Transferring money back home

Quite a while back, I mentioned that I was looking for an effective way to save money for retirement since French savings account only offer peanuts in interest and getting a French assurance vie policy equals mega headaches for US tax declarations. (If you're looking for more information on why you shouldn't get ever sign up for an assurance vie, this article does a great job of explaining it here. As a side note, this also applies to investing any mutual fonds/stocks offered by your local bank).

So that doesn't leave a whole lot of options for Americans in France, and I started to look back to investing in the US.  I came across a group of Financial Advisors called Thun Financial, who are dedicated to helping expats abroad, and I have since watched several of their webinars.  While I have not hired them since the amount of money I have isn't nearly enough to be of interest to them, I have been able to get some good advice from their website and frequent free webinars (which is basically invest in the US in both US & World funds).

That means however figuring out how to conveniently and regularly get money back to the US in a cost-efficient manner.  Going through my bank means paying a wire transfer fee here, a wire reception fee there, plus getting a sometimes questionable exchange rate, so I definitely didn't want to do that on a regular basis.  I use XE.com (and their app) regularly for calculating exchange conversions, and I'd heard a lot of good things about them online regarding their money transfers, so I decided to give it a go last week.

The whole process was initially a bit confusing, despite their promises of "it's so easy to use!", so I thought I'd detail it here in case anyone else is looking to transfer money back home.

First of all, you have to sign up with XE, and there is a bit of information verification - including your home address, your French bank account, your home bank account, a photo ID, and a RIB or EDF bill.  Once that has all been approved, you can start your first transfer.  It starts by logging on to their Trade website, and completing a trade. You can either do an immediate trade, set up an automatic trade when the exchange rate reaches a certain rate, or you can set up a rate alert for the next seven days.

To do an immediate trade, you enter in the amount you would like to transfer, and then it gives you an immediate quote of how much money you will receive in the foreign currency.  If you're happy with that, you press "book trade", and you'll receive an email asking you to transfer the EUR amount to their French bank account, specifying your unique trade quote as the object of the transfer (be sure to select "EFT Trade" - it takes a day or two longer than a wire transfer, but it is the free option).  They will then transfer that same amount to their account in your home country, who will then do an internal transfer to your home account.  So as you can see, there's a few more steps involved, but in the end, it means you don't pay an international transfer fees on either end.  The rates they quote are also better than I've seen quotes at least by the BNP.

So voila - a little how-to on an inexpensive way to transfer money back to your home country!

La Banque Postale

By the time 4pm rolls around, I will have sat through 18 hours of class on "Contractual Obligations" in the past two days. This class, along with the French Economy class we had a few weeks ago, were two of the main courses I was really dreading.

But it actually didn't turn out to be that bad, mostly thanks to the professor.  I'd guess he was in his 70's, and he peppered his lecture with tons of interesting anecdotes, including one about how a Portguese woman was able to convince the Magistrates to rule in her favor to the tune of 1 million Francs thanks to a very low-cut, sexy red dress.  I have to say, older French men crack me up, especially when they've gotten to that age where they really don't care what they say anymore, nor who they say it to.

Another story that stuck out enough for me to make a note to blog about it was regarding La Poste.  I'm assuming there are at least a few of you out there who have bank accounts with La Poste, so I wanted to make sure to get the info out there.  French banks all have a legislative bank code that they have to adhere to, and it states that if someone steals your check book or your bank card, and makes fraudulent purchases with it, the bank has to reimburse you. Good deal, right?

It is unless you are with La Poste.  You see, it turns out that La Poste has their own legislative postal code that governs them, and when the laws were passed allowing La Poste to become a bank, they were really sneaky about it, and stuck it in at the end of a really long day - ie the legislators were still in session and voting at 1am.  So by that point, no one was really examining things very clearly, and they just passed the laws without looking too closely at them.  Which is how La Poste managed to have it written into the postal code that if you lose your checkbook or bank card and purchases are made, tough cookies for you.  Ie unlike the other banks, they have no legal obligation to reimburse you for fraudulent charges. Pretty scary, non?

Our professor learned this the hard way when his lawyers' association had their checkbook stolen out of their main office.  I had to laugh picturing all of those high-powered lawyers being out-lawyered by La Poste, and even he had to begrudgingly admit they'd been had.

The moral of the story is - with how much bank theft there is nowadays, it might be a good idea to avoid La Poste bank if you can....Or if you can't, at least think twice about taking out their supplementary bank insurance via Alliatys!

French savings

I'll post more about the big first day soon, but I wanted to put a quick note out there for those of you who have French savings accounts. On October 1, 2012, they upped the maximum deposit limit for the Livret A and the LDD.  The livret A max went from 15,300€ to 19,125€ and the LDD max went from 6,000€ to 12,000€.  My bank did not give me any notice of this at all, and in talking to friends, theirs didn't either, so I wanted to get the info out there.

These two have the highest interest rates when compared to most other livrets (and it's still a piddly 2.25%), but it's worth moving money around to reach the new plafonds if you've got it - extra interest is after all extra money!  Just be sure to do it before October 15th, since interest on French livrets is calculated only every 15 days - so if you put money in after October 16th, you won't earn interest on it until November 1.

*As an FYI, if you're looking for a savings account, these are two good options because 1) they are free to open, 2) you can move money in and out of them as needed at no cost and 3) you will not pay any income tax nor social charges on the interest earned.

**There is also another livret called the LEP available for those who paid less than 769€ in taxes last year, and it has a little higher interest rate of 2.75%.

***A little off-topic, but I learned recently from a friend that Americans should avoid opening French "assurance vie".  I'm not sure I understood it 100%, but it sounded like that with the new legislative changes in the US, you will be required to inform the US government as to the nature and provenance of the interest earned on your "assurance vie", as in listing out what exactly what you earned from each stock your assurance vie invests in. Apparently it is quite complicated to figure out, even for tax professionals, so her advice was "If you don't want to have to pay someone to do your US taxes, it's best to put your money elsewhere if you can". (Plus just to make it even more confusing, assurance vie is not the equivalent to the US life insurance anyways - it's more of a retirement savings account).