Studying abroad is an incredible experience that will push you into being more independent, and with that, you'll encounter decisions you've never had to make before. One of these decisions is choosing how you will manage your money safely and without paying excessive fees.
While flying with enough cash to survive for the duration of the stay, charging everything to your current credit card, or making regular wire transfers are all options, often it is much safer and cheaper to open a bank account once you've arrived.
Before you decide on how you're going to fund your life overseas, it's essential you know what fees you'll be charged on international credit card transactions, ATM fees, and how much money you'll need during your study abroad experience (including the all-important emergency fund). As everyone's circumstances are different, this will require a bit of research. However, we are here to help you understand the ins and outs of opening a bank account while studying abroad in Europe.
What Documents Do you Need to Open an Account?
Document requirements will vary depending on the country you are studying in. For example, the documents in the UK are very general, but in Italy, on top of the documents you need for London, you also would need a Codice Fiscale (tax code).
There are four documents that are commonplace:
- Proof of identity (your passport)
- Valid student visa or work visa
- Letter from your university saying you are currently enrolled
- Evidence that you have a local address (usually a rental contract) or, if you don’t have an apartment yet, proof that you will be living in the country for a given amount of time (this sometimes can be the university letter)
Here are a few countries and their requirements, just so you can get a better idea:
|Country||Requirements to open a bank account|
Choosing a Bank
Our best advice is to ask the staff in your study abroad program or local connections you make where they bank. They will have personal experience and may even be able to recommend a specific banker to contact. Here are some other tips that you need to think about:
1. Make sure to read the fine print
There is a lot of tedious reading when opening a bank account and selecting the right one. If you aren’t a math person, your brain will corrode over things like overdraft percentages, interest rates, and account fees -- but stay strong. These are important.
Many accounts will offer freebies to entice you into picking them, but a free railcard, though useful, may not be attached to the account that is right for you.
Write out a financial plan for your entire time abroad and think about what you will be spending money on. Are you bad at keeping track of your finances and may need a high overdraft? Is that railcard just going to be the cherry on top of your already awesome new debit card, or will it distract you from an even lower set of fees?
2. Find one close to home
Location is key in European banking. Even if that excellent student account deal is in your city, if the only branches are a 45-minute hike away on the opposite side of town, it might not be worth the inconvenience every time you need to make a withdrawal.
No Wendy’s parking lot ATM deposit drops here, folks. Much of banking in the EU is still done inside the bank. Thus, when looking at student accounts, the one that is right around the corner from your apartment will make it much more comfortable and less stressful -- especially if there are ever any problems.
3. Language barriers
Language can also a significant factor while abroad. Most banks in larger cities in Europe do have at least one employee that can speak enough English to lead you through this process. Though the language barrier may make things a bit more complex, think of it as a learning experience. Learn the basics of banking to help you get started. Make sure to find out if someone can speak English (or you can get a translator) before you get set on a specific account.
The Process of Opening an Account
When you finally decide on a bank, you can walk in and let them know you would like to open a student account. Through research, maybe you already have one selected. If you didn’t get that far, you could still ask them and go over the options with them.
To get even more respect in another language, learn the phrase for asking to open an account in that language, and then ask if there is anyone able to speak English. This little act of courtesy will get you extremely far -- just because you are showing you are attempting to live by the local norms.
Not every student will need to open up a bank account while studying abroad in Europe.
Though banking is pretty standard in definition worldwide, the methods of banking in each country can vary drastically. Opening an account could be as easy as it is in the US, or it could be a quest. Bottom line -- the most important thing you can bring to that banker’s cubicle is patience.
Remember, though these services are offered to students, you are still a visitor, and this process could be unfamiliar to the teller. Be patient, ask questions, and you’ll have that ATM card in your hand in no time.
When you leave, the process of closing your account will be pretty similar. You'll have to go in person to the bank and request to close it.
But Do I Really Need an Account?
Not every student will need to open up a bank account while studying abroad in Europe. For example, if you're there for under a month -- don't bother.
If you know you won't be receiving a paycheck of any kind, have prepaid your housing through your program provider, and have a backup credit card or alternate form of getting money if something goes wrong, it's probably not worth the hassle.
However, there are a couple of reasons why opening an account would be helpful or necessary:
Many countries in the EU will allow students to work on their student visas for up to twenty hours a week. So, yes, you can work while studying abroad.
Having an account allows the company to pay you as if you are a local, it gets you the money legally, safely, and you see how paychecks and the entire system works in another country.
In Italy, it is now illegal to pay for rent over 1,000 Euros in cash -- this came into effect to prevent tax evasion, so it is protecting you from crazy landlords more than hurting you.
Regardless, it still makes splitting the rent with roommates a bit more interesting. If you go the old-school route, each person in the apartment would have to take turns doing an international wire transfer from their home accounts (which includes heavy exchange fees) and then collect cash from the rest of the housemates.
If you are the one with the bank account, you take that cash from your roommates, deposit it into your handy-dandy EU bank, and make a bank transfer to your landlord with NO international fees. Done. Easy. You win.
If you plan on traveling on the weekends, a European card with a pin is just plain better than a wad of cash. Plus, if it gets stolen, you don’t lose anything but the card! Theft and pickpocketing can be major issues while traveling, so the more you can protect yourself, the better.
The security benefits are not just when you travel either. Even in your abroad city, you will have to take out cash for certain things every once in a while (many countries use cash much more than cards in everyday life -- you’ll get used to it). Now that I work for a study abroad program, one of the largest problems I see my students have is:
- Having their US debit or credit cards become blocked because there was miscommunication of the account.
- Having their card information stolen by using sketchy ATM’s that someone has rigged to steal information.
What this results in is a student that has no access to money abroad. Then to fix the issue, you have to make a lengthy international call to your bank in the US, have a new card issued, and then you have to get it overseas.
Banking Tips if You Don't Open an Account
If you decide you don't want to open a bank account abroad, here are a few tips to help you:
1. Let your current bank know you'll be traveling
To avoid your transactions being flagged and your bank account getting locked for suspicious activity, ensure you contact your bank prior to traveling and let them know the country or countries you'll be visiting.
2. Add a trusted family member to your American bank account
To mitigate any sort of lost debit card situation, I'd recommend adding a parent or other trusted family member to your bank account so they can request a new debit card on your behalf and mail it to you in a secure fashion if something ever happens.
3. Always have Skype credit
In case you need to call your bank back home, always have at least $20 Skype credit so you can make phone calls. It's cheaper than having to call from your European phone.
4. You can call your home bank to have withdrawal limits lifted temporarily
This is especially helpful if you need to pay a rental deposit, and cash is your only option. Call your bank and have them temporarily lift your withdrawal limit the day before you do so.
4. Consider a bank that will reimburse your foreign ATM / transaction fees
HSBC, which has banks in both the US and throughout Europe, will give you the option to take out money without an international transaction fee. Nerdwallet has a much more comprehensive list of international ATM fees by the bank.
Enjoy Your Internship or Study Abroad Trip!
No one wants to spend their study abroad trip in Europe worrying about money. Hopefully, with this significant logistical factor out of the way, you won't have to!
Taking the time to research your options and understand the fees you'll be paying regardless of whether you use your US bank account or open a new one in Europe can save you a shocking amount of money. Finally, always remember to have a backup way to pay for things, whether that's another credit card or a bit of hidden cash just in case of emergency.