How much money is it appropriate for individuals to keep in a bank account? A short answer is the less, the better, just about enough to meet the main needs (not for saving). In 2023, banking services turned into a functional instrument, and they are no more a way to increase your personal wealth. Why is it?
The matter is that confidence in banking institutions as places for saving money has declined considerably. You often hear about frozen, blocked, and arrested accounts, and regularly see the news of bankruptcies – and it is even more striking when these are the institutions once considered solid and reliable. All these events have taken their toll: people now opt for other investment instruments and gradually abandon using bank accounts for savings.
If the banks are no longer used for saving, what needs are we talking about then? Why should you keep the money in a bank account?
1. Account for Everyday Purposes
We are talking about regular payments that make life easier:
- Payment of utility bills
- Distance money transfers
- Online purchases
- Payment of tax debts, car fines, and so on.
The banking services are not the only opportunity to make regular payments. The fintech services market is well-developed all over the world, and anyone can find an alternative solution. For example, it is quite possible to pay the utility bills without leaving your home or possessing a bank card. However, online banking is a straightforward way to satisfy your everyday needs, while fintech instruments are just gaining popularity with users.
If you want to pay utility bills with the help of banking services, you should have about $1,000 a month on your account. And if you prefer traditional banking products, you’d better opt for anonymous bank cards.
Write to us at email@example.com, and International Wealth consultants will help you protect your personal data.
2. Account Statement for Migration Procedures
An immigrant that wishes to get a residence permit in most countries will have to prove his or her solvency to the immigration service, and provide evidence that he or she has money and can support himself/herself without relying on state social programs. This requires a person seeking to obtain a residence permit to open an account with a local bank and deposit a certain amount of money, for example:
- If you intend to get a residence permit in Montenegro for purchasing real estate, you will need at least 3,700 euros per person on the current account with a local bank.
- If you are interested in a Spanish residence permit for non-commercial residence, you will need an amount of at least 2,200 euros a month x 12 in your bank account.
- If you apply for a Bulgarian residence permit as a retiree, you will need to have 12 minimal Bulgarian pensions in your bank account: 600 leva (300 euros) х 12.
- If you need to get a temporary residence permit in Greece as a financially independent person, you will need to have at least 24,000 euros a year per applicant in your bank account.
- If you apply for a temporary residence digital nomad visa in Mexico, you will be required to have at least $27,000 in your bank account.
These are official requirements and minimum amounts of money, but immigration lawyers recommend increasing the amount of money in the account by at least 20% from the required figure. There is good news: the banks do not ask any questions about the origin of money if the immigrant opens an account to support his or her financial standing.
So if you are planning immigration, you will have to keep at least $30,000 a year per person in your bank account.
3. Account Statement to Prove Financial Transactions
Immigrants should confirm the following with documents to extend a residence permit or get a new one issued:
- The fact that they lived in the new country for more than 183 days a year. You can also provide paid utility bills to the migration service.
- The fact that they timely paid the rent, and the lessor in its turn paid the income taxes.
- The fact that there are no personal tax debts.
Bank statements will be a perfect method to confirm the fact of such payments.
Not only immigrants are required to prove the fact of money transfers from time to time. You sometimes need to collect the evidence base for the court hearing, filing a claim, tax recalculation, and other purposes.
It is better to make important financial transactions via cashless settlement using a current bank account. This means that you have to deposit the necessary amount of money in your account in advance.
4. Money to Make Large Purchases
Many countries set legal limits to settlements in cash. This is done to struggle against money laundering and financing terrorism. Here is a short list of payment limits in cash:
- No more than 10,000 euros in Germany
- Just 500 euros in Greece
- A maximum of 1,000 euros in Portugal
- In Italy, the limit was raised from 1,000 to 5,000 euros in 2023
In many countries, making expensive purchases requires a customer to have a settlement account with a bank and keep a sufficient amount of money in it.
5. Crossing the Border: Cash vs Bank Account Card
When travelers apply for a tourist visa to the target country, they should prove to the consulate that they have sufficient money to go or stay abroad. The best way to confirm your solvency is to provide a bank statement of the account where you keep a certain amount of money:
- American embassies do not set particular requirements as to how much money a non-immigration visa applicant should have, but experienced travelers advise that you have at least $2,000 per person on the card.
- If you apply for a Schengen visa, the applicant should confirm that he or she has a sufficient amount on the bank account to spend while traveling (at least 50 euros a day per person).
- If you apply for a one-time tourist visa to Japan, the balance on your bank account should amount to at least $2,000-3,000 per applicant.
Most non-immigration visas will be granted if you have $50-100 per day of stay in another country in your bank account. The employees of travel agencies that help customers with short-term visas do not recommend showing amounts in excess of recommended ones when you submit documents to the consulates. The matter is that consuls are wary when they see that the amount of money in the bank account does not correspond to the applicant’s average salary. If you apply for an Australian visa, for instance, and write in the form that you have a low-paid job as a loader, the savings of $100,000 on the account would look strange. Such applicants will be categorized as suspicious-looking potential migrants, and they may be turned down for a tourist visa.
When you cross the border for travel, you may face another issue: customs limits for the import and export of money in cash. For example:
- You can export no more than $10,000 in cash from Kazakhstan.
- You can import up to $20,000 to Thailand without duty payment. There are no limits on exporting foreign currency, but you can take no more than 50,000 Thai baht with you.
- You can import and export up to 10,000 euros in cash to Georgia without declaration.
- As for Israel, you can import up to $14,000 without duty in cash in any currency and export the same amount of money.
- Turkey makes it possible to import an unlimited amount of cash, but you can export no more than $5,000 without declaration.
Each state has its own laws regarding cash import and export. In some cases, you will face separate rules on freely converted currencies and national money. It is no wonder that the majority of travelers prefer keeping money on the card rather than dealing with customs money limits as the amount on a bank card is not subject to declaration.
If you get a tourist visa and travel, keep your money in at least two bank accounts: one for the consulate, and the other account for personal goals.
6. Bank Account To Protect Savings Against Inflation
A bank deposit is definitely not the most profitable or reliable way of saving money, especially when compared to other proven instruments. However, conservative people trust banking institutions by habit.
Here are some tips on how to choose a suitable bank in your home country or abroad where you can safely keep money on a savings account:
- The savings deposit interest rate exceeds the current inflation in the country.
- The bank did not join the international CRS standards and does not disclose the financial information about the customer.
- Choose a location outside the European Union or the States. These regions saw the most bankruptcies of banking institutions in 2023, while their competitors in Asia, in the Middle East, Australia, or even in Africa do not give the depositors any reasons to worry about their savings.
- Foreign banks open savings and other accounts and provide services not only to citizens and residents of the country but also to foreigners or those that obtained a residence permit (which is not that hard).
- The income from the savings deposit is not subject to tax (or taxation rates are not very high).
Conclusion: you need the help of a financial advisor to find a suitable bank. Write to International Wealth specialists at firstname.lastname@example.org and we will help you open a savings or another account in a suitable reliable bank based on your interests.
You can keep the money in the banking system for saving, but the maximum amount should not exceed the insured one: for example, savings deposits in Asian countries are on average fully protected if they amount to $40-80 thousand. And if you are planning to invest more money, distribute the money among several institutions.
As you see, saving money in banking institutions is a conservative strategy in 2023. Use these institutions to satisfy your personal needs and solve short-term tasks, but do not trust all of your savings to them. It will help you get the maximum advantage from cooperation with the bank.