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Hi Douglas – here’s some more information from coastal expat John Williams – you can read John’s article about living off his savings interest in Ecuador here: https://members.internationalliving.com/i-live-off-my-savings-interest-in-santa-marianita/
John says:
1. Most of the bigger Co-ops are covered by the COSEDE government insurance up to $32,000 including JEP, Progresso, FINCA Bank. At the government link, you can enter the name of a bank or coop and it will tell you if they are covered: https://www.cosede.gob.ec/conoce-tu-monto-de-cobertura/ (NOTE: You may only be able to access this link from inside Ecuador.) Coverage is similar to the FDIC in that it is a government guarantee of an insurance plan that the financial institutions pay into.
2. Actual banks pay interest in the 5.0 – 6.0% range on one year CD’s. Co-ops are similar to Credit Unions in the USA and pay 8.0 – 9.5% interest on one year CD’s, and you can have the interest paid monthly into a savings account where you can access it.
3. Co-ops typically have their open bank accounts at banks. To transfer into a Co-op you need to set up an account and then get their BANK account information from them. The transfer is then from your bank to the Ecuadorian Bank where the Co-op has their account and “for credit to” the bank account of the Co-op, and for further credit to your account at the Co-op. Transfers from an Ecuador Bank to a Co-op are pretty simple and routine. Intra-Ecuador transfers are relatively easy, but Ecuador is a little behind in electronic banking and usually requires you to go to your financial institution to make a transfer instead of being able to do it online.
Hi Douglas – thanks for your question!
We reached out to Jim Santos to get an answer for you – he’s written many articles for International Living magazine and Ecuador Insider. Jim says…
“The banking situation in Ecuador is reasonably stable, but it is a complex field that requires the input of professionals – especially during the current COVID-19 crisis. Any list that I might draw up would be incomplete at best, and possibly out of date by the time you read it. In general, there are government supported banks, at least one independent bank, and then many cooperativas. The banks are all insured up to a certain amount.
“Cooperativas however are private banks, much like savings and loans in the US. There are some cooperativas that are insured, but not all. Generally speaking, the cooperativas offer higher interest rates, and make their money making small personal and business loans. As all over the world, you can assume that the higher the interest rate paid, the greater the risk to the investor.
“I have personal experience transferring funds by wire into and out of Ecuador. I have never had a problem, and fees will vary – both in the US and in Ecuador. For transferring within the country, most banks and cooperativas have web sites where you can transfer to other Ecuador banks. I had two accounts, one in Banco Pichincha for general use (paying bills online, debit purchase) and a savings account at a cooperative JEP.
“BTW, our Pichincha account was savings also. You will find that writing checks can be a bit of a hassle. They are very particular about signatures matching, and there can be no scratch-throughs, overwrite corrections, or misspellings. Many businesses will not take checks. When it comes to making deposits, some banks have limits on the amount of the check that can be deposited at a time – and there is usually a 7-10 day wait until it is available.
“One important thing to remember about moving money into Ecuador is the cost of getting it out again. Although there is talk of changing it, currently there is a 5% exit tax on any funds transferred out of Ecuador. This even includes ATM withdrawals and debit purchases. For example, I purchased goods in the Panama airport once with my Banco Pichincha debit card, and found the bank charged the 5% exit tax on a purchase of less than $30.
“Many expats have found the advice and assistance of professionals to be well worth it. Two you may consider are Sebastian Cordero ( scordero@rcpabogados.com ) and
Camila Moreno ( cmoreno@morenodidonato.com ). Both are Ecuadorian attorneys who deal in immigration and banking issues. Both are fluent in English and very easy to work with.”Jim Santos
http://jimsantosblog.comHi Robert – The best thing might be to speak to an in-country attorney about your particular situation; they might have some recommendations about the best way to approach it. We have a list of some attorneys and other resources in our Rolodex: https://members.internationalliving.com/country_clubs/ecuador/rolodex/
