OPENING AN INTERNATIONAL BANK ACCOUNT AS A SOUTH AFRICAN


Investing & Money
piece written on the 10th April 2014 by  

Update 01/01/2016: My account has now been open for several months, I’ve made payments, received payments and enjoyed a huge platform update from Lloyds, about a month ago, which has made the online banking experience far better.

For those of you who follow me on Facebook or Twitter, you’ll know that I’ve been in the process of opening up an International bank account. The good news is that the account is now open and I’m able to transact with it. The process was a great deal easier than I expected (granted, I did do a lot of research), but because a few of you have asked me about it, I have decided to blog about my experience.

After a good amount of research I decided to go with Lloyds International. Their entrance requirements were decent, their service has been a pleasure and the offering as a whole suited me well.

lloyds_bank_logo

 

Below are the steps that I took to create the account:


To save you some time, because it’s quite tricky to find the actual account type, you can simply click through to their Premier International Account. This is a transactional current account and makes the most sense if you’re wanting to transfer money to and from the account, be it from South Africa to Lloyds and back, or from here to Lloyds and then into an investment vehicle. I think the most important things to note are:

  1. You need to earn £50,000 a year OR you need to make an initial deposit of £25,000 within the first 30 days (the website says 90 days, but their staff explained over the phone that it was 30 days, so I’m not certain) of opening the account.
  2. Provided your balance remains higher than £2,500 you won’t be charged bank fees.
  3. The account caters for Sterling, Dollars and Euros.
  4. You get a free debit card when creating an account that can be used anywhere in the world.

I wanted to move money to the UK for personal reasons and therefore I went the option of transferring the £25,000.

Keep this in mind, because £25,000 equates to R436,000 R575,000 on 01/01/2016) which is a huge amount as a deposit. If you’re a business owner, it might make sense to bump up your salary for several months to avoid the initial deposit. Nevertheless, I went the deposit route.

Once I had applied for an account online, I received a call from an international wealth advisor (Anna) who was an absolute pleasure to deal with. Expect to be asked quite a few questions about why you want an account, what you plan on doing with the account, is it for short term or long term usage, what you do for a living and so forth – I think that if you’re opening up an account you’ll be able to answer these questions quite easily.

Following this, you’ll be asked to supply three things:

  • A certified copy of your passport, driving license or National Identity Card scanned into a template they’ll provide you with. I have a British passport so I went that route.
  • An original or certified copy of recent proof of address documentation such as a recent utility bill.
  • A signed ‘Declaration’ document, which they supply you with.


For safety sake (as I remember from when I applied for my British passport) I supplied them with an original utility bill for my Telkom account, my rates account and a financial account I have. You’ll be posting these documents to them so the last thing you need is for them to get something that they won’t accept and you have to go through the process of doing it all again. Those 3 bills I sent them along with my RSA Passport, British Passport and signed declaration were approved. I had them certified by a lawyer by the way, but I’m sure a police station will be just fine.

Once the documents were done, I posted them off via the post office (R8 for the envelope and R32 in stamps if I recall correctly). It took just a few days for them to arrive with Lloyds as I received a confirmation email informing me that my account was now open and that I’d receive further information in the post shortly:

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I am now in the process of dealing with a foreign exchange company that will handle the transfer of the funds from my South African FNB account to my International Lloyds one through Investec. I’m using a foreign exchange company as I save about 1% in comparison to using FNB (or a bank) to handle the transfer. Sounds like a little, but do the math and you’ll see that it’s a decent few grand.

Exactly a week after receiving the above email I received the information in the post as well as a call from Lloyds to help me set up Phone Banking and Internet Banking, as well as to explain the BIC, IBAN, SORT and such codes and passwords. It didn’t take too much longer than 15 minutes to get everything sorted out and I was logged into my online banking. The Lloyds Banking interface is actually quite scary, it looks like a quick throw together (Update 01/01/2016: Their entire interface was updated a month ago and it’s really sleek now):

Lloyds Online Banking Interface

I had a meeting with the company handling the transfer of the money, I had to fill out a lot of forms including declarations, FICA and so forth. I’d recommend having someone who can certify documents around, I used my lawyer as it was the most convenient. You’ll need a copy of your ID and a utility bill to go along with your other personal details. These are further used to open an Investec bank account into which you deposit your money. Following that, the forex company takes the money from the Investec account and transfers it to the foreign account.

Once I’d successfully transferred the money, my next step will be to research various investment vehicles internationally. Because you need to keep a balance of £2,500 in your account to avoid bank charges, I’ll have £22,500 to invest and I think I’ll more than likely go for an ETF of sorts that tracks the FTSE 100 which seems to be doing alright in comparison to what the International marks have been doing. I’m open to advice though, please do share your knowledge in the comments below!

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That’s where my mind is at right now, but my research might uncover something else so I’ll update this post or write a new one based on what I finally go with.

If you have any questions, drop me a line and I’ll do my best to answer them.