Banking in Costa Rica – Murphy’s Law at its best…

Thursday the 31st July 2008 was ‘one of those days’ which you might get a kick out of – Although I was ready to murder someone… Slowly.

Having just sold a home I own in Santa Ana (1), I left the house on Thursday at about 11am to deposit a not insignificant cashier’s cheque in my bank account.

As part of our negotiation process, I had agreed that the buyer could assume my mortgage at the bank which saves him 1.5% per annum with his rate of mortgage interest, and he had paid me the difference between the outstanding mortgage and the asking price by cheque.

I dashed off to BAC San Jose in Santa Ana which was packed full of people (please note that pay day is not a good day to visit any bank) and after waiting 30 minutes, decided to drive up to BAC San Jose in the big MultiPlaza shopping mall in Escazu since there was something I had to pick up there anyway.

The bank in MultiPlaza was busier than Santa Ana and the security guard said that there would at least a 45 minute wait so in desperation, I called my private banker who told me that it might be better to use the AutoBanco – where you drive up, speak to the cashier via a video monitor and insert your deposit into a tube which ‘whooshes’ into the cashier for deposit.

The AutoBanco has limits on the type and size of transactions that can be performed but after already waiting around too long…

I inserted the cheque into the capsule, closed the lid, pushed the ‘Send’ button and there was half a whoosh, then a phut… Nobody at the end said anything so I assumed that everything was fine…

About two minutes later when I was wondering to myself why they still had not sent back the deposit slip, the cashier asked me to hit the ‘Send’ button again. I asked why and of course as non-confrontational as the Ticos are, he could not simply admit that: “It didn’t work..,” he had to tell me there had been ‘complicaciones.’

The cashier’s cheque had somehow become stuck in their tube system, they then informed me that it would take at least two hours for the ‘tecnico‘ – their technician – to arrive and assured me that I should go home and that they would call me as soon as they extracted and deposited the cheque.

F-I-V-E….. V-E-R-Y….. L-O-N-G….. H-O-U-R-S….. later, the bank supervisor called to inform me that they had finally recovered the cheque and deposited it.

Needless to say I was somewhat irate because without the cheque being credited to my account that afternoon, we could not close on the home the following morning but thankfully – even though Murphy’s Law was hard at work for me that day – all was well in the end.

Ah! And when you make money selling your home, what percentage of your profits are you expected to pay in taxes to the Costa Rica tax man?

0% – Nada! – Zip! – Zero! – I love this place …

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You And Your Costa Rica Bank?

Over the past few years, we have seen many acquisitions in the banking industry, and although I had been hoping that the professional banking services in Costa Rica would improve dramatically, which they need to, from what I can see, this has not happened.

In fact, with increased regulations and more red tape imposed from outside the country and from within, opening a new account – even in a bank where you already have multiple accounts – takes longer than ever.

Even though I love this country and the people in it, we should remember that Costa Rica is still a small, developing Central American country and if you own real estate here, you probably already have quite enough of your net worth invested in Costa Rica without keeping all your cash in a local bank as well.

I am not for a second suggesting that your money is at risk in a Costa Rica bank, however I advise my investment clients to keep six months worth of cash living expenses inside Costa Rica, the rest is to be safely invested ‘offshore’ in Switzerland, Hong Kong, Bermuda or Cayman (although none of them want to open accounts for Americans any more) or some other secure jurisdiction.

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Written by Scott Oliver, author of How To Buy Costa Rica Real Estate Without Losing Your Camisa and Costa Rica’s Guide To Making Money Offshore.

If you would care to share your Costa Rica Bank recommendation with out VIP Members, please do so here in our Discussion Forum.

Andrew Makarik

to@welovecostarica.com

Andrew Makarik is the main editor of WeLoveCostaRica, a fan of this sunny country. He is also a loving husband and a has a lovely daughter. By being a devoted family man and the biggest Costa Rica fan, he wants to make more people feel at home there. WeLoveCostaRica unites people and helps them find new home or a new travel destination. This website is a friendly community where everyone can find not only information, but also new friends and travel pals. Andrew is also passionate about IT and programming, so he himself maintains a friendly atmosphere in this cozy environment of WeLoveCostaRica.com.