“Kathleen, a recent Mailbag in one of your e-letters hit a chord. I have a similar question as that reader. I would like to diversify my currencies but have very little cash with which to do so.
“So far, I have one account with Caye Bank in Belize. They convert a small monthly retirement deposit to Swiss francs. I have another account with Schwab. Needless to say, this one is in U.S. dollars. I use this for another monthly retirement. I like the Schwab account because I can go anywhere in the world, use an ATM to access the funds in the local currency, and pay no transaction fees (this is what I did when I attended your Medellin conference). This was a great tip that I learned from Paul Terhorst at your Orlando conference in October. (I learned so many things there. It was really eye-opening.)
“In July I will begin receiving monthly Social Security checks. I would like to use part of these funds to live on, in Ecuador. I would like to use the remainder of these funds to purchase additional types of currencies. My dilemma is this:
“Do I need multiple bank accounts, in multiple countries to do this? I don’t want to have to pay ATM transaction fees every time I need funds. The Schwab account is totally cost-free. Caye Bank not only charges a monthly maintenance fee, but also a transaction fee.
“I have given this problem considerable thought but have not found a solution. I’m sure that many of your readers would be interested in your reply to this dilemma. I have been asked this question by several individuals.”
–Alan G., United States
You can hold multiple currencies at Caye Bank, but, right, their fees are on the high side. Most private offshore banks will allow you to open accounts to hold various hard currencies, but most private offshore banks are also going to charge fees, just like Caye Bank.
The option would be, as you suggest, to hold a number of different local-bank accounts. This could mean no transaction fees (depending how you organized things and when and where you wanted to access which funds).
But I don’t know of another solution. You go the efficient private bank route and pay the fees…or you go the complicated local bank route and avoid them (maybe).