Expats: don't get stung on banking fees
A MAJOR factor for expats moving to the UAE is the tax-free income they earn while living here. However, few are prepared for the onslaught of banking fees that can await them.
It depends on whether your move is permanent or temporary, but keeping a bank account open in both the UAE and your country of origin can be an expensive luxury.
Gérard Al-Fil, a financial journalist at Dubai Media City, moved to Dubai from Switzerland in 2004 and kept his Swiss bank account at first. This was a costly mistake, as the bank charged him more than AED 1,500 ($408) in fees per year – largely just to keep the account open and extra service costs. In 2008, he finally closed his Swiss account and transferred everything to his current account in Dubai.
He's learnt from his mistakes and believes others could benefit from them. cashy speaks to him about his story…
Why did you keep your Swiss account?
It wasn't easy to close it just like that. I had stocks and a credit card with points on which meant the transition was not that simple. So I just kept it without a plan.
I also travelled back to Switzerland for business. I still have clients there now, but fewer than before. At the beginning, I had other commitments, but these also decreased. So over time, the account became more and more of a sleeping account.
What charges did you incur?
I was charged more than AED 1,000 ($272) a year, plus credit card fees of AED 300 ($82) and other fees. It amounted to over AED 1,500 a year – and I paid that for four years.
Calling my Swiss bank also came at a cost, as there wasn't a free number for international calls. These are the type of things that you don't think about until you're out here.
In 2007, the banking fee for the account in Switzerland tripled, which was the final straw. I closed my Swiss bank completely in 2008.
What advice do you have for expats moving to Dubai?
If you move here temporarily it's good to have an account at home. If it's not a temporary thing, decide how long you want to keep your foreign account for and step-by-step get rid of the shares and funds, and transfer them to the UAE.
Try to get rid of your loans and credit cards debt as soon as possible, too. Redeem your points from credit cards in Europe for air miles.
If you keep your old account, check every six months to see if the fees have changed. The cost you look at when you leave the country is not always the same as it might be a year on.
What's your advice when choosing an account here?
Choose a bank with a big distribution of ATMs and a broad package of services, such as credit cards and brokerage accounts.
What would you do differently in retrospect?
The first mistake I made was not being prepared. I would make a plan for how I'd deal with the transition over a period of time.
I should have immediately set up an umbrella of security here, so instead of just having a savings account, I should have also got a current account, credit card, brokerage account and life saving plan straight away.
You can't just flick a switch, but you must plan to make the transition between banks smooth – and with minimum loss.
See cashy's comparison tables if you want to compare credit cards, current accounts or savings accounts in the UAE.
Have you had a similar experience? Do you have any tips for expats new to Dubai? Share with the cashy community!