Why You Should Open A Bank Account in China.
So, banking in China… It might not seem the most interesting of topics, but its something every foreign student / expat in China needs to know.
After speaking with a lot of my fellow 同学们 (tóng xué men – class mates) about how they access and save their hard earned Chinese RMB, I was surprised to hear just how many of them didn’t hold bank accounts in China. Now, as a resident in China now for over 20 months, I found this very interesting, as I genuinely couldn’t imagine my life without my trusty Chinese bankcard. The general consensus amongst those without Chinese bank accounts was that they thought they ‘didn’t need it’ or thought that it was too much of a ‘hassle’ to get one. While the latter might be true at times, I genuinely feel the benefits far outweigh the negatives. To demonstrate this, I figured I’d tap out a handy blog for anyone thinking of coming to China and worrying about how they would cope financially.
1. How easy is it to open a bank account in China?
The actual opening of a bank account in China is surprisingly simple, it can be done in just 20 minutes if there is no queue at the bank, you remember to bring your passport and a Chinese friend to help you deal with various banking relating words you won’t find in your everyday Chinese textbook.
The tricky part is choosing the bank you want to open your account with. In China, there is no consistency when it comes to bank branch frequency. Go to Xi’an and there is a Bank of China on nearly every street. Go to Beijing however, with your newly opened Bank of China bank account and you will have to walk some serious distance to find a local branch. Here in Beijing, its ICBC frequents my street corners. My advice is to map out your house, your university (or place of work) and various places you know you will visit often and check out which banks tend to crop up a lot for you, in my case ICBC.
2. Why don’t I just withdraw money on my foreign bankcard?
Well, you can do that of course, many people in my class do. Its just a bit 麻烦 (má fan – annoying) as some bank terminals despite stating that they accept foreign banks cards – just wont. China being China, means that your bank card might work in a Bank of Beijing ATM near your house, but lo and behold, walk ten minutes down the road to another of the same bank branch and you will be declined every time.
Not to mention, depending on your domestic bank’s overseas charging policy, expect to pay a heavy surcharge on withdrawals. Want to use your foriegn debit card to buy things? Think again, no Visa or MasterCard accepted here! In China it’s Union Pay who calls the shots. Out of all my favourite eating establishments in Wu Dao Kou, just one takes foreign debit / credit cards. Should you actually find a place with accepts a foreign bank card, you may yet find yourself in jeopardy as unless you took time to inform your bank you were coming to China (lets be honest, you didn’t, no one does) you will constantly find your transactions being rejected as your banks anti-fraud software kicks in panicking at a random purchase of some Nike trainers somewhere in downtown Beijing.
3. Noted, but won’t I have to pay lots of banking charges to move my foreign assets into my newly opened Chinese bank account?
Not really, firstly if you have a Chinese bankcard it allows you to receive actual local payments in both physical form (cash deposit) or electronic (wiring money). If you have a scholarship from your university you will need to traipse down to the bank once a month with your allowance slip to get your hands on a juicy ¥3000, kindly donated to you by your university.
Secondly should you wish to fill your account with foreign currency you can do that fairly cheaply with overseas remittance companies helping you bypass the traditionally high banking charges. It costs me just £1 to transfer every £100 I move to China, I’d say that’s pretty good value.
4. Any other benefits?
Uh, yah! If you have a Chinese bank account you can then get an ‘Alipay’ account (Chinese PayPal). This then allows you to get a ‘Wechat wallet’ (Chinese Apple Pay) giving you access to a serious amount of Chinese APPS. With my Chinese bank as a foundation I can order taxis, book train tickets, pay my rent and order pizza all from my smart phone without ever actually having to visit my bank.
Having a bank account here is not just a luxury, if you have ambitions to work in China, it’s a necessity!
5. Alright, we get it, you think having a Chinese bank account is important, but what’s the catch?
Ah! You got me, because yes there is a catch. Having a Chinese bank account will save you money in the long run, but only if you use it right. There are actually whole hosts of banking charges you need to pay if you make the same rookie errors I did.
Firstly, avoid using different brands of bank. If you have a ICBC card, don’t go to China Construction bank etc to withdraw money, although you can view your balance for free, you have to pay a small admin charge for withdrawals using a different bank ATM, so that’s why its important to have branches close by your house, university etc.
Next, try to avoid using your bankcard outside the city / province you opened it in. I know, crazy right? Sadly, due to the sheer size of China, using your bankcard outside its registered province will also incur a ‘transaction fee’. For example, last year I lived in Xi’an where I had a Bank of China account, one of the first things I did when I came to Beijing was open a new ‘Beijing account’ to avoid have to pay ¥1.5 every time I withdrew money or bought something.
Lastly and this might sound stupid but you would be surprised just how often this happens, use your bank account! For some reason which I will probably never understand, not using your bank account i.e. just letting money sit there, can sometimes incur a penalty fee (usually around ¥10). If your account then goes into deficit you risk having it shut down, so yeah, dust of that debit card once in while.
6. How do I get round these charges?
Well, if you are a rich man (or woman) which sadly I am neither, open a bank account with more than ¥100,000 which gives you a ‘premium’ account of some kind with that bank. This then means you don’t have to pay as many transaction fees as mentioned above. If you aren’t lucky enough to be rolling in money however, the solution can be to just open a lot of bank accounts. Your everyday Chinese person will do anything to save a yuan or two. Its common for Chinese people to have 3-4 bank accounts with different banks just to avoid paying a minor transaction fee. The only issue with having about three or four simultaneous bank accounts is that if your memory is anything like mine, remembering the mass of passwords will be the bane of your life.
So there you have it, a few questions answered about what can be a very complicated issue. My overall advice is just not to be deterred as the benefits of having a Chinese bank account (or perhaps another twenty if it pleases you) really are worth it.
Written By Andrew Cole - CSA Student Liaison Officer
Andrew still doesn't understand how you can withdraw money from an ATM only for the same ATM to then reject the same money when you choose to re-deposit it.