RapidRequest: Schwab and what else for foreign ATMs?

Chicago Seminars attendee and new buddy Mike C writes:

With the extended time you spend abroad, what kind of checking account do you have that gives you flexibility in using foreign ATM’s. I’ve been rocking the Charles Schwab high yield checking. So far I have not found anything that beats it because of the rebated ATM fees and pretty good forex fees.

Mike does indeed know how to rock, and every overseas traveler from the US should carry Schwab, too. Father of Rapid Traveler and The Rapid Traveler have been satisfied Schwab customers for decades. Today The Rapid Traveler used his Schwab 2% cash back credit card for the last time and solemnly laid it to rest; he will never use the laughable Bank of America replacement.

But Schwab has stayed in banking and their High Yield Investor Checking comes with no monthly service fee, no account minimum, ATM fee reimbursement and no foreign exchange fees. Mike C probably was referring to getting good forex rates as well, which some banks goose, since the Schwab card has no foreign exchange fees. The only downside overseas is the ATM fee reimbursement is not 100% perfect as overseas banks do not always code the transaction correctly. And for those who may consider using it as their primary domestic checking account, since Schwab does not have physical bank branches, they instead provide prepaid deposit envelopes for checks. Another great benefit, though, is online transfers to your accounts at other banks are free both in and out. The interest rate is competitive, especially for a free checking account. Schwab also has an online savings account, though rates are beaten by a number of online competitors.

But the question was what else to use? A number of banks have alliances overseas that allow for waived ATMs fees at their partner banks, but these are confusing to remember and generally still wallop customers with foreign exchange fees.

HSBC to the rescue. Yes, surprising that a large bank has a customer-friendly product, and HSBC is making major changes to their US presence so the situation bears monitoring, but for nearly a decade living in Asia prior to Schwab, HSBC was The Rapid Traveler’s best friend.

HSBC’s Online Savings Account has with no monthly fees or account minimums. When using HSBC ATMs, there are no ATM or foreign exchange fees. Their ATM network is one of the best in the world, particularly strong in Asia and Europe, though they do not have a worldwide ATM search tool, so specific HSBC country websites need to be consulted. Note that savings accounts by law have certain limitations on transaction frequency, but occasional frequent use generally draws no more than a warning letter.

The Online Savings Account provides a simple ATM card with no Visa/MasterCard branding, which is good for HSBC ATMs but can be a problem overseas at other ATMs.

To ensure maximum flexibility, a debit MasterCard can be obtained by opening a HSBC checking account,  the best option being Choice Checking if able to arrange direct deposit to waive the monthly fee. Once the debit card is received, contact HSBC to link the savings account to the debit card. Then when using ATMs make sure to withdraw from ‘savings,’ not ‘checking’ or ‘current.’ The debit card does waive ATM fees on HSBC ATMs for withdrawls from the checking account, too, but also adds foreign exchange fees, which is why the savings account is preferred.

Warning 1: moving funds online between HSBC accounts appears to automatically update as the ‘available balance,’ but the ‘bank balanc’e takes a business day to catch up and that is what matters. Once The Rapid Traveler got reamed for a $40 overdraft because he moved funds and withdrew the same day, and it was a pain to get the fee reversed. Whenever possible move funds a business day in advance.

Warning 2: in some countries HSBC ATMs do not give the option to select from checking or savings. The Rapid Traveler encountered this in France and Georgia. In these cases the withdrawal from the debit card defaults to the checking account and gets hit with fees, so it is best to use the ATM card instead, which will only have the savings account.

Do any readers have debit/ATM cards they love for use overseas? Any country-specific tips and quirks?