Thinking of Staying in South Africa for a While? Here’s Why Opening a Local Bank Account Is A Smart Move

If you plan to stay in South Africa for more than a few months, it’s wise to open a South African bank account. This will simplify receiving payments in Rand (ZAR), give you better daily financial control, and be essential if you decide in the future to buy a property in the country, and require a mortgage.

You will also find that many local companies and tradespeople prefer to receive payment via bank transfer (EFT- electronic transfer) and some will not accept foreign bank cards.

Major South African Banks

Standard Bank is one of the largest banks in Africa, Standard Bank offers a wide range of personal and business banking services. Their accounts include options with low fees and additional benefits like rewards programs. They also have a robust online banking platform and a large ATM network.

ABSA provides various banking products, including personal accounts, investment options, and loans. Their accounts cater to different needs, from basic options to premium accounts with added perks. ABSA is known for its customer service and digital banking features.

First National Bank (FNB) is recognised for its innovative banking solutions and user-friendly online banking services. They offer a variety of accounts, including basic accounts with low fees and premium accounts with more features. FNB also provides a range of financial tools and calculators to help customers manage their finances.

Nedbank is known for its focus on sustainability and community investment. They offer various personal banking solutions, including flexible account options and competitive interest rates. Nedbank also has strong online banking capabilities and a commitment to responsible banking practices.

Capitec Bank is a newer bank that has quickly gained popularity due to its straightforward approach and low fees. It primarily offers a simple, low-cost account with a user-friendly app. Capitec focuses on providing affordable banking services, making it an attractive option for many expats.

Visa Status and banking

Expats can open bank accounts in South Africa, but the type of account available to you will depend on your visa status. If you have a tourist visa, you’ll need to apply for a non-resident account. In contrast, those with temporary or permanent residency visas can open a resident account. However, if you have a non-resident account this can be upgraded once you have your visa.

Stay safe

While you can initially use your foreign bank card to withdraw cash and make purchases, this may not be practical for long-term stays. For one, there are safety concerns; losing your card or having it stolen could complicate recovering lost funds and obtaining a replacement from your overseas bank.

MasterCard and Visa cards are widely accepted, but American Express cards are less common.

Transaction fees for foreigners

Additionally, transactions made with a foreign card will incur conversion fees each time you use it, which can add up over time, and you may also be subject to fluctuations in the exchange rate. Many expats use a Revolut account which cuts out conversion fees and makes paying for goods and services by card cheaper, easier and avoids having to transfer your home currency into rand.

However, even with these accounts bank transfers will need to be done by international transfer which incurs fees from your bank and then the South African bank will also charge a minimum fee of R100 for receiving the funds.

Get a head start on your money management

If you want to get a head start before moving to South Africa, you can open a resident bank account while still in your home country. You will however need to have your application and documents signed by a lawyer or solicitor. 

There’s a wide range of bank accounts, from low-fee basic accounts to premium accounts tailored for those with higher monthly incomes. More expensive accounts typically come with additional benefits, such as a higher number of fee-free transactions and interest on balances.

Local bank branches are generally very busy and you are not guaranteed to find a staff member that is familiar with opening an account for an expat.

Contact Cape Relocators to discuss to your options in more depth, open a bank account with FNB or Investec before you arrive, or to discuss our other financial services.

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