Colpatria branch at Mayorca mall
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.
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.
What did it take to open a Rentapremium savings account at Colpatria?
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.
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.
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 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.
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View Comments
Do you have any experience with Alianza? I was told that if you set up an account with them you can wire transfer dollars to your account. They will pay market currency exchange rate and charge about 1/2 percent commission. How does that compare with the exchange rate you are getting?
I have an escrow with Alianza on the condo I bought in Medellin(builder uses them, not my choice). The customer service is so so.
Alianza Valores is a brokerage firm, not a bank, and I don't believe their brokerage accounts come with a debit card.
I don't have experience with Alianza Valores but I know a number of foreigners have used them when bringing money into the country to buy properties. The exchange rate I received with wire transfers at Colpatria was close to the market rate on the day of the transfer. Reportedly Colpatria is competitive with other banks in Colombia like Bancolombia for wire transfers. Colpatria's claim for international wire transfers is "we have the most competitive rates in the market".
Thanks Jeff; very informative article!
Great article
Jeff,how is the customer service for Colpatria(phone and in person)? Bancolombia and Davivienda customer service is terrible.
thanks
Mike
Customer service at Colpatria has been good in my experience. Some of the staff in the local branch now know me and greet me when I come in and they have been helpful and knowledgeable when I had questions about things like wire transfers and CDTs. The lines in branches are nowhere near as long as you will find at Bancolombia.
I use Colpatria's online services and haven't experienced a problem so I haven't needed to call yet so I can't comment on phone support.
Thank you very much Jeff for this very informative article. I will definitely use it.
A question: does one also need a cédula de extranjería in order to open a CHECKING account?
A cédula de extranjería (for foreigners) or cédula de ciudadanía (for Colombian citizens) is required to open any account at Colpatria or the other banks in Colombia.
By any chance would you know what Colpatria's ATM cash dispensing limits are?
Thanks
I believe the limit per ATM transaction is 600,000 pesos but you can do more than one ATM transaction. I've done two without a problem.
In Commercial Santafé and Oviedo the limit is 2 million at once (in one single withdrawal)
Great article - thanks! In Canada, anyone can open accounts in Canadian dollars or US dollars or both in any of major banks. At least one large bank offers savings account in Euro. Do banks in Colombia offer accounts in foreign currencies?
Not to my knowledge do any of the banks in Colombia offer accounts in foreign currencies. There's not really that many foreigners living in Colombia so probably not much demand for such a service.
Thanks for the article, Jeff.
Do you have any experience transferring money from a Colombian bank to a US account? I'll be leaving the country soon and need to transfer my pesos either to USD to carry with me (not ideal) or do a wire transfer (hopefully without losing too much in fees).
Sorry, no I don't have experience transferring money from a Colombian bank to a US account since I live in Colombia full time. But I suspect you would likely get a better exchange rate with a wire transfer compared to exchanging the money here in Colombia using cash - pesos to USD. I recommend stopping by one of the bank branches to ask.
Hi Jeff, Very good article about the banks. One question I have is the government of Colombia insure the bank accounts up to a certain amount, like the FDIC does here in the USA? thanks.
Regards,
Monte
Hi Monte,
I am not aware of there being something like FDIC in Colombia. But I wouldn't put much faith in FDIC in the US during a banking crisis with the small reserve they have.
I would recommend using one of the largest banks in Colombia - not one of the small ones. I understand the six largest banks in Colombia are Bancolombia, Banco de Bogotá, Davivienda, BBVA, Banco de Occidente and Colpatria. You'll find branches of each of these banks in all the major cities in Colombia.
Bancolombia is the largest bank in Colombia and the company is publicly traded in the US and Colombia. I know many expats use Bancolombia but I personally wouldn't recommend Bancolombia as they charge fees plus have lower interest rates than other banks. BBVA is another large multinational bank that is publicly traded. Colpatria is reportedly the fifth or sixth largest bank in Colombia plus they are majority owned by Scotiabank, which is the third largest bank in Canada that is publicly traded, to me this makes them safe.
Hi Jeff . Great article but i went to a Colpatria today + she told me i have to wait 6 months after opening one to transfer money from outside of Colombia .
Interesting. They didn't tell me when I opened my Colpatria account the need to wait 6 months to transfer money from outside Colombia. But I didn't ask about wire transfers when I opened the account as I wasn't planning to do one until later.
Several months after opening my account I talked to the branch manager about the process to do a wire transfer and the manager never told that I needed to have the account open 6 months. I checked online and I did my first wire transfer after having my account open for 5 months.
Comparing the interest rates without comparing the inflation rates is a bit unfair.
Colombia inflation rate is projected at 6% to 8% in the next five years. In the USA the Feds are having trouble getting the inflation rate above 1% - the target is 2%.
The issue of exchange rates is another hairball.