As part of the perks moving to a new job my
company offered me a fee free account with one of the very famous and "too big
to fail" banks with its overseas branches.
The account is typically available to
anybody, who is willing to invest about ~ 400 K USD with the bank. I opened it up and tried three things with the
bank:
-
Applied
for a mortgage application.
-
Did some
currency exchange.
- Tested security features.
Mortgage application was very exhausting – lengthy and tortures. They
want to know more than average bank would ask you (for example, separate
interview with your partner). The
mortgage advisers would miss interview appointment at very last moment and only notify you by leaving message on the answering machine.
The end result? Their offer was 1.7%
higher than their average retail outlet. The only perceived advantage was they
were ready to loan 5 times of your wages, assuming that 25% deposit. I was actually told by the mortgage adviser that as having access to the retail sector, I would be better off there.
Another example was currency exchange. The
bank offers a very convenient feature – you can open one of the currency
accounts (15 in total available), so you can keep and spend money in a
particular currency. The bank would issue
separate card for each and every account.
Good on the surface, however there is catch. Their exchange rates are
brutal to begin with. For example USD to
YEN exchange rate is 102.8, a bank would buy it 105.3 and sell it as 99.3, the
spread is 6%. It is much higher, than
most of the exchange rates in ATMs. It is actually cheaper to go to Japan,
withdraw money from an ATM from a USD account converting it there to Yen in most of the cases. For the
less popular currencies the spread is 10%.
Security is still very traditional – pin codes, there is no calculators
to generate random codes for accessing the account, most retail banks are using these days.
The only advantage I could see in using this bank if you are from a
third world country and do not have access to retail services in the US, EU,
etc.. This provides you instant access to the mortgages, local credit cards and
so on. However you are going to pay a lot extra for it.
I decided to abandon using the account, luckily it was free for me, there
is not much use. I could have a better
mortgage, exchange rates and security with my average bank.
Have you got experience with global banking / wealth management and if
yes, what was it?
