Seeking a better return on the current account is one of the reasons that is causing some bank users to go to the offers on this savings product in European countries. Some accounts come to offer their clients an average interest above 0,50%, that is to say around half a percentage point more than in national accounts. However, in other customer profiles they consider how to carry out this process in a legal way so that they do not have any type of legal incidence and much less fiscal. Well, it must be clarified that subscribing an account abroad is something very simple to formalize if a series of administrative requirements are met.
In principle, opening an account abroad can offer you certain advantages in the products or services contracted. With some intermediation margins that can be seen to improve by a few tenths of a percentage over the national models. Especially with regard to the contracting of the so-called high-remuneration accounts. Because indeed, in some countries, including some in the euro zone, they present an interest rate that is at least more generous than those existing in national banking entities.
Either way, the biggest problem users may have is how to formalize the process of opening an account abroad. For this factor to be corrected, nothing better than to offer you a small guide on the steps you have to take from now on so that you can satisfy this desire in your relationships with the world of money. So that in this way, you have greater opportunities for the balance of your savings account to be more powerful each year. At least you can try because You have nothing to lose with the application of this banking strategy. It may be worth a try now.
Select checking account
The biggest problem that this process will generate is choosing the savings account that best suits the applicant's profile because the large amount of offer that exist abroad and that are developed under different banking modalities (promotional, high performance, linked to earned income, etc.). One of the aspects that must be foreseen is that there will be no choice but to carry out a currency exchange in the operation, if the chosen country is not within the euro zone.
On the other hand, this banking movement carries a commission on the monetary movement that can rise to 1% on the amount contributed. On the other hand, it will be necessary to analyze whether it will really compensate making this monetary outlay given the profitability announced by the new bank. Not surprisingly, the new profitability that they are going to offer you may not be worth it due to the administrative steps that you have to formalize from now on. In any case, it will depend on your personal interest and what they offer you abroad.
Declare performance
The formalization of a current account outside our borders necessarily requires that the earnings be reflected in the next income statement. This is one of the basic conditions to open an account abroad in an orderly manner and above all in accordance with the Fiscal obligations. So that in this way, the owner of the same is in a position to control their banking movements before an inspection by the tax authorities. In any case, it is a very simple operation to carry out in which all you have to do is provide the documents issued by the new bank where the savings have gone.
Worrying about your account balance
It is very important to know if the balance of the current account opened in another country exceeds the limits established in earnings, in $50.000. Because if this is not the case, the ownership of the account should not be notified to the tax authorities. But if they exceed these monetary margins, users will have no choice but to expose it in the income statement. No limits regarding the average balance presented by the savings account during the fiscal year. Because if this process is not formalized, a tax crime is incurred that carries heavy fines to offenders.
Submit all documents
Administrative procedures are also very important to be calm before a tax inspection. To do this, you will have to send the information about the origin of the money deposited in the account abroad. They can even, if the administration were not very clear about the identification of these economic contributions, demand the income statement for the last four years. So that in the end the client does not have to worry about having taken his capital to another destination that is not his own.
Knowing at all times that this type of account must be contracted under the same conditions as your country. You must provide your national identity document or passport and it will not be necessary to have a place of residence outside our borders. In addition, due to new technologies, this entire process can be done online, comfortably from home and without going to bank branches.
Checking account expenses
A checking account is a product that practically all clients have contracted because it is the gateway to a good part of the banking operations. As a tool to have a credit or debit card, make transfers to third parties or to receive the payroll amount every month. However, if it is not formalized free of commissions, there will be no choice but to pay some expenses derived from its use. They can be higher than what users initially think and in any case it would entail a disbursement of more than 100 euros. A study by the consumer organization reveals differences of up to 250 euros per year depending on the issuing entity.
For this reason, it is very important that before signing the account contract, the user is informed about the commissions that are enabled and in which banking operations they are present. So that from the beginning you are in a position to plan your expenses and what strategies you should use to minimize these charges on account every year. It will even serve as a relevant source of analysis to choose the best current account in the banking sector depending on your habits and profile as a user in this class of financial products.
Overdraft payments
Whatever the subscribed account, there is a disbursement that no holder can get rid of, not even if it is hired free of commissions and other expenses in its management. It is the one that refers to the commissions for being in the red number in the account and that is so feared by your high penalty. Simply by spending more money than we have, financial institutions can charge every day that this product is uncovered. Through a double penalty that we expose below.
Commission on the debit balance: it is the percentage that is applied on the highest amount that is had on the debtor positions. Its average is around 4,50%, although sometimes the banks themselves are based on a minimum charge of no less than 20 euros. Interest on the debt: it is the amount that is applied over the duration of the debt and that can lead to the money charged by the bank being higher than that initially contemplated by the user. This is because the debit balance is multiplied for the days in which an overdraft occurs and which can reach interest rates close to 10%.
Cards, checks and transfers
Other of the most common banking operations where financial entities charge a higher surcharge to their customers are those that have to do with credit or debit cards and transfers. On the first of them, maintenance and renewal commissions are applied that they range between 20 and 40 euros every year, depending on the subscribed model and the issuing entity in charge of marketing them. Of course, unless the holders direct their payroll or regular income or make purchases with this means of payment above an amount stipulated by the banks.
Bank transfers and check deposits, on the other hand, is another source that reports a fixed expense every year. Regarding the second of the banking products, it entails a cost of 0,3% on the amount, with a minimum of 3 euros per charge, while in international operations it rises to 7,5%. Regarding bank transfers, they present commissions of 0,50% if they are made at the counter and somewhat cheaper through the Internet, around 0,30%. While on the other hand, those denominated as urgent can rise up to 1%, almost double that of the usual movements. In almost all cases, they generate an expense that there is no choice but to pay.