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Chile - Banking
Money Denominations In Chile
Chilean money is divided into notes and coins. CLP notes are available in various denominations including 20,000, 10,000, 5,000, 2,000 and 1,000 notes. CLP coins are issued in denominations of 500, 100, 50, 10, 5, and 1 pesos. The 500 coin was established after the high inflation rate of the 90s.
In local slang, the 1000 note is known as the luca. 100 pesos are known as gamba, while the 500-peso coin is known as quina. Knowing these terms will come in handy, especially when buying items on the street.
Banking In Chile
Banco Central de Chile is central bank of Chile. It dictates and controls the monetary policies carried out by all Chilean banks and financial institutions. Both local and international banks are concentrated in the major cities such as Santiago.
Other banks in Chile include Banco Estado, Santader Chile, Corp Banca, BCO, Scotabank, BBVA Chile and Banco de Chile. Many of these local banks also offer international financial services, especially to expats. International banks with branches in Chile include Banco do Brasil, Rabobank Chile, Banco de la Nacion Argentina, the Bank of Tokyo-Mistubishi and JP Morgan Chase bank. You can also find international online banks like TBA under the BCI bank.
All banks open from 9am to 2pm on weekdays. Some banks may extend their banking hours to 4pm, but only with special permission from the central bank. No bank is open during public holidays and on the 31st of December. However, ATMs can be accessed 24/7 and they are available in the big cities and in the rural towns.
Expat Bank Accounts
Unfortunately, banking policies in Chile discourage expats from opening local accounts. Where this is possible, the vetting process is very strict, and applications submitted can take a long time to approve. Migrants needing to use banking services while in Chile have other options to consider.
Expats require a Chilean residency card to open a local bank account. Passports are not allowed as a form of identification when opening an account. In addition, expats are required to have a tax number or RUT, which will also be their ID number.
A tax number is applied for separately from the residency card. You will be required to submit a F4415 tax admin form, together with proof of Chilean income. You may also be asked to make a minimum deposit to a local bank account pending the approval process. Lastly, only expats who have stayed in the country for at least two years can open accounts with local banks.
Banking Options For New Expats
Migrants still wishing to open local bank accounts have two options. They can open an RUT account or a fondos mutuos account. Both function as savings accounts, but differ in the privileges they offer.
An RUT account is a savings account that can also be used as a current account. Banco Estado is the official financial institution which provides RUT accounts for expats. Once the account is activated, the account owner is issued with an ATM card. You can use the card to make payments locally, check your account balance or make money transfers.
The maximum balance a migrant can have on an RUT account is CLP$3,000,000. The deposit limit for the same account is CLP$2,000,000 per month. The maximum withdrawal you can make at an ATM is CLP$200,000. Bear in mind that withdrawing large amounts using your ATM card will attract a commission of CLP$300 per transaction. You can avoid these high charges by withdrawing over the counter; this option also has the benefit of unlimited withdrawals.
A fondos mutuos account is a fixed savings account. The interest rate is static, and you can only withdraw from the account once the investment term matures. It is possible to withdraw before the maturity date; however, this will attract high penalties.
Migrants who do not wish to open a fondos mutuos or RUT account can ask their employers to pay them via an international account. This international account is usually one you hold in your home country. It is important to notify your bank that you will be using your account and all credit and debit cards while working in Chile. In addition, find out if you will be charged exorbitantly for international wire transfers. If so, then a last resort is being paid in cash.
Spending Money In Chile
Expats living in Chile should always opt to pay in cash, especially when visiting local shops. ATM cards can be used as debit cards to pay for transport, mobile phone charges or goods at a local store. Banker’s checks can also be used, though they must come from a Chilean bank. International checks can only be processed in their respective banks, while travelers’ checks have a poor exchange rate while in the country. Only consider bank checks as a last resort when making payments.
Foreigners looking to change currency can do so in exchange bureaus. There are plenty of exchange bureaus within the major cities with attractive rates. Interestingly, you will get the best rates if you change your money in a local bank.
International money transfer services are available in Chile. You can send money abroad via Western Union, Oanda, AFEX or Chile Express. AFEC and Chile Express are the most widely used services in the county. Note that exchange bureaus and banks only consider EUR, USD, and GBP as exchangeable currencies. Any other foreign currency will have to be changed in either of the three then finally converted to local currency.
As a rule of thumb, only exchange money when it is absolutely necessary. You will be happy to know that the US dollar is widely accepted as a mode of payment in many places in Chile. If you are traveling with less than US$10,000, changing money may not be necessary.
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