It is a question many an expat has asked when moving to a new country. Do I have to open a new bank account or can I somehow manage with the one I have in my home country?

To some extent, the answer will depend on how you receive your income. Some multinational companies pay their employees entirely in their home countries, some companies pay everything in the host country’s currency, and some allow you to divide up your income between both according to an agreed-upon ratio.

Do I need a South African bank account?

Theoretically, you could get by as an expat in South Africa without opening a local bank account. You would save yourself the rather steep banking fees and the hassle of opening – and eventually closing again – a local account. The additional fees and exchange rate penalties you might incur when withdrawing money via your credit or debit card would probably be covered by the savings you realize from not paying any monthly account fees.

However, this would not be very practical for three reasons.

Firstly, South Africa – and other parts of Africa even more so – is still much more cash-based than many Western countries, particularly the United States. Where you can get by for months just using your credit card and never even touch a coin in the U.S., you will encounter a lot more situations in South Africa where cash is needed. A local bank account, allowing you to withdraw cash without any fees, is a convenient source for cash.

Secondly, having a local account allows you withdraw small amounts frequently. With only a credit card as a source for cash you might be tempted to withdraw bigger amounts to save yourself the transaction fees. But in a country where crime, often fueled by the vast divide in wealth, is still very much a problem, you do not want to walk around with large wads of cash on you.

Thirdly, and this is probably the most compelling reason why you should open a local bank account, South Africans conduct their business almost entirely via electronic banking. “Make your payment via EFT [Electronic Funds Transfer] and we will deliver your gas bottles,” a contractor might tell you over the phone. You will pay your gardener, your domestic worker, the kids’ school fees, deposit for next month’s safari, and the flute lessons for your daughter all via EFT. Whatever is not paid in cash will most likely be paid by logging into your bank account and triggering a payment by inputting the vendor’s banking details. Credit cards exist but are more sparingly used, partly due to the fees vendors have to pay to the credit card companies (especially American Express) and also due to the high incidence of credit card fraud.

Another advantage of opening a bank account in South Africa is of a more indirect nature. Anybody who has ever been an expat in South Africa (and many South Africans as well) will moan at the memory of simple bureaucratic errands-turned-nightmare due to all sorts of problems such as missing documents. Yes, opening a bank account will be your first of such time-consuming forays into South Africa’s morass of paperwork, but once you’ve passed that hurdle, everything else will become easier. Obtaining a cellphone contract, for instance, is next to impossible without providing a bank statement testifying to your income.

Which bank should I pick?

The second question you might ask, once you’ve decided to open a bank account, is which bank to pick. Here, it pays to do some research. The four largest traditional banks in South Africa are:

• ABSA
• FNB
• Standard Bank
• Nedbank

Their offerings are all similar and, it is safe to say, none of them are known for their customer service. Especially when comparing them to your home country, the fees will strike you as steep and often unreasonable (i.e. being charged a fee for making a deposit into your own account). When deciding between those four banks, it's a good idea to pick one that has a branch fairly close to your home and ATMs in places that are safe and that you frequent often, like your closest shopping center.

If you’re looking for better customer service, you might pick a more nontraditional banking service such as Investec http://www.investec.co.za. They don’t have any retail branches, but they are known for good customer service including delivering foreign currency to your residence, and their monthly charges are more reasonable.

Which documents do I need to open an account?

Opening a bank account in South Africa is best done in person. Make sure you plan some time for this as soon as you arrive in South Africa. You will receive an application form to fill out and you will have to submit numerous documents to be copied. Recommended documents:

• Proof of Identity (passport, including visa/work permit page)
• Proof of Residency (like a utility bill, but if you have just taken up residence a copy of your lease agreement is best)
• Application Form
• Bank draft in ZAR (South African Rand) to put a starting balance into your account
• Reference Letter from your existing bank attesting to your standing (preferable)
• Letter from your employer stating your monthly income

You might not need each and every one of these documents, but in South Africa it’s always a good idea to cover all your bases in this respect, as on some days you might be asked for different things than on others. It might still take a few days for everything to be processed and your debit and credit cards to be issued, so a second trip might be necessary. Picking a bank with a branch close to your home or place of work makes this more convenient.

What else should I be aware of regarding banking transactions?

While you're there to open the account, make sure you also get someone to help you set-up internet banking. As mentioned before, both businesses and individuals rely heavily on EFT as a means of payment and getting that set-up and the correct passwords entered can be a bit complicated. In addition, make sure you enter everybody as account owner who will have to make banking transactions. In South Africa, being “only the spouse” will often come to haunt you when conducting business so it is vital to set up your status correctly from the beginning. And finally, be careful that everyone’s names are spelled correctly. Having something as simple as an automated cable TV payment deducted may fail over a mere spelling inconsistency, and you will curse your lack of foresight in this respect when your TV screen goes dark just as your favorite football team is about to score.

One last note: If you carry foreign currency with you - hang on to them. Trying to convert them and deposit into your bank will involve a lot of time and paperwork and horrendous fees, so you’re much better served keeping them handy for your next trip if possible. You may be able to use them elsewhere in Africa. For example, to avoid paying horrendous fees for entry visas and such.

All in all, setting up a South African bank account may seem a hassle compared to some other countries you've lived in, but it will be well worth it to have one.

By Sine Thieme, an American repat just returned from a three-year assignment in Johannesburg with her husband an four children, where she loved the weather, the people, going on safari, and the fact that you never quite knew when exactly 'just now' would be.