Seoul Living: Opening a Bank Account in Korea

Sunday, July 03, 2005

Now if you have been in Korea for a while, it might be time for you to open up a bank account- hiding your money in the freezer is not the best way to save for retirement. It’s not a safe place and it won’t gain any interest.

The first thing you have to do is choose your bank. When you choose your bank, you should pick one that is foreign friendly and well established. These days many banks have at least 1 English speaking personnel on staff, so shop around to find one that seems to be staffed with English speakers. I am sorry, but I am not allowed to tell you the names of the major banks on the air, for legal reasons, but you can go to the Soul of Asia message board for that information. Ask around. Ask what banks your co-workers use. That’s a relatively good start.

So if you are ready to open an account, you must visit the bank in person and take your alien registration card and passport. If you did not receive the card, yet, then you’ll have to wait until your card has been issued before you can open an account. And be sure to know your home address.

Location is very important. Try to find a bank that has branches in places that you frequent. If you spend a majority of your time in Gangnam or Itaewon, then you should find a bank with a presence there. This is also very important when you are transferring money overseas.

When I first came to Korea I used one bank to transfer money overseas. Let’s name that bank K. Then when I moved to Seoul, I opened up a new account with a different bank, let’s call that bank S. Everything was fine with bank S for a while but then Korea changed some banking law and I was told by bank S that I couldn’t transfer money overseas anymore using their bank.
I had to transfer with bank K.

Simply, I was told I could only transfer money overseas using one bank and it was against the law for me to transfer using any other bank. These measures were implemented to cut down on teachers teaching illegally. They said if I wanted to fill out some paperwork and wait a couple of days then I would be able to transfer money using my new bank. I found that it wasn’t worth the hassle and so, I closed my account at bank S and just switched back to my old bank.

So pick the bank that you are going to transfer money overseas to, because it will be a hassle to change it over later.

There is no charge for you to open your account, but you should put in 50,000 won or so into your account to start. There might also be a charge to get an ATM card, this is usually only 2-3000 won.

And when you do apply for your ATM card, be sure to tell the bank that you want a debit/check card. This kind of card will have a visa logo and it will allow you to use this card to make purchases inside of restaurants and shops. The other kinds of card will not. It will only let you take money out of ATMs.
Seriously, folks.
I am not kidding. I know, you would think that they would know automatically assume that you want a debit/check card. Don’t assume. Be sure. If you don’t know how to say it in Korean then call the BBB at 1588-5644 for help. With some cards you can get a T-money embedded card. This is more expensive and often I only see it on credit cards

Also, my writer said that he found some information that since September 2007, some banks will not allow new foreigners to open an account for three months as part of an anti-phishing scam. This sounds a bit ridiculous and suspicious. I guess these banks just don’t want to deal with foreigners and this measure is their way of telling them that they don’t want their business. Now, I don’t know which banks have these measures. If anyone was told by a bank that they couldn’t open, up an account, then I would really like to know. Please send me a call.

Now, all the people that I talked do haven’t had any problems opening an account.

One more thing, if you want to be able to access your account using your computer, you’ll have to request that as well. They will then enable you to do this and they will give you a special decoder card so you can log into your account.

Now regular bank accounts will pay any interests. But you can make deposits for a certain period of time and those will gain interest. They have 3 month, 6 month, and year options available. Of course, longer the deposit, more of a return you will get.

Also you can exchange your money into different currency and keep that in your account. For example, you could exchange all your woney into British Pounds and then just keep that money in your account. The pounds will not gain any interest, but when there are currency fluctuations, you can flip your strong currency for weaker currency.

Honestly, I’m kicking myself because I could have exchanged my won into dollars months ago and then I could have changed them back for more won. So…I suggest you change some of your money now into different currencies just to be safe.

Let’s take a quick break now and then we’ll come back to talk more about money.

Welcome back and let’s get back into talking about money. I got some more information on the three month restriction for foreigners on opening accounts from korea4exapats.com.

It reads, “As part of the fight against (voice mainly) phishing, Korean banks announced that beginning September 2007, foreigners would not be allowed to open a bank account for at least three months after obtaining their alien registration card. Further, foreign account holders are to be limited to over-the-counter transactions and not allowed to use the ATM's for their banking for three months after they have opened their new account. However, we've noted that the policy isn't applied to everyone and that whether or not it is applied at all, varies from branch to branch, even within the same bank.”

My writer just told me that these phishing scams are quite vicious and they are being blamed on foreigners.

Okay, now I think we are safe because we don’t speak Korean, but I here’s what I heard was happening.

This scam is like a new form of kidnapping and ransom, but without all the dirtiness of actually kidnapping. What these scammers will do is to get a child and the mother’s cellphone number and they will call the child while they are walking home or they are away from adult supervision. Then the scammers will call and then hang up. They’ll call again and then hang up. They’ll keep doing this until the child finally turns off the phone. The kid will then go play with friends or something.

Then they call the mother and tell her that they have kidnapped her child and that she needs to transfer something like 10 million won in 20 minutes if she ever wants to see her child again. Of course, the mother will try to call her child and when she finds out the child’s phone is busy, she’ll freak out and believe that the kidnappers have actually kidnapped her child. And of course, she’ll transfer the money. Sometimes, I’ve even heard that the scammers have a way of forwarding the call mother’s call to the child back to themselves, so when the mother calls and then the kidnappers pick up- she’ll really believe that her child has been kidnapped.

Now I’m not sure how often this happens, but it must happen enough because each time I am transferring money over there is a screen that I have to answer “No” to because it asks me if I am transferring money because someone demanding I transfer money recently contacted me. I know this because every time I blindly hit yes, yes, yes, and when the anti-phishing screen comes up and I hit yes, the machine won’t let me complete my transaction.

Also some quick review. While most ATMs will be open 24 hours, some banks will not allow you to get money after 10. Remember that when you are planning to be out all night partying.

And one last thing. If you are vacationing in another country you will probably be unable to use your Korean debit card to get money from foreign ATMs. So be sure to take out all the money that you will need for the trip or take your home country’s card with you.

When I went to Bali for vacation, I made this mistake because I tried to use my Korean debit card and it wouldn’t let me take out extra money. Luckily, I had my credit card so I was able to survive for the week. If I didn’t have that, I would have had to fast all week and beg on the street to survive- not exactly my idea of a tropical vacation.

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