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Ask VMW: How does overseas banking work?

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Life Lessons of a Military Wife (overseas in Europe!): Ask VMW: How does overseas banking work?

Life Lessons of a Military Wife (overseas in Europe!)

My goal here is to make your life easier, especially those who are in the unique situation of being a military spouse. Yes...I've been around...but in a good way...and hopefully can share those tips, tricks and shortcuts with you too. I've been on this military bus for over 40 years now. My goals in life are to have a well-run home, few money worries, well adjusted children, money socked away and whatever happiness I can scoop out of life.

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After life as an Army brat, being in the Army myself and marrying a soldier, I can honestly say I have a bucket full of life lessons I can share to help you make your everyday life easier and enlightening. Don't waste your time making unnecessary mistakes and benefit from others who have come before you on your journey through life.

Wednesday, May 4, 2011

Ask VMW: How does overseas banking work?

I don't think I've ever walked anyone through the process...the things we take for granted!  Here's the question:

"I LOVE your blog and can't wait to come over.  I don't understand though how we are supposed to do your banking if we get paid in dollars and then have to pay bills in euros?  This is stressing me out!"

Thank-you!  You may have to get a cup of coffee to machete your way through my answer.  Rest assured, once you have been here a few months, this will all become second nature, so bear with me as I try to explain!

I can only tell you how we do it and what I recommend.  Hopefully, some spouses over here will chime in with what they do.  We always keep our stateside bank where my DH's paycheck goes...NEVER mess with that account is my first tidbit of advice as Army Finance is notorious for screwing things up, so try to mess with it the least you can!  How many times has someone told you their pay is screwed up?  It just took us months to get our corrected W-2....that's just the way it is for whatever reason.  Those finance folks work hard but sometimes their systems even they don't like to deal with...or can't....not their fault a lot of the time.

We always open up a local bank account, even in the US...this is mostly for ATM access and having a "friendly face" in the neighborhood where you can do transactions in person (that's just me).  Overseas, you'll deal in euros except on post.  The PX and commissary will be just like stateside with stateside products (and the usual international commissary aisles).  The  PX will have some local candy/chocolate, a German gift section and some 220 volt appliances...don't get me started on can use your US credit cards, checks and cash.  AAFES even has their own credit card, the Military Star Card.  Back at customer service, you can even cash personal checks and get the money in Euros or Dollars.  In Germany, Bank of America (Community Bank, they call it) has the current contract for however many years...meaning, they are the Dept of Defense bank overseas for least in Germany (here in Belgium, on the NATO base, a different bank won the contract and it is a European bank).  Banks bid every few years (5 or 10?) to get that contract to be on our overseas posts and bases.  I've forgotten...anyway, it is NOT the same bank as in the US as my MIL found out.  She still had to pay ATM fees for using her stateside Bank of American ATM card, but somehow went there in person and got the charges taken off...she's like that.    Even though it says Bank of America out front, it is somehow a different bank...maybe someone else can explain it.

But anyway, there is always a credit union on post too, but I've found they have less services and it's not as easy to transfer back and forth euro to dollars and vice versa.  One example is Andrews Federal Credit Union.  As with any credit union, I think their loans are cheaper.  We used Bank of America for ease of use and their online banking choices.  We would write a check from our stateside account and deposit those dollars into our account there.  Then we would pay our German bills from Bank of America.  When I got my bills in the mail from the German company (cable tv/phone, cause we were living in housing, so no rent, but this is also where your rent money should come from)...I would take the little orange payment slip to the bank, fill it out along with a withdrawal slip like any US bank...go to the counter.  They would then tell me what the current $/euro rate is and would say okay for your 60 euro bill, that's x amount of dollars.  I would have them add the fee (think it was $2 per bill to be paid), so I would have ONE transfer out of that account OR one check to write in dollars.  They would do the bill paying for us, which typically took a few days to get to the don't wait til the due date.  Get it done before that!

Now here in Belgium, since we pay rent, we also chose the bank with the current contract on's an Italian bank operating in Belgium.  They have online access and a little pin # generating every month, I write a check from my stateside account, go to the military finance cash cage, get the dollars in cash (for example $3k, which is the max you can cash per week)...hand carry the stupid cash to our Italian bank which is on the other side of the base and deposit it.  We chose this bank because it is NATO friendly and it didn't charge any fees.  Most Belgian banks charge fees for anything they do for you.  You can see it is a bit more of a hassle here, but that's what we chose to do.

Let me remind you NOT to get euros from the military cash cage.  Why?  Because their exchange rate is typically lower than what Belgian banks will give you.  You can deposit dollars at your Belgian bank...they will give you the dollar to euro rate and 100% of the time, it is a better rate than the cash cage.

Then, to pay our bills I go online at my convenience and before it's due and pay from our euro bank account...I can also set up automatic payments and recurring payments.  The European banking system is much more secure than ours and for each transaction, after signing into your account w/your user name and password, you also have to use your electronic pin generator (it looks like a small calculator) to generate a pin for that ONE can only use one pin one time.  Without the pin generator, you can't pay bills online, so if you go back stateside on vacation and need to pay a bill, you've got to take that with you...strange huh?  I can also make any payments in any country that is a member of the European Union (EC) with no additional fees.  So, go ahead and book that French villa you've been wanting to book (we did) and pay your deposit with no hassles!  And speaking of fees, I can use ANY bank's ATM in Belgium to access our Euro account with no ATM fees!  So far, in France and Ireland, we also did not have any ATM fees...from either bank.  Don't you wish you could say that for the US too?

So, that's how we do it.  Some people get euros directly from the cash cage and go to the company that generated the bill to pay or the landlord's bank....but, that's even more hassle IMO, plus the local banks have BETTER euro rates than the military cash cage as I mentioned before.

You'll figure out what works best for you...I just didn't want to be tied down to payday and have to pay bills then, cause the lines can be extra long at both the banks on post and the cash cages, so I write my checks and deposit our monthly money whenever I have the time and am going that just can't forget to keep replenishing your local account!  It's easy to check that online of course.

In both Belgium and Germany, there is one other way to pay your bills...the local post office!  Yes, even the post office has accounts you can open and use....or, you can take a copy of the orange billpaying slip and your euros to the post office, and they'll take care of paying the bill for you.

Last note...keep EVERY SINGLE receipt and scrap of paper from your bills and bank!  It is not unheard of before you PCS, while outprocessing, to hear from a biller saying you did not pay such-and-such bill...without that receipt, you might as well have never paid, and you won't be allowed to outprocess without showing proof OR paying it again...uggghhh.

Do you have any banking or bill paying tips to share?

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Blogger edith said...

I just wanted to pipe in and say that now that Fortis is no longer the bank on SHAPE there is no difference between the cash cage exchange (dollars to euros) and Fortis exchange rate. I now get my euros at the cash cage. My advice: bank with the European bank on SHAPE - they must waive some fees or something to give you a better exchange rate. Just my experience.

May 5, 2011 at 12:48 PM  
Blogger ****Veteran Military Wife at Life Lessons of a Military Wife**** said...

Hey Edith and congrats BTW on finally getting your orders to move!!! Ah interesting! Yes, the thing that sold me on the new onpost bank at SHAPE is that they waive all fees and make everything super easy for Shapians.

One other thing someone posted on FB that I forgot...yes, you can set up auto payments, even in Germany...this is VERY typical where you give your billers your banking info (in fact, it is even typical to pay another German from your bank account by getting their bank account info..that info is not as guarded as it is in the US)...anyway, BUT be VERY careful about this, as sometimes they make mistakes (take out too much), and I had trouble turning a bill off one time, even though I sent a cancellation notice months before we always have to cancel a few months out (for most billers, not TKS though) and it MUST be done in writing for it to be valid...just something to keep in mind and please still stay on top of those bills to make sure the correct amount is being taken out of your account.

May 5, 2011 at 1:32 PM  

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