Guide to banking for expats in Loja Ecuador

Where are you going to stash your cash? Loja has at least 10 banks and an equal number of financial cooperatives within the city. Most will be happy to work with expats/immigrants although not all will be able to do so without the help of a translator (some institutions are quite small and do not have a staff person who speaks English or any other second language). That is one way Life in Loja can be of help (more about that later).

Like in the United States, cooperatives usually offer savings accounts or certificates of deposit that pay higher interest rates than the banks. Yet even the banks offer much higher rates than in the U.S. or Canada so other considerations come into play.

One consideration is deposit insurance. Through the Ecuadorian government it is possible to have individual accounts insured up to $32,000. However, not every bank or coop meets the criteria to offer that full amount of coverage so this is an important question to ask - "What is the maximum coverage available?" - when looking at a place to park your funds.

Another consideration is the bank's or coop's longevity. In a way, it's a different aspect of the insurance question because there were many bank failures in 1998-99 which led to the government converting from the Sucre to the dollar. Many citizens lost a lot of money, and with that, trust in the banking system. So the second question to ask is - "How long has this bank been in existence?" (in other words, did it survive the financial crisis or is it less than twenty years old?).

Other things to consider are convenience (times when the offices are open, number and location of ATMs, is online banking offered, etc.), and the requirements needed to be met for obtaining a credit card (most give out a debit card right away but need to see a steady source of income and residency of a year or more before a credit card may be issued).

You might also want to inquire about ATM fees. There usually are none when accessing your own account funds in Ecuador but many expats use debit or credit cards from their home country to withdraw money from their external accounts - the ATM fees charged locally and "back there" can amount to several dollars.

Similarly, many expats also wonder about bank transfers between countries. Fees charged by the originating bank added to fees from the receiving institution can really add up. This is why many expats prefer to use the ATMs but another option is to write a check on your "home" bank account and deposit it into your Loja account. It may take several weeks to clear and for the funds to show up but usually there is no cost. However, not every Lojano bank will accept a check drawn on a foreign account so this might be another question to ask if it matters to you.

OK, so you've done your homework and narrowed down your choice of financial institution where you wish to do banking, what is needed to open an account?

As an immigrant, you will first need to show a passport with a valid visa and/or a cedula. Every bank or coop will require that. Other requirements vary from place to place. Most will want to see additional proof of your residency - a copy of a recent utility bill is the most common. You may also be expected to provide letters of reference from one, two, or three individuals or companies - and sometimes these may be limited to other account holders in that same bank or coop. The references might also need to provide their phone and cedula numbers.

Cooperatives will require a "membership fee" of five or 10 dollars which remains in your account until you decide to close it. Banks will also expect an initial deposit which varies from $10-100 but those funds can be accessed when needed and don't have to be untouched like the coop's membership deposit.

Some financial institutions will require you have an Ecuadorian phone number (you can have alerts texted to you which is a handy feature to keep track of activity in your account). Of course, an email address is needed if you want access to online banking.

A few banks will require you to show your U.S. Social Security card and fill out a tax info form for the United States IRS. Most don't, but you should know that is a possibility. It should also be noted that if you open an account using only a passport then you must update your information at the bank or coop when you receive your cedula.

If you are a couple then you have the choice of opening individual or joint accounts. One advantage of the joint account is survivability - if one person dies then the other still has easy access to the funds. When opening a joint account you'll be asked to stipulate if both people must sign for withdrawals or only one signature is needed.

Just a few more thoughts to share about banking in Loja. Some places are prone to having very long waiting lines in order to see a teller and these lines might move quickly or slowly. If you qualify for "tercera edad" status (senior citizen over age 65) then most banks have a separate line that is shorter, though you will share the line with people who are disabled, or mothers with young children.

Another cultural immersion lesson: inside a bank it is hats off, and no using cellphones. Courtesy counts for a lot, so be sure to say "Buenos días" or "Buenas tardes" to the teller, and "Gracias" at the completion of your transaction. It is also proper manners to greet the bank guard when entering and leaving.

As a newcomer to Loja you also need to know that cash is king everywhere and credit or debit cards are not all that useful in day-to-day transactions. Yes, national chains like Supermaxi, Gran Aki, Kywi, Fybeca and others will accept cards for payment but you'll really need to keep some coins and bills in your wallet or pocket.

Finally, a quick mention about Western Union. While there is not a bank branch here, there are numerous places around Loja that offer WU services (send and receive money). Many people throughout the world use them to transfer money from one country to another. There are several factors involved to determine how much the fees will be, but you might want to check into it as an option if you are needing to move funds quickly to Ecuador.

It is all quite surprising how much there is to know and comprehend about banking in Loja. Our team at Life in Loja understands the complexity and has helped expats to open bank accounts and served as translators when needed. Actually, we do lots of neat stuff to make life easier for expats settling into our city. Send us a message so we can chat about how to help you.