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Channi

Apr 6, 2011, 7:12 AM

Post #1 of 59 (3883 views)

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Transferring money to MX from USA

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Just signed up on Mexconnect- hope not to offend protocol of this site, and will nevertheless jump right in with a question:

How do I transfer my living expense funds from my IRA account in the US to Mexico on a continuing basis at the least expense?

Some American banks have business relationships with Mexican banks but my financial people in the US are located in a relatively small town with only medium sized banks. I definitely prefer personal relationships for real or implied emotional and business security purposes. Perhaps this is unworkable in the globalized digital world we live in and at International distances and I will have to rely on more detached Internet service.

Could I have my financial guy in the US deposit my monthly funds directly to my new bank account in Mexico?
I wonder how others have handled this relatively common situation.

Thanks to everyone for any and all information,
Channi

joaquinx

Apr 6, 2011, 7:47 AM

Post #2 of 59 (3859 views)

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Re: [Channi] Transferring money to MX from USA

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Most of us have a US bank account where we receive funds by direct deposit. Then we go to local bank ATMs and withdraw living expenses. The best US bank/local bank ATM relationship is where there is no fee for ATM withdrawals. One being the Bank of American/Scotia or Santander relationship. There are others to be found on a "Search Posts" of this site.

This topic has been discussed ad nauseam on this site as well as others. Without doubt, this topic will receive many contributions, so stay tuned.
_______
My desire to be well-informed is currently at odds with my desire to remain sane.

morgaine7

Apr 6, 2011, 7:51 AM

Post #3 of 59 (3854 views)

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Re: [Channi] Transferring money to MX from USA

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At least for some retirement funds, there's 30% mandatory federal tax withholding if they're direct deposited outside the US. Ouch. Be sure to check with your financial guy to see if that applies to your IRA. It doesn't apply to Social Security, so I have those payments direct deposited to my account in Mexico. For my other retirement funds, withdrawals are deposited in the US, then I wire transfer them from my US bank to my Mexico bank, maybe 3x /year unless something exceptional comes up. Cost is about $60 US /year for me, but it depends on the banks' fee structures.

Many retirees keep their funds in the US and withdraw them in Mexico using their US debit/ATM cards. I personally don't like doing it that way, but YMMV.

Kate

La Isla

Apr 6, 2011, 10:23 AM

Post #4 of 59 (3814 views)

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Re: [morgaine7] Transferring money to MX from USA

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In Reply To

Many retirees keep their funds in the US and withdraw them in Mexico using their US debit/ATM cards. I personally don't like doing it that way, but YMMV.

Kate

I am someone who has my pension checks (Social Security and one other) deposited in my bank in the US and withdraw money when needed from a Mexican bank with my debit card. It's worked out fine for me for over three years. I wonder why you don´t think it's a good idea for you. Just curious . . .

Casa

Apr 6, 2011, 10:28 AM

Post #5 of 59 (3810 views)

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Re: [La Isla] Transferring money to MX from USA

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Do you also have a Mexican Bank Account and Debit card or are you only US Debit/Credit and Mexican Peso Cash ?

Just curious.

La Isla

Apr 6, 2011, 10:33 AM

Post #6 of 59 (3805 views)

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Re: [Casa] Transferring money to MX from USA

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Do you also have a Mexican Bank Account and Debit card or are you only US Debit/Credit and Mexican Peso Cash ?

Just curious.

When I first arrived here, I had only my US bank account and debit card (from Bank of America) and withdrew money from Scotiabank or Santander. Later I opened an account at Santander, but only for local transactions, like paying my Telmex bill. I still use my BOA card for withdrawals at either Scotiabank or Santander.

morgaine7

Apr 6, 2011, 11:15 AM

Post #7 of 59 (3794 views)

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Re: [La Isla] Transferring money to MX from USA

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Quote

1. There's little flexibility in the amounts I can withdraw and/or I'd have to withdraw more often.
2. I'm charged a transaction fee for each withdrawal, so it would be more expensive than the occasional wire transfers.
3. I don't know the exact USD amount deducted until 2-3 days later and have to keep checking online until the transaction comes through.
4. I don't like carrying US cards because they're a pain to replace.

Overall, it's just easier to "feed" my Bancomer account occasionally and use its ATM/debit card for cash and (when I can) purchases. Also, the wire transfers supplement my SS income for purposes of my FM2-rentista, so all I need for INM each year is three Bancomer statements.

Kate

La Isla

Apr 6, 2011, 11:36 AM

Post #8 of 59 (3784 views)

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Re: [morgaine7] Transferring money to MX from USA

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1. I have no problems withdrawing the amounts that I need at one time, though maybe you need to withdraw larger amounts at one time than I do.

2. Since my US bank is Bank of America, when I withdraw money from Scotiabank or Santander, there is no transaction fee.

3. I can check my balance online shortly after I make a withdrawal.

4. I haven't needed to replace my debit card yet though I will have to get a new one when mine expires this September.

Since I am not a rentista, I don´t need bank statements when I go to renew my FM3 each year.

Obviously, our situations are different, so our banking needs are different. Thanks for sharing : ) .

Maesonna

Apr 6, 2011, 12:33 PM

Post #9 of 59 (3763 views)

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Re: [morgaine7] Transferring money to MX from USA

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In Reply To

Quote

2. I'm charged a transaction fee for each withdrawal, so it would be more expensive than the occasional wire transfers.

This may not be true, I mean the second half of the statement, that it would be more expensive. It depends on the particular banks and their menu of ways available to transfer money, but I know of cases where the cheapest possible price for a wire transfer was about 20 times the foreign-ATM withdrawal fee.

(This post was edited by Maesonna on Apr 6, 2011, 12:34 PM)

morgaine7

Apr 6, 2011, 12:46 PM

Post #10 of 59 (3756 views)

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Re: [Maesonna] Transferring money to MX from USA

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Quote

Absolutely correct, and my first message specified: "Cost is about $60 US /year for me, but it depends on the banks' fee structures." My US bank offers free outgoing wire transfers but charges ATM transaction fees. For other folks using different banks, the opposite may be true.

Kate

Channi

Apr 6, 2011, 2:09 PM

Post #11 of 59 (3725 views)

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Re: [morgaine7] Transferring money to MX from USA

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Okay, this is Channi again- I asked the original question about transferring funds earlier today. One response, which was confirmed by Social Security today is that SS will direct deposit my benefits into a Mexican bank- which is good- at no
charge. Now I have made a call to ask my financial guy if his firm will deposit IRA funds directly into a MX bank also.
If that is possible, my problem should be pretty much solved.

The ideas discussed above by others are very helpful, and I thank you,
Channi

Rolly

Apr 6, 2011, 2:23 PM

Post #12 of 59 (3722 views)

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Re: [Channi] Transferring money to MX from USA

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if his firm will deposit IRA funds directly into a MX bank
I've been down that road. Here is what I learned:
Mexican banks will accept deposits in three ways
1. Cash (including checks)
2. Wire transfers from another bank
3. Direct deposit from USA Social Security ONLY

An IRA broker cannot make a direct deposit; it has to go through a bank.
Some brokers have an affiliated bank that can make the transfers.

Rolly Pirate

cookj5

Apr 6, 2011, 8:28 PM

Post #13 of 59 (3660 views)

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Re: [Channi] Transferring money to MX from USA

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One further thing to consider: exchange rates. These can fluctuate considerably. When we moved to Mexico, the rate was $1 US - 10 pesos. Then, over a fairly short time, it rose to $1 - 15 pesos. It has declined somewhat since that high, but as of today was still $1 -12 pesos. If you put any substantial amount of money in your Mexican account, you could suffer significant losses from these fluctuations. In addition, Mexico has a history of devaluing the peso, although not in recent years. When it last happened, a lot of foreigners lost their shirts. Something to think about. We don't have a Mexican account and have done just fine with ATM withdrawals from our US account over the last 4 years. If I had a Mexican account, I would never keep more than 1 month's expenses in it to protect from exchange fluctuations.

joaquinx

Apr 7, 2011, 5:52 AM

Post #14 of 59 (3616 views)

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Re: [cookj5] Transferring money to MX from USA

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I found that the exchange rate over that last ten years hasn't matter as much as inflation has. Actually, depositing in a Mexican bank at 15 to 1 and now the rate is under 12 to 1 means an increase in value not a decrease since the peso has become stronger.

I have a Mexican bank account with a debit card. I use it for all my purchases for two reasons. One, my US bank debit card is sometimes not accepted at some stores while the Mexican bank card is accepted everywhere. Lastly, since I keep a few thousand pesos in the account, it's lose or theft doesn't mean a great lose as opposed to the lose or theft of the US debit card. I use the US card only to withdraw funds from the bank's ATM and then keep some cash on hand and deposit the remainder in the Mexican bank.
_______
My desire to be well-informed is currently at odds with my desire to remain sane.

Channi

Apr 7, 2011, 5:59 AM

Post #15 of 59 (3611 views)

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Re: [cookj5] Transferring money to MX from USA

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Thanks for a comprehensive thought- i.e. about the exchange rate...I am wondering if a MX bank would hold my money in my account in their bank as USD funds, therefore not exchanging the money into MX pesos until I gave permission?

morgaine7

Apr 7, 2011, 7:22 AM

Post #16 of 59 (3597 views)

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Re: [Channi] Transferring money to MX from USA

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Yes, you can open a $USD account, at least at Bancomer. I had one but finally closed it because I hadn't used it in 3+ years. I don't deal in large enough amounts for the exchange rate to make a significant difference.

Ditto everything Joaquinx said. When my wallet got stolen, replacing the Bancomer debit/atm card took about 10-15 minutes at the branch. Replacing the US bank card took weeks.

Kate

Anonimo

Apr 7, 2011, 7:28 AM

Post #17 of 59 (3591 views)

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Re: [morgaine7] Transferring money to MX from USA

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When I mislaid (left) my Bananex card at the Pátzcuaro Banamex branch, we quickly cancelled the card using their hotline. Six weeks passed before the new card arrived. Meanwhile, the old, now cancelled card showed up. —Worthless.

Banamex Patz couldn't seem to give me the new card, for whatever reason, so we went to a Banamex in Morelia. Twenty minutes later, I had a new card.

Yet another example of "YMMV".

Saludos,
Anonimo

Channi

Apr 7, 2011, 7:29 AM

Post #18 of 59 (3591 views)

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Re: [morgaine7] Transferring money to MX from USA

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I just signed up yesterday on this forum and I have received so much good information very quickly which, at the very least,
I can use for double checking. Just wanted to say thank you to all that have responded- it buttresses my faith in my fellow beings, Channi.

richmx2

Apr 7, 2011, 12:15 PM

Post #19 of 59 (3551 views)

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Re: [cookj5] Transferring money to MX from USA

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Channi:

It hardly makes me an expert on Mexican banking, but I had an job teaching English and helping with some translations in the legal department at what was then Banco Bital when it was being sold to HSBC . At least according to the banking lawyers, one of the ironies of Mexico is that the meltdown and revaluation of the peso led to regulations that make Mexican banks basically failure-proof. They have very high capital reserve requirements (one reason loans are so difficult to get in Mexico) and — should the bank have problems, it is forceably sold.

It was ironic that during the U.S. banking meltdown, Mexican banks remained stable... the rarity of mortgages had a lot to do with it, but there was something odd in a situation where the huge U.S. banking corporation, Citibank, was dependent on its Mexican operation, Banamex, to stay afloat. There was a very real possibility that the Mexican government would force Citibank to sell Banamex — both because there are regulations designed to prevent foreign governments from holding shares of Mexican banks (and the U.S. government bought Citibank shares) AND because the Mexican regulators didn't want a Mexican bank connected to such a shaky enterprise.

Of course, a radical change in the value of the peso is always a possibility, but then, the U.S. dollar has started fluctuating lately too. I suppose we could all start carrying our savings in gold chains.

http://mexfiles.net
http://voiceofmexico.com
http://editorialmazatlan.com

mazbook1

Apr 7, 2011, 1:02 PM

Post #20 of 59 (3539 views)

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Re: [Channi] Transferring money to MX from USA

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Channi, here is another solution to the transfer of funds question and one I have used for a number of years: A company called Intercam Casas de Cambio, S.A. de C.V. that has at least 80 offices in México, mostly in tourist areas or places where there are a number of resident foreigners, accepts personalized dollar checks from you and deposits the pesos in your Mexican bank account the same day. Most of the time their exchange rate is slightly better than any of the banks (which take up to 2 weeks to put the pesos in your account). Also, they offer wire transfer services to their bank in the U.S., so that there is a much smaller wire transfer fee ($10 - $20 dollars) than what is charged for an international wire transfer fee, AND you have the peso funds much more quickly and at a better exchange rate than at a Mexican bank. Been there, done that also.

I have used both Intercam services many, many times and have always been 100% satisfied. I recommend them highly.

joaquinx

Apr 7, 2011, 5:14 PM

Post #21 of 59 (3497 views)

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Re: [mazbook1] Transferring money to MX from USA

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In Reply To

Most of the time their exchange rate is slightly better than any of the banks (which take up to 2 weeks to put the pesos in your account). Also, they offer wire transfer services to their bank in the U.S., so that there is a much smaller wire transfer fee ($10 - $20 dollars) than what is charged for an international wire transfer fee, AND you have the peso funds much more quickly and at a better exchange rate than at a Mexican bank. Been there, done that also.

Bank rates at HSBC were today at 10.80 while ATM's were 11.75. Mexican banks set their own rates while ATM rates are set by your US bank.
_______
My desire to be well-informed is currently at odds with my desire to remain sane.

mazbook1

Apr 7, 2011, 7:26 PM

Post #22 of 59 (3477 views)

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Re: [joaquinx] Transferring money to MX from USA

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HSBC doesn't have a very good reputation for decent USD to MXN exchange rates. Banco Santander today was 11.50, and although I didn't check today, I would bet that Intercam was somewhere in the 11.55 to 11.60 vicinity. ATMs might be at 11.75, but that's before fees, both the local ATM fee (generally in the $25 to $35 peso range) and your U.S. bank's fee. The only way you actually get that 11.75 is if you are lucky enough to have a no fee ATM card from a U.S. bank or credit union, and even then, to my knowledge only the B of A --> Santander or Scotia ATMs will forgive the local ATM charge also.

Unfortunately, I don't have a B of A account, so I really try to limit using my U.S. bank ATM card in México, although if I take out the full maximum, $6,000 at a Santander ATM, I usually get a net exchange rate of about the same as what Santander is giving that day.

joaquinx

Apr 8, 2011, 6:27 AM

Post #23 of 59 (3427 views)

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Re: [mazbook1] Transferring money to MX from USA

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I stand corrected. HSBC does have a much lower exchange rate than other banks. I would like to point out that bank rates are only good if you have US currency to exchange for pesos. Most ex-pats don't have large sums of dollars while tourists might have. I will stick to my believe that the overwhelming majority of ex-pats get funding via ATM's where the exchange rate is set by their US bank. I do have an BofA debit card and withdraw from Santander. Even with the ~20 pesos fee from Santander and the exchange fee levied by BofA, the rate is very, very good.
_______
My desire to be well-informed is currently at odds with my desire to remain sane.

Casa

Apr 8, 2011, 8:13 AM

Post #24 of 59 (3404 views)

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Re: [mazbook1] Transferring money to MX from USA

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I got 11.8322 at Santander ATM with my BofA card yesterday April 7th .

USAA does not charge a fee for up to 10 ATM transactions per month and they will REFUND you the atm charges the local ATM/BANK charges you, however not everyone is eligible for a USAA account

La Isla

Apr 8, 2011, 9:00 AM

Post #25 of 59 (3387 views)

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Re: [joaquinx] Transferring money to MX from USA

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In Reply To

I do have an BofA debit card and withdraw from Santander. Even with the ~20 pesos fee from Santander and the exchange fee levied by BofA, the rate is very, very good.

I have a BOA debit card and usually make withdrawals from a Santander ATM. I´ve never had an exchange fee levied.

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