HOW TO OPEN A US DOLLAR ACCOUNT IN MEXICO
by Baja Real Estate Guide
We all become so accustomed to US dollars being accepted in the Baja that we forget it is a FOREIGN CURRENCY in Mexico! Imagine walking into a restaurant in the US and trying to pay the bill with pesos! We walk into banks in Mexico assuming we should be able to transact dollars in the same way we do pesos. It doesn’t work that way. If you remember that US dollars are a foreign currency in Mexico, it will go a long way toward helping you make sense of the restrictions that are placed on US dollar accounts.
THE PROS of opening an account:
- Allows you to keep your money in USD, a traditionally more stable currency.
- Your bank will offer a much more favorable exchange rate than local stores or restaurants.
THE CONS of opening an account:
- They require a minimum balance of roughly $300 to $1000 dollars or a fee will be charged monthly.
- American citizens are required to formally declare their foreign bank account on their taxes through the FBAR form.
WHAT TO BRING WITH YOU TO THE BANK WHEN YOU OPEN THE ACCOUNT
We recently visited 5 of the most popular banks in Los Cabos among the Expat community. Even though you may find these banks in Canada or the US, they are not inter-connected. Some may offer reduced international wire transfer fees though if you’re wiring money from your Mexican HSBC account to your Canadian HSBC account. The following is a summary of their different requirements and offerings as of September 2017.
HSBC / SCOTIABANK / SANTENDER / BANCOMER
- Current passport
- Current Immigration Visa
- Recent utility bill in your name. Accepted ones are water, CFE, Telmex. If you are renting and the bill is in the owner’s name, bring along the original rental contract.
SANTENDER does not require your Immigration Visa but will ask for 2 personal references with phone numbers in Mexico.
HSBC also requires an active peso account in Mexico that is older than 6 months at any recognized Mexican banking institution.
Only SANTENDER and BANCOMER will open up a US dollar account on the spot. SCOTIABANK can take up to 72 hours to approve the account and HSBC will take anywhere from 15 business days to 3 months.
- For the process to go smoothly, make sure your name on the utility bill matches the format of your name on your Passport. If you are presenting the rental agreement because the utility bill is in the landlord’s name, you may want to also bring a copy of his/her IFE if he/she is Mexican or Passport if he/she is American or Canadian.
- If this is a joint account with your spouse, pay attention to whom they put as the “TITULAR”, or account owner, as only that person will be approved for most of the activity on the account.
MINIMUM AMOUNT REQUIRED TO OPEN ACCOUNT
Banks typically won’t accept US dollars in cash to open an account. Come prepared with a check or be ready to initiate a bank transfer. If it is a US or Canadian check, it can take several days or even up to 3 weeks for the funds to be available. The amount required to open the account varies from bank to bank:
HSBC / SANTANDER / BANCOMER
These 3 banks do not charge an additional fee for online banking access. Restrictions are much tighter on dollar transfers than on peso transfers. Most banks will only allow you to transfer dollars to another dollar account within the same bank. Thus, if you need to pay someone in dollars at adifferent bank, you’ll typically need to write a check.
Scotiabank does not offer online banking for US dollar accounts.
Only HSBC offers ATM withdrawals of US dollars in Los Cabos at either of these machines:
- San Jose – the ATM machine in the HSBC branch in Plaza Las Velas (behind La Comer)
- Cabo – the ATM at Walmart
WITHDRAWALS AT THE BRANCH
This is where the banks vary the most!
INTERNATIONAL WIRE TRANSFERS
Online: Both SANTANDER & BANCOMER offer online wire transfers right when you open your account. Their fees range from $35 to $40 USD to send. A separate fee is applied to receive when you receive a wire. HSBC offers this feature after a 6 month waiting period for $40 USD.
SCOTIABANK only allows international wire transfers to be handled directly at the bank’s branch.