The Colpatria Rentapremium account is arguably the best savings account in Colombia. The savings account pays a decent interest rate, which is higher than the other banks in Colombia and is much higher than savings account interest rates in the US.
The Rentapremium account also has no fees unlike savings accounts from many other banks in Colombia that have fees.
Colombia in many ways is still a cash-based economy. You can use cash to pay bills and nearly one-third of Colombians don’t even have a bank account.
According to Bancolombia in 2015 only 5% of adult Colombians had a checking account, only 3% had a mortgage, only 21% had a credit card and 68% had a savings account.
I lived for over four years in Colombia without a bank account in the country. Before opening an account I simply used my ATM cards, credit cards and cash. But last year with the improved Colombian exchange rate I finally decided to open a savings account.
I spent some time researching the savings accounts offered by the banks in Colombia and discovered the Colpatria Rentapremium account, which I believe is possibly the best savings account in the country.
The Colpatria Rentapremium Account
One of the biggest benefits of the Colpatria Rentapremium account is that it pays a decent interest rate of 2.6% annually for a balance above 5 million pesos but less than 50 million pesos. Above 50 million pesos it pays 3.2% and even higher for above 100 million pesos.
This compares to lower savings account interest rates at several of the largest banks in Colombia.
For example the interest rate for a savings account with a balance of 6 million pesos currently receives an annual interest rate of 1.0% at BBVA, 1.3%% at Banco de Bogotá, 2.0% at Bancolombia and 2.0% at Banco de Occidente.
In comparison the average interest rate in May for savings accounts in the US was a pitiful 0.06% according to the FDIC.
The Colpatria Rentapremium account also comes with a Visa debit card. Colpatria eliminated all fees with its savings accounts, so you can withdraw funds at a teller or by using the debit card at Colpatria ATM machines without paying any fees.
Most of the savings accounts from the other banks in Colombia have a number of fees including ATM fees and branch withdrawal fees.
With the Rentapremium account I can recharge cellphones online and also pay bills online like my EPM utility bill. I can also receive wire transfers from my accounts in the US.
So I can transfer money to Colombia with an exchange rate that is close to the rate on xe.com and use my Colpatria debit card to withdraw funds from Colpatria ATM machines with no fees.
Colpatria is reportedly the fifth or sixth largest bank in Colombia. Colpatria is majority owned by Scotiabank in Canada.
Colpatria has over 180 bank branches and over 1,000 ATM machines in Colombia. You can find Colpatria ATM machines in most shopping malls in the country.
Opening a Bank Account in Colombia
What did it take to open a Rentapremium savings account at Colpatria?
- My original Colombian cédula de extranjería ID and copy of the front/back
- Copy of my Colombian tax return (Declaración de Renta) showing my income as they wanted to verify a minimum income to open the account
- Manually filling out an application form with address in Colombia and phone numbers
- Answering questions about my job and how long I have lived in Colombia but I did not have to provide proof
I also have CDT accounts at two other banks in Colombia. In both cases I just needed my cédula de extranjería and an application to open the accounts. In no cases in opening accounts at three different banks in Colombia did I need to show my US passport.
I have seen some posts on the Internet claiming you can open a bank account in Colombia with just a passport. While this may be possible with connections, every bank I talked to in Colombia said they would not open a bank account with just a passport, they all said a cédula is required.
Not all bank branches in Colombia are experienced in opening accounts for foreigners. You are less likely to encounter problems if you go to a bank branch in an area with more foreigners like El Poblado in Medellín
When I opened my Colpatria account at a small local branch away from El Poblado they originally said I couldn’t but I insisted and they called the main office and determined they could open an account for a foreigner.
CDTs in Colombia Pay High Interest Rates
A CDT in Colombia is basically equivalent to a CD in US. The banks in Colombia currently pay much higher interest rates for CDTs in Colombia than you can get with CDs in the US.
The interest rates paid by banks for CDTs in Colombia depend on the balance, with somewhat higher interest rates typically being offered for higher balances. For example, here are the CDT interest rates currently being offered by Colpatria:
It is possible to find some CDT rates higher than 8% in Colombia but this will normally require a high balance. For example the Banco de Occidente 540-day CDT for 100-499 million pesos currently has an 8.2% interest rate. Most CDTs in Colombia with lower balances currently pay between 5-7% annually.
In comparison in the US 1-year CDs currently pay an average interest rate of only 0.22% according to the FDIC. The highest interest rate offered in the US for 1-year CD currently is 1.25% according to Bankrate.
The CDT interest rates being offered by banks in Colombia can fluctuate. That’s why I now have CDTs at three banks. I opened CDT accounts with the major bank that was offering the highest interest rate at the time. I recommend checking CDT rates at several banks as they will vary.
My plan in opening CDTs is to transfer money to Colombia when the exchange rate is higher and put the money in CDTs earning interest that is much higher than the interest paid in the US. This essentially locks in an average higher exchange rate.
Don’t Forget FBAR and FACTA
A US taxpayer must file an FBAR (Foreign Bank and Financial Accounts) report annually in the US if the aggregate of your foreign accounts exceeds $10,000 at any time during the year.
FATCA, which foreign banks have to deal with, has much higher reporting thresholds, which vary based on whether you file a joint tax return or live abroad. The full FACTA reporting requirements from the IRS can be found here.
Also US taxpayers keep in mind that interest earned on foreign bank accounts must be declared on your US tax return.
The Bottom Line
The biggest challenge in opening a bank account in Colombia is that all six banks I talked to said that a cédula is required. So you need a visa before opening a bank account as you can’t receive a cédula without a visa.
Opening a Colpatrica Rentapremium account has benefits in my experience. The account offers a decent interest rate. With the account I can wire transfer funds from another country and access these funds in Colombia without fees.
I can also recharge my cellphone online from home and also pay some bills online avoiding the need to stand in lines to recharge cellphones or pay bills.
CDTs in Colombia are also worthwhile as they pay much higher interest rates than CDs in the US.