Wouldn’t you know it, just a few weeks after intentionally overdrawing our bank account we had another mini financial crisis:
We needed a massive amount of cash in a foreign country in a very short period of time.
First, we signed a lease and paid a security deposit, 1st/Last month’s rent, and an agent’s fee.
Then we enrolled Jr in school and paid a full semester of tuition.
How do you transfer that much cash overseas without paying crazy fees and stupid exchange rates?
With the International ATM Bonanza, of course.
International ATM Bonanza
Over 10 days or so I visited the ATM just a few times and withdrew ~$15,000 at market exchange rates with no ATM fees.
No ATM fees? Nope. We get reimbursed 100% for any/all fees.
No Foreign Transaction Fees? None.
No weird currency exchange fees or commissions or terrible bid/ask spreads? No sir.
What is this madness!?
No Fee International ATM Cards
The not so unknown secret of course is a no fee bank that reimburses ATM fees.
Or banks, with an s.
Expats and travelers seem to fall into 2 camps, one which says Fidelity is the best and the other which prefers Schwab.
I say, “Why not both?”
Both banks have no fees* and reimburse ATM fees. Fidelity has a $500 daily withdrawal limit, and Schwab has $1,000 (but can be increased, which I may do in the future. Note to self: Call Schwab tomorrow.)
Both banks reset their daily limit at midnight EST. If you go to the ATM at 11:55, you can do double withdrawals – 2 transactions 10 minutes apart. This works well for getting a lot of cash in 1 day, or reducing the number of ATM visits required to build up large cash hoards. Sometimes I remember to actually do this, but since there are about 900 ATMs within 30 seconds of my front door I don’t worry about it too much.
* Fidelity has small print on their website that states the following: “Please note, there is a foreign transaction fee of one percent that is not waived, which will be included in the amount charged to your account.”
This fee is for PURCHASES ONLY. It is never charged on ATM withdrawals. (verified by life experience, and confirmed via phone) Purchases belong on a rewards credit card anyway.
Schwab vs Fidelity, an Experiment
Then we got crazy (as one does after a couple pints…)
I had a Fidelity card, he had a Schwab.
We found a bank with 2 ATM machines adjacent to each other.
We inserted our respective cards simultaneously and each withdrew 100 Euros.
In USD, the two transactions were equivalent.
Conclusion: Use either Fidelity or Schwab, whichever is better for you. Or both.
Note: both cards are for US Residents only. ;) You must have a physical address in the US to be approved.
For the purposes of this blog post, On Jan 18, 2018 I repeated the experiment in Taipei, withdrawing 3000 TWD with each card, one immediately after the other from the same ATM. By my math, aside from bank posting dates they are the same.
Note: The official TWDUSD exchange rate on January 18th was ~0.0339. This puts our cost of conversion at roughly 0.02% or 2¢. That seems pretty low to me…
Referrals and Free Benjamins (that’s $100)
If you happen to be personally referred to Schwab by an existing account holder they will give you $100. Or you can just refer yourself like I did (use code REFER.) Disclosure: if you sign up for a Schwab account, we get nothing.
Fidelity also has a referral program for new account members, but they don’t give either of us anything. As far as I can tell they just offer you a way to sign your friends up for free spam mail. You can open a new account here.
btw, a great addition to one or both of these ATM cards is a No Foreign Transaction Fee credit card.
Are there other better alternatives?
I looked at a FOREX account, but bid/ask spread was 4%.
I looked at Transferwise and Revolut, but they don’t do Taiwan Dollars (or many other currencies.)
International wire transfers? Fees up to $50 and sometimes require a notary signature (or worse a Medallion Signature Guarantee.) Plus, I don’t want any foreign bank accounts thanks to FATCA.
Carry cash and exchange at the airport? The world’s worst exchange rates
Bitcoin… volatility and liquidity are not your friend.
For the purposes of normal cost of living cash flow, I haven’t found anything better than your friendly neighborhood ATM.
If I’m missing anything, please let me know. I can add it to this list.
With the tag team combination of the Fidelity and Schwab ATM cards it is possible to quickly access a massive amount of cash with no ATM fees and favorable exchange rates. That is the International ATM Bonanza!