Bank Account.

Norman

Registered
Hi,

What kind of experience do you have with opening an account, which banks have good service, which are reliable? Which are bad? How about internet access to your accounts?

Thanks!
L
 

Norman

Registered
Hi Steve,

Yes I have read those, I were thinking more about ratings of the large number of banks here. What's the good or bad experience with the different banks in terms of service, availabillity etc..

L.
 

jimdepalermo

Registered
I've had very good experiences with Citibank's Citigold service. Service fees are high, but they provide extraordinary service.

You never wait in line (except for an ATM, and the ATM withdrawal limits are double the limits for regular accounts). You have a personal account rep you get to know and who actually calls you when something needs to be handled. You can ask for an English-speaking rep. The main office even has an usher who greets you and gets you a coffee if there's a wait to see your officer or a teller.

You can handle everything online except for transactions for which government regulations require a physical signature (such as foreign wire transfers). The online system is linked to Banelco's Pagomiscuentas system for bill payments, cell phone recargas, and even movie tickets.

Citigold time deposits earn preferential rates, usualy about .5% higher than the rates available to standard Citi customers. If you maintain a balance of 50.000 pesos, which can be in mutual funds or CDs ("plazos fijos"), the fees are halved. With an aggregate balance of 100.000 pesos, there are no bank charges except for extraordinary transactions (like foreign wire transfers).

Foreigners can obtain credit cards as well, if they maintain balances to cover the credit line. Citi credit cards are good for weekly discounts at Jumbo and Disco, as well as a list of popular retailers that changes monthly, and usually includes Falabella and Rodo, for example, as well as a number of popular restaurants.

Anecdote: When I stopped by Citigold at the main office (Florida and Peron) a couple months ago to sign for an inbound transfer, the receptionist told me my account officer was home with a sick child, but a colleague could help me with the paperwork. The next day, my rep called to apologize that his colleague had forgotten one form that's required to clear the wire. I said I was overbooked and would try to get back to the office in a couple of days to sign the form. Instead, he offered to bring the form to my home when he left work. I gladly accepted, he rang the bell here at 1900, I signed the missing form, and the wire cleared the next morning.
 

SFMike

Registered
The secret to Citigold is that you actually don't need to have near that much cash. There is a fee of $25 per month if you are under balance (and that can be any amount -- I think you just need to have like $US1000 in the account) and that fee is waived for the first six months anyhow.
 

jimdepalermo

Registered
Mike is right, but after the free-trial period, the monthly fees for clients not maintaining a balance of 15.000 pesos or more runs about 90 pesos per month, including IVA etc.
 

John.St

Registered
jimdepalermo said:
Mike is right, but after the free-trial period, the monthly fees for clients not maintaining a balance of 15.000 pesos or more runs about 90 pesos per month, including IVA etc.
Still much cheaper than the AR$ 2,700 you stand to loose per year from the 18% inflation on a AR$ 15,000 account - and this does not include the risk of a peso devaluation on top of the inflation.

An account in dinero extranjero like Euro or US$ is the only safe bank account in Argentina.
 

RWS

Registered
John.St said:
Still much cheaper than the AR$ 2,700 you stand to loose per year from the 18% inflation on a AR$ 15,000 account - and this does not include the risk of a peso devaluation on top of the inflation.
Very true!

An account in dinero extranjero like Euro or US$ is the only safe bank account in Argentina.
More than one Argentine has told me how his Argentine account denominated in dollars was forcibly converted to pesos during the most recent financial crisis. One acquaintance did say that the federal government justified the conversion as a forced loan; but she of course doubted that it would ever be repaid.
 

jimdepalermo

Registered
John.St said:
Still much cheaper than the AR$ 2,700 you stand to loose per year from the 18% inflation on a AR$ 15,000 account - and this does not include the risk of a peso devaluation on top of the inflation.
First, John.St, you're double-counting. Either calculate the loss in value from inflation OR the loss in the currency exchange, but not both.

That said, the preferred rates for Plazo Fijos available to Citigold clients more-or-less cover the unofficial inflation rates or the negative changes in exchange rates, whichever you prefer to use. Calculating the USD value of funds since my initial deposit to now, I've earned slightly less than I would have in US bank CDs over the same period.

Plus, using the credit card that comes with this account, I get 15% off at Jumbo every Wednesday, and 10% off on gas, and 10% routinely at Rodo and Falabella. I bought a ton of stuff for a new apartment at special 25 - 35% discounts (with 6-12 interest-free payments).

To maintain my legal resident status, I need to have some sort of bank account into which I can make monthly transfers from abroad. I also need to maintain funds here in any case, for normal living expenses. Otherwise, I'd be paying 2-3% for money transfers, ATM withdrawals, and foreign credit card surcharges - fees that everyone here justifiably complains about. If you spend USD 20.000 a year here, your 3% transaction costs come to A$R 2.310 per year, with no benefits to show for the expenditure, and all the well-known hassles trying to deal with basic expenses and money issues.

RWS said:
More than one Argentine has told me how his Argentine account denominated in dollars was forcibly converted to pesos during the most recent financial crisis. One acquaintance did say that the federal government justified the conversion as a forced loan; but she of course doubted that it would ever be repaid.
This is a story I've heard from many Argentines. Here are the facts as I understand them:

  • For a decade, Argentina locked the value of the peso to the dollar, with 1 peso = 1 dollar. It was a stupid policy that backfired, and it was excruciatingly difficult to undo.
  • People deposited money to their bank accounts believing that each peso they deposited was worth a US dollar. In reality, the peso equaled the dollar only because of government supports, made possible by loans from foreign governments and international agencies.
  • In 2001, a general realization that the peso was increasingly difficult to convert to other currencies caused a run on the banks. People were buying dollars by any means possible, at whatever rate they could get, and they were exporting these dollars abroad, increasing the pressure on the peso.
  • To prevent a banking collapse, the government passed emergency measures known as the "corralito" that permitted only limited withdrawals from bank accounts, according to a formula that supposedly accounted for basic living expenses. The measure was based on similar actions in the US in the 1930s that stopped a run on the banks. It also prevented panicked depositors from converting pesos to hard currencies and further driving down the value of the peso.
  • Despite these measures, the economy collapsed, and the foreign exchange markets would no longer exchange pesos for dollars. No longer able to buy dollars to meet its foreign obligations and pay for its imports, the government was forced to allow the value of the peso to float according to the market.
  • When the peso fell to USD 0.25, it was understandable that people felt the government had given away 3/4 of their money. But the objective reality is that their perception of the value of their money was badly inflated to begin with.
  • When the embargo on withdrawals was lifted, the pesos in the account were worth far fewer dollars than when they were deposited. Still, a peso bought a peso's worth of goods, as long as those goods were produced domestically. There were shortages of the now-expensive imported goods whose popularity and low prices were a major cause of the economy's collapse, but essentials were still available at more-or-less the same peso price as before.
The fact is that pesos kept under the mattress would have lost value vs hard currencies in exactly the same manner as those deposited in banks. At least those in banks earned a little interest. As far as I've been able to determine, no one lost any pesos in that crisis.

As for applicability of the 2001-2 debacle to the current situation, I don't think anyone believes the peso is seriously overvalued at the moment. If it were, I suspect that many of the participants of this forum wouldn't be here, since the cost of living in Argentina would be higher than in the EU or the US. The government has deliberately allowed the peso to sink almost 30% in the last year, which has kept it quite competitive. I wouldn't be surprised to see exchange rates go to 4.10 or 4.20, but for the time being, a gross devaluation is extremely unlikely.

So, are bank accounts in Argentina risk-free? Absolute not, mostly because there's no equivalent to FDIC insurance here, and banks might fail. On the other hand, we all have basic banking needs in Argentina, and these are most easily facilitated by Argentine commercial banks. For me the question is one of balancing risks and benefits.

In that context, I'm content with my banking arrangement with CitiGold Argentina.
 
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