One of the bigger financial questions faced by expats and seasonal residents is whether to open a bank account abroad.
If you are purchasing property in Turkey, then it is required that you open a bank account in Turkey. However, even if you aren’t planning on purchasing property, many people find it more convenient to have an in-country bank account. Why?
– Compounded ATM Fees: Domestic Banks may charge large fees for withdrawing money abroad in addition to their regular ATM fees for withdrawing money at other banks’ ATMs and addition to standard fees from the ATM you are using – in short, you may be charged multiple fees for withdrawing money.
– Exchange Fees: Your bank may charge you a fee for withdrawing money in a different currency (lira instead of dollars, pounds or Euros).
– Over-sensitive Card Security: Many American banks require you to detail when and where you will be abroad. If your travel plans differ from what you informed your bank, or if you buy a sandwich while making a transfer at an airport not on the itinerary you gave the bank, you could find your card locked. Many banks also set a maximum time period for use abroad; at the end of each period you must re-inform your bank that you are abroad, or risk your card being locked due to “suspicious activity”. Having a local bank account greatly reduces this inconvenience.
– Potential Local Incompatibility: This is less of a problem for VISA card holders, but some bank cards may not be compatible with local systems. You may find that you are able to use your home bank card at some locations, but not at others – even within the same town.
– Security: If you are considered about banking security you may open an account with a local bank with only enough funds to cover daily expenses for your time in country. Even if your card is stolen or information compromised, the thieves or hackers will have no access to your home country banking information.
– Easy Automatic Payments on Bills: With a Turkish bank account, it is very easy to enroll in autopay for cellphone, utility and other bills.
– Easy Online Banking and Money Transfers: All Turkish banks offer fairly fuss-free online banking. Even when you are back home you can monitor your accounts, make payments, or transfer money with minimal hassle.
Who Is Eligible to Open an Account: Basically, anyone with a Tax Identification Number (how to get one here), a valid passport, and an address in Turkey they can use for receiving bank correspondence. If you are staying in Turkey short-term, you can also use a temporary address, like your hotel address. Some nationals may also be required to have a Residence Permit. Thus it may be difficult for short-term tourists to open an account unless they get a Tax Identification Number, but if you are a part-time resident, full-time retiree, frequent visitor, in-country employee, or are planning to own property in Turkey it should be no problem.
What You Will Need to Open an Account: On the day that you go to open your bank account you will need to bring with you a photocopy of your passport, your Tax Identification Number, a residence address in Turkey for deliveries of statements and other notifications, and your Residence Permit (if applicable). You can generally open an account with USD, GBP, EUR or YTL (Turkish Lira). If you think you already have a Tax Identification Number, you can check your number here: https://tckimlik.nvi.gov.tr/ or here.
If you want to open internet banking (which is highly recommended), you will also need to to register a mobile phone number for your account, as most banks send a one-off password via text every time you access your accounts online.
Withdrawing Money: Regardless of which currency you choose to open your account with, you can always withdraw Turkish Lira, and usually withdraw EUR and USD (depending on supply inside the ATM). If you need to withdraw other currencies, you may need to go to a main branch. Exchange rates are updated daily and never far from the official rate.
Choosing a Bank: First, if you have a preferred bank in your home country, check to see if they have partnerships with a bank in Turkey. If they do, it may be easier to open an in-country account, and transfer money between accounts. Some international banks, like Citibank, HSBC and ING, have branches in Turkey, though the branches may not be directly affiliated – check before you assume! Some international banks offer only commercial banking accounts in Turkey. Also, talk to your local bank branch to understand fees for using your bank card or exchanging and withdrawing money abroad.
If you choose a domestic (Turkish) bank, then your choice should be determined by how you want to use your account. Do you plan to transfer money from a home account as you need it, keep a lump sum in your Turkish account to use gradually, or put a portion of your savings in your Turkish account and live off the interest?
Factors you should check when choosing a bank:
- Savings rate
- Different savings plans
- ATM Charges
- Money transfer fees
- Reciprocity with home bank
- Ease of online banking
- Proximity of Branch with English-Speaking assistants
Some of Turkey’s biggest banks include YapiKredi, Garanti Bank, Ak Bank, Türkiye İş Bankası, Ziraat Bank, Vakıf Bank, TEB Bank, and Deniz Bank. A complete list of banks can be found here. Each bank has a different set of relationships with international banks, and different options open to foreigners interested in opening a bank account. For example, Garanti Bank has more English and German speaking staff; İş Bank owns a number of European branches. You may want to look at and compare each one before deciding which bank offers the best option for you.
Saving Money: Most banks will allow you to ope a savings account in Turkish Lira, Euros, GBP or Dollars. Due to the fluctuating rate of Turkish Lira, many people choose to save their money in Euros, Dollars or Sterling. Turkish banks generally offer greater returns on savings accounts than Western European and American banks. In the past, the interest rates were high enough that some expats kept a lump sum in savings and lived solely off the interest generated. Rates are currently around 8-10% (March 2015), though the actual rate quoted will of course depend on which currency you save your money in, the amount of money in your accounts, and how long you lock in your savings in a ‘fixed term deposit account’. You may be able to individually negotiate for a better rate. Most banks offer 1, 3, 6 month, and one year options with the one-year option obviously yielding a higher interest rate. You can pull your money out early, but will lose all or some of the accumulated interest.
Most types of accounts are taxed 15% on the interest earned; however, this normally already figured into your quoted interest rate, so you will not see this tax on your banks statements. For most nationals, because you are taxed on interest earned in Turkey, you will not be taxed on interest earned again in your home country.
Turkey has a Deposit Protection Scheme. Deposits covered include the YTL, Foreign currencies, accounts linked to precious metals such as silver and gold, and ‘participation funds’ (equity funds). The maximum payout is 100,000 YTL/Person. Thus, if you want to deposit more than 100,000 YTL in a savings account in Turkey, it may be best if you split your saving between accounts at different banks.
Transferring Money: Most banks do not charge for transfers between accounts within the same bank, but will charge (usually 1-10 lira at an ATM; more for larger sums) for transfers to accounts at other banks within Turkey. Again, check with each bank to make sure you understand their fees. Foreign transfers can usually be made using SWIFT or Western Union. A list of SWIFT codes can be found here. To understand how this works, read the page on Foreign Transfers at Ziraat Bank, and Foreign Currency Transfers at Garanti Bank. Keep in mind that your home bank may charge for transferring funds to a Turkish bank, unless they have a reciprocity agreement. You will also be charged a fee for using Western Union or MoneyGram.
Using Your Account: You can access any of the above-mentioned banks by visiting a local branch, calling the telephone banking center (all offer English telephone banking), using online banking, or going to a local ATM. Besides withdrawing money, most ATMs offer features like exchanging currencies and transferring money to same-bank accounts. You can use a bank card at most restaurants, hotels or shops in urban or tourist areas; however, many small shops and villages are cash-only. Most banks charge 2-6 lira for withdrawing money from another bank’s ATM; to avoid fees, you may want to withdraw money before you leave city centers where you will have more ATM choices.
What are the Banking Fees? Some banks charge annual fees on accounts unless you set up scheduled deposits. These fees generally range from 40-80 YTL per year. To understand the exact fee scheme, check with a bank before opening an account.