Cash while cruising?

[BobOwen]

Forgive me if this is old hat - I can't find anything with the search.

Our liveaboard epic starts next May in the Med. All those jobs that need sorting before we go are now looming fast!

We are checking out various financial options regarding interest on our savings but there is one matter nagging me like a toothache - how do liveaboards arrange withdrawing their money?. The only easy way we can come up with, is to use cash machines. Other than opening accounts around the Med, is there any way to avoid the charges for the use of cash machines? Or is that the way - how easy is the Greek banking system for example, to arrange an account and card?

Our budget will be limited, though we are confident we can enjoy ourselves, but paying 2.5% for each withdrawal is significant. What do all you regulars do?
And while I've momentarily got your attention, can anyone recommend a decent off shore return for savings?

TIA

Bob

<hr width=100% size=1>Beer - its not just for Breakfast you know.

 

[Ric]

I have withdrawn Euros in Spain, Italy, Austria and Germany from my French Euro bank account, and have never been charged. You might like to open an account in France, then transfer sterling to it at appropriate moments when the exchange rate is favourable.

<hr width=100% size=1>

 

[pandroid]

There's been some discussion on this on other threads. Its generally reckoned that the Nationwide Flex account is the cheapest UK Current account to withdraw cash abroad, as they dont charge transaction fees, and the spread rate is as good as the major banks. We compared it one year favourably to a Natwest account which can charge you up to £5 a withdrawl.

<hr width=100% size=1>

 

[charles_reed]

Yes I\'ve found it quite

a problem.

Using any Visa network card, including debit cards, involves you paying twice, once in the bid/offer spread and once in a direct charge. Compared to interbank rate this is an impost of about 5-8%.

I opened an account with Credit Agricole whilst I was in France and that was the most effective way of converting £/€, they used to convert at median interbank rate and charge 1/2% plus a fixed fee. This amounted to about €29 on £1800 (€2700) or 1.06%.
There is a snag, despite all the countries in the €area sharing a currency the banks are still making a charge for cheques transferred or cash withdrawn in another country.

However if you open a Nationwide Flex account, they bear the Visa handling charge and the only thing you lose out on is the Visa bid/offer spread which varies (I've even got a better than interbank rate on a couple of occasions) which costs you about 2.5%.

PS If you do want to open an account in any European country you'll need to get a letter of introduction from your UK bank - otherwise, due to money-laundering requirements you'll find it impossible.

<hr width=100% size=1>

 

[charles_reed]

I suggest

you look closely at your statements again - you'll find the charges, paid to the bank whose ATMS you have used are far later and separate from the actual withdrawal, some occur more than a month later.

<hr width=100% size=1>

 

[scarlett]

beware

Not all banking abroad is free.

I have a Greek Alpha Bank account. I was warned that if I left any money in it they would take the charges but if it was empty they would not.

You could open an Alpha Bank account with just a passport in 2001.

<hr width=100% size=1>

 

[Metabarca]

Certainly in Italy you need residence to open a bank account, and annual charges are high.
Concerning offshore accounts, there are a couple in the Isle of Man offering 4.5 - 5 % gross, according to sum deposited with instant to 30-day access. I think Anglo-Irish, Bradford & Bingley an Leicester something or other.

<hr width=100% size=1>Adriatic links here: <A target="_blank" HREF=http://www.comoy.com/saillinks.html>http://www.comoy.com/saillinks.html</A>

 

[Sea Devil]

After 10 or 12 years of travel and trying lots of ways the best soulution I found was to carry 2 credit cards - One Visa and one Mastercard - both automatically pay off the full amount monthly - (Mastercard is the Sailing Card the other via my bank RBS)

They charge less than my direct debit bank card and I have never found any country anywhere that does not accept the cards for cash. By far the cheapest way to go unless someone knows better. I also have internet banking on all my accounts (also RBS) so from any internet cafe I can move funds around for free... And pay some bills - Use the CCs for everything - paying in supermarkets, fuel, marina fees etc - then the charges stay even lower!

I now have a Euro account connected to my current account - monthly I transfer funds to the euro account FOC and then issue a cheque on my euro account and that is encashed by my french Bank - costs around £10 a go and takes a week - charge by french bank - so has to be used for largish accounts - the problem with this system is that each receiving bank has its own sytem for charges - can be a great deal higher and time up to 6 weeks - if you are on the move cc are the way to go..

<hr width=100% size=1>If you have time please visit my web site -
<A target="_blank" HREF=http://www.michaelbriant.com/sailing>http://www.michaelbriant.com/sailing</A>

 

[snowleopard]

Nationwide a/c

we went that way and it served us well throughout europe & the caribbean with the exception of some french banks.

the trick is to get one of their internet-only accounts and keep the bulk of the funds there. you get a better rate of interest and can top up the flexaccount using internet cafes.

<hr width=100% size=1>

 

[BobOwen]

Some good feedback here - thanks for all your replies.

It would appear then, for ease and practical use, that CC's are the way to go. As Bambola suggested, actually paying with the card and not cash itself will reduce the amount of actual cash needed to be withdrawn and costs. (Obvious but I didn't think of it!).

Using internet access for our accounts is a definite. I can't see any other practical way of managing our money while cruising.

I have briefly checked out some offshore accounts which don't seem to pay as much as some on shore accounts when tax is not paid. I know the subject of tax and expat status has been touched on recently but does anyone know if you can arrange non res status with a society / bank to avoid paying the tax at source? A friend in the pub last night (I know...I know) was pretty sure there was a form available to arrange such matters. Or do you have to go through the rigmarole of applying for a refund every year?

Bambola, you mentioned you had the tax man accept you were not a resident of any country while aboard your boat. Did that involve any sort of official recognition that could be presented to a society, and thereby avoid tax at source? Or did you have to claim the tax paid on savings at source and then claim it back?

Thanks again for all your help here folks.

<hr width=100% size=1>Beer - its not just for Breakfast you know.

 

[wagenaar]

I am a dutchman, who lives already more than ten years in Spain. I get my pension paid in a dutch account, ABNAMRO, and use internet, foc, to transfer money to my bank account in Spain. I do not pay charges when I get money from a cash-machine or when I use my debit-card to pay in shops, restaurants etc. Of course I have to pay a quarterly fee. I think I would have to pay a fee, when I use the card outside the Eurozone, but don't know how much.
Henk.

<hr width=100% size=1>

 

[Sea Devil]

The non resident status my accountant fixed for me but If you go into a tax office and chat to them they will almost certainly help or tell you who to phone - there is a special office I think in Plymouth ... The tax people are very helpful.

You do need to have established your non resident status before the banks and savings people will give you the interest gross. When you ask for a non resident status on your account you get two forms - one is for the inland revenue and one for the bank both declaring you are non resident - So you need to have established that with the IR before...

Another thing to watch is that once you are Non Resicent then it is very difficult to get a NEW uk bank account or cc.. The old ones will carry on but getting a new one is difficult -

I would think carefully about wether the financial gain is worth the hassel... Also I am not an accountant and therefore...... Talk to the tax people - My wife and I have found them really helpful - what you are doing is not illeagal or unusual but you do need to get to the right office.....

<hr width=100% size=1>If you have time please visit my web site -
<A target="_blank" HREF=http://www.michaelbriant.com/sailing>http://www.michaelbriant.com/sailing</A>

 

[Sea Devil]

You are lucky Henk - your country is in the euro! We brits have to pay a hefty price to change our £s to € -

<hr width=100% size=1>If you have time please visit my web site -
<A target="_blank" HREF=http://www.michaelbriant.com/sailing>http://www.michaelbriant.com/sailing</A>

 

[snowleopard]

i believe it is sufficient to go into your bank or building society and sign a declaration to say you are entitled to have your interest paid without tax deducted. we certaily were able to do that for our kids' accounts in the past.

<hr width=100% size=1>

 

[charles_reed]

Unfortunately

you'll find a very large number of european outlets either don't accept credit cards (Italy) or "the machine is broke" (France & Spain).

So you have to have access to cash and drawing cash on credit cards is a very expensive way to get it.

By the by Egg provide the best internet deposit account rates and it's easy to top-up Nationwide Flex from that.

<hr width=100% size=1>

 

[snowleopard]

Re: Unfortunately

couple of points to clarify...

you must use a Debit card. a credit card will, as charles says, cost an arm and a leg.

charles- i stopped using my egg account because they suddenly made it incredibly difficult to transfer money to another account (you had to set up an annual standing order, let one payment go through then cancel it!!!) - do i take it they have got their act sorted now (this was 3 or 4 years back)

<hr width=100% size=1>

 

[Sea Devil]

Re: Unfortunately

<you'll find a very large number of european outlets either don't accept credit cards (Italy) or "the machine is broke" (France & Spain).>

Not sure I agree with the above -
My experience - (5 years in the Med- amost every country except Libya and 10 years outside european waters was that the creit card worked in the wall machines everywhere - Of course there are the odd machines that are broken and some only accept their own customers but thats true where ever you are. They vary slightly in their rates but the exchange rate use is the bank rate on the day of withdrawing cash +around 2.5% - of course better if u just use the card to pay for everything and keep cash to a minimum.

My debit card cost slightly more - but only slightly - Unless the rules have changed recently there was no extra charge for cash IN A FOREIGN COUNTRY on a credit card.



<hr width=100% size=1>If you have time please visit my web site -
<A target="_blank" HREF=http://www.michaelbriant.com/sailing>http://www.michaelbriant.com/sailing</A>

 

[Ric]

Re: I suggest

I'm with Soc Gen in Mandelieu - I never get charged anything for withdrawing euros in cash dispensers in Italy, Spain, Austria, Germany. Not yet tried outside those four.

<hr width=100% size=1>

 

[chockswahay]

First Direct Bank have a service called 'First Directory' Amongst other things it gives fee free cash withdrawals worldwide.

Cost £9.50 a month though.................just a thought.

Chox

<hr width=100% size=1>

 

[charles_reed]

To clarify

My reference was to making purchases on the credit card - in both those countries there is an aversion to paying credit card imposts by small businesses. Additionally due to the relatively higher proportion of "grey" economy to the UK you are, by using credit cards, cutting yourself off from the very real opportunities (with TVA at 20%) of cash discounts, apart from the hidden 2.5% levied by Visa or Mastercard in the bid/offer spread.
If you draw cash on a credit card you are paying about another 8-5% in up-front charges, made up of the cash-fee plus the interest.

From the point of view of convenience and the working of the ATMS supplying cash on a credit card I would agree that all the banks make it as simple and as efficient as they can. But wouldn't you if you were they - such lovely gullible customers for all of us to rip off.

In fact my research is that debit cards, if they're part of one of the credit-card networks (Mastercard/Maestro, Delta/Visa) have the effrontery to charge a fee to withdraw your own money OUTSIDE THE COUNTRY OF ISSUE. Nevertheless they are marginally cheaper than using a credit card, because you save the interest fee.

These rules have been in force for at least the last 6 years.

I suggest you check against median interbank rate on the day of the transaction all your credit card conversion rates. You will find that they tend to be smoothed, so when the € is rising against the £ you can, very occasionally, be in profit, however the card issuers make sure they benefit - over the last 103 transactions on my accounts with Mastercard and Visa, the rates favoured the networks, a weighted mean of 2.4% for mastercard and 2.5% for Visa.

PS My travels cover France, Italy, Portugal, Spain, Italy, the Netherlands, Germany and the Czech Republic - in all the situation is broadly similar, I cannot vouch for Morocco, Tunisia, Algeria or any of the other Maghreb countries but my experience with the Egyptian banking system leads me to believe that they could well prove more costly and certainly slower and more inefficient.

<hr width=100% size=1>