Colombia: A banker's paradise

For the second time in a number of months here in Colombia we found ourselves snookered as to what to do with our cash. 

OK, it could be seen as a pleasant headache to have – better looking at it than for it, in a sense. The issue, though, on both occasions was that without a bank account, where do we put the cash we’ve (finally) built up over our time freelance English teaching in the country when we go travelling?

Safe haven: cash under the bed.

You see, it’s not a problem when we stay in Bogotá. We just keep it tucked away in safekeeping, accessing it when we need to. 

But going on the road with a relatively nice bit of "real money" – enough, in any case, that we certainly don’t want to lose – is not the brightest idea around these parts, or anywhere for that matter. It would be bringing ‘dar papaya’ to new levels of stupidity (see http://bit.ly/XLDyLg for an explanation of that).

Due to our visa situation and a lack of the foreigners’ version of the national identity card (a cédula extranjería as it’s known – it took Colombia immigration almost six months to get us one of those issued, getting it just six days before it actually expired) we couldn’t open a bank account back in January.

Our three-pronged cash solution for our travels back then was thus: we brought more than maybe advisable with us; we left some behind and; in an extremely generous gesture, a friend of ours gave us her bank card to use for the duration of the trip (cheers, Melissa) – so we put the remainder of our cash into that account as cover.

Now, all that worked out quite well in the end, but we didn’t feel fully in control of the situation. So for our latest voyage, one where we had to pop into neighbouring Venezuela for visa purposes,* we tried again to open a Colombian bank account. 

The game changer this time was that we had our cédula – the lack of it beforehand was the only obstacle preventing us doing business with Davivienda (the other banks, for the record, needed written proof of income, something Davivienda did not).

So cash and national identity card in hand, we go to open what they call a savings account – after all, all we wanted was somewhere to "securely" store our money while also having the ability to access it at some stage if needs be.

Standing tall('ish') - Davivienda.

‘Right, what kind of benefits do we get?’ ‘Benefits? Well, you can use the debit card to withdraw your cash at any Davivienda ATM in the country (but use another bank’s machine and you’ll be nicely charged) – get this, free of charge!’ 

‘Wow! Tell us more.’ 

‘You can also make point-of-sale and internet transactions with your card without incurring a charge from us.’ 

‘Great. What about the interest rate?’ 

‘Well that’s minimal, less than one per cent.’ 

‘Ah, that’s OK, it’s better than zero – at least our money will make something.’ 

‘Well, you are, of course, charged $9,300 Colombian pesos (COP officially – roughly US$5) per month to have this account.’ 

‘Hold on, what? We leave our money with you, money you use to invest to make more and you charge us for our "generosity"? How can you do that?’ 

‘Bienvenidos to the banking world of Colombia.’

Yep, we get charged for letting the bank play around with our money. Indeed, if the interest rate was one per cent (it’s less) we’d need to leave a minimum of ten million pesos (about US$5,000) just to break even – that's if the interest was calculated monthly, which it’s not. 

This isn’t just Davivienda (a company where we, incidentally, teach many of its high-rolling staff) we must add – it applies to all the banks; Colombian law apparently.

In fact, it seems to be a cosy cartel between the banks and the country’s lawmakers – nobody seems willing or, more importantly, legally allowed to break ranks. From what we’ve been told, even the international banks play the same game. The likes of HSBC and Citi must love things here – easy money and all that.

We don’t make any secret of the fact that we’ve never been big fans of banks, wherever in the world, but the above practices are just plain wrong. 

How the ordinary Colombian can accept it is beyond us. And, of course, it is the working- and lower-middle-class Colombians that are most affected by it. The lower classes tend not to have bank accounts – they’ve enough problems without them – while the upper-middle and upper classes either don’t really care about such charges or, perhaps more likely, have their wealth elsewhere.

A popular protest, just not about the banks, though.

At least in the other two countries we’ve banked in – namely the Republic of Ireland and the UK – we don’t get charged just for leaving our money with them. The balance we’ve left in our UK bank account – the current account that is – hasn’t budged since we departed, only for the small sums of cash we’ve taken out.

What’s more, our instant-access savings account, where we can transfer funds from this to our current account in seconds via the internet, is making money for us – not a lot, but at least it’s moving in a positive direction. It’s more or less the same in the Republic of Ireland.

Yes, "proper" savings accounts do exist in Colombia, but from what we can gather they are highly restrictive and not very practical for the average worker. So with seemingly little or no public or political pressure to change their ways, why would the banks do so?

They are on a nice little winner here. After all, it is a banker's paradise.
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*We’ll have more on what turned out to be a very positive, highly enjoyable trip to Venezuela in the coming days.