfers
  • Check the limit on ATM withdrawals
  • Check the limit on debit card purchases

Are My Funds Safe?

Expats are often excited about the interest rates on savings accounts and Certificates of Deposit in Ecuador. After all, our plain-vanilla savings account earns 2%, compared to 0.02% on some U.S. accounts. It is possible to get 10%, 12%, or an even higher return on some Ecuadorian accounts.

Let me be the first to say that I am NOT an expert, or even a hobbyist, when it comes to financial matters. I certainly am not qualified to give investment advice, or to do a balanced risk assessment. But before you get too enthusiastic, consider carefully the following…

First of all, checking, savings, CDs, and some other bank investments are insured by the Ecuadorian government up to $32,000 per depositor if the bank is declared in forced liquidation. If you have multiple accounts in the same bank, this is the maximum total paid by the government. The law does not specify what would happen if you have accounts in several different banks, and two or more are forced to liquidate at the same time. In theory, this is not very likely to happen.

In theory.

Keep in mind this is a foreign country, where you do not have a lot of clout as an expat resident. In theory, accounts were insured in March of 2000 when the currency shifted from the sucre to the U.S. dollar, but that didn’t stop people from losing millions. In the event of an actual collapse of multiple banks, or a sudden shift to using the Chinese yuan as national currency—would the government be able to pay off everyone? Would paying off expats be a priority? Hard to say.

The other factor to think about before committing large sums to an account is that there is currently an exit tax of 5% on funds leaving Ecuador. There has been talk of reducing or eliminating this for several years now, but it remains just talk. As Ecuador and the world slowly recover from the economic stresses created by the COVID-19 pandemic, I would have to think it is unlikely to change anytime soon. One exception to this rule: If you’ve held an investment visa for at least two years, you can transfer your original deposit amount out of the country without the tax. You would only pay the exit tax on interest earned.

In summary, like many things in the new expat’s life, banking is something that should be entered into after careful study and consideration. Take your time and make sure you understand all of the rules, regulations, and fees before you sign on the dotted line.

Now that’s advice you can take to the bank!