Hong Kong - Banking System

Important Information about Cheques
Writing a chequeis a little different in Hong Kong. If you are writing a cheque to just one person, you must put two lines across the upper left hand corner or two short lines vertically through the center of the cheque. If you do not, then the cheque can be cashed by “the bearer” of the cheque, even if there is a different name is on the cheque. While this provides you with the security of having the cheque go to the correct person, it makes cashing the cheque more difficult. If a cheque is crossed, you cannot get money for the cheque immediately. It must be deposited into the receiver's account and the money will be available the next day. If the cheque is not crossed, it can be cashed at the branch where the account was set up (which will be shown at the top of the check.) You must go  to the correct branch of the bank to get the cheque cashed. For example, if I set up my account with HSBC in Happy Valley and I wrote Jane Doe an uncrossed cheque, she could not go and cash it at the HSBC in Wan Chai. She would have to go to Happy Valley. Or she would have to deposit it in her account and wait until the cheque cleared in order to get the money.

Businesses will want a crossed cheque. You can have crossed cheques printed when you open your account, or you can put the crosses on yourself.

When writing a cheque you must make the cheque out exactly in the name of the business or person. If you write a cheque to “Mike Smith” and his real name is Michael Smith, he will have trouble cashing the cheque or not be able to cash it at all. If a business is “The Jumping Jamboree Incorporated Ltd.” then you must have all five words! This is very, very important when writing cheques.

Opening a bank account   

To open a bank account at Citibank
You will need to bring a passport and a second form of ID (such as a credit card or driver’s licence). If you are applying for a credit card, you will need proof of income or a Reference letter from your old bank verifying that you are a good customer. 

Citibank allows you to open an account with just HK $3,000. I was told by an employee that the bank is flexible with new accounts and you can actually open an account with nothing in it, and then quickly have money sent by a wire transfer to your account. To receive a wire transfer is free. The money will be available in just 2-3 days.  If you bring a US dollar cheque it will take a few weeks to clear and there will be a charge attached. If you bring Citibank Travellers Cheques there is no charge to accept them, but they may take some time  to clear. If you are depositing cash in a foreign currency, there is a 0.25% charge. Depending on if you are putting the money into a same currency account or a HK dollar currency account, the fee may be waived if your money is in US dollars and you deposit less than USD $3,000.

If you bring money over to have it exchanged for HK dollars, there is a HK $50 fee if you do not have an account with Citibank.

I was warned that since they are an American firm a US citizen can NOT open an investment account with them. All other accounts are fine.

Citibank offers savings, cheque-ing, passbooks, and multi-currency accounts. When you apply for an account, tell the person helping you what your needs are so they can help you find an account that will suit you best. Be aware that the charges you will have to pay on an account depend on how much money you generally have in the account. Ask about the charges you can expect to pay on your account or for services you will use regularly.  

The ATM service available is through Citibank or Jetco ATMs. They are a little less plentiful than HSBC ATMs. 

Insurance can be purchased through Citibank, although they do not have third party risk insurance that you need for driving a car.

Please note that all the fees quoted here can change at any time, so be sure to find out from the bank what their fees will be.

Citibank offers phone banking and internet banking. To find out more about Citibank, call the 24 hour phone line at + 852 2860 0222 or visit their website at: www.citibank.com.hk

Setting up a Bank Account at HSBC
HSBC offers Hong Kong dollar savings accounts, multi-currency accounts, passbook accounts, Powervantage checking and saving accounts, and others. You can go to any branch to set up your account. You should explain to the person helping you what you need from an account, whether it’s savings only, cheque-ing only, both savings and checking, multi-currency, etc. A representative will be able to point out the benefits of their many accounts and which one would be best for you.

Bring a passport and a Reference letter or Employment Contract. A Reference Letter would be from your current bank stating what your relationship with them has been (such as you have banked with them for 10 years and are not a risky client.) The Employment Contract would be from your employer showing how much you are earning and that you are certified to work in Hong Kong. This is to secure that if you have a credit card account, you will not be a liability to the bank but will be able to pay off the card.

The best way to put money into an account is to transfer it by wire transfer or telegraphic transfer (referred to as a T.T.)  You will have to place instructions with your current bank to transfer the money to this new account in Hong Kong.  It usually takes about two days for a T.T. to be confirmed so that you can access your account. The bank charges HK$50 to receive a T.T. 

If you bring money over with a demand draft, it will take about one month before those funds would be available to you.

If you are depositing cash into your account, HSBC charges 0.25% of the deposit if you are depositing foreign currency, if the amount is over USD $1,000. Therefore, if you were depositing USD $2,000 it would be better to put the money in in three installments so you can avoid this charge.

If you bring US dollars and change it into HK dollars, you will receive the bank exchange rate.  As long as you have an account with HSBC there is no fee to change money. If you do not have an account with them, there is a HK$50 fee. 

Travellers cheques may take time to exchange as well. If you bring travellers cheques, the bank charges 0.35% of the amount to exchange them, and it may take up to two weeks before that money is available to you. There is usually a minimum amount required to start an account. For the PowerVantage account it is HKD $10,000.  Most other accounts are less. Be aware that the charges you will have to pay on an account depend on how much money you generally have in the account.  Ask about the charges you can expect to pay on your account or for services you will use regularly.   HSBC is a fantastic bank because it is large, solid, has ATMs and branches all over Hong Kong and in every MTR station, has multi-currencies available for when you travel, and provides many other services. However, some people complain that there are a lot of bank charges. 

HSBC provides easy phone banking and internet banking. The ATMs that can be used free of charge are through HSBC or Hang Seng Bank. 

Insurance is offered through HSBC.  Third party risk insurance for buying a car can be purchased here.

Please note that all the fees quoted here can change at any time, so be sure to find out from the bank what their fees will be.

For more information on HSBC, call their 24 hour hotline at + 852 2748 3322 or visit their website at:  www.hsbc.com.hk

Cash
When coming to Hong Kong it is best to bring some cash that can be exchanged at the airport to get you started, but the majority of your exchanges should be through an ATM. You will be charged a service fee from your bank, but you will get a better exchange rate. ATMs are plentiful in Hong Kong. HSBC ATMs will accept Global Access, Mastercard, Visa, Cirrus Mondex, Plus system, and Mondex. You can pay for most things with a credit card—such as hotels, restaurants, groceries, clothing in stores (not the markets), the movies, etc. You will need cash for public transportation.

Important Information about Interest Earned
In Hong Kong there is no tax on interest earned. You may want to take advantage of this benefit.

Cash Flow Problems
You will have cash flow problems unless you wire money to a new account or bring cash. It takes time for cheques of any sort to clear. 

Closing a Bank Account  
In order to close a bank account you simply need to return all cards associated with the account, all cheque books, and all pass books. Be sure to leave enough money in the account to cover all outstanding debts. When I closed my account, I left instructions for the bank to leave my account open for a month (to help clear any outstanding debts) and then mail me a cashier's cheque to my new home. 

Currency  
You will get a slightly better exchange rate at a bank versus the airport. Banks will not charge you to exchange money if you are one of their customers (although you still only  get the bank rate.) 

If you have an ATM card that will work overseas, I would use it when you get to Hong Kong.  Withdraw what you think you will need so you get the best rate and only have to pay the service fee once. This is your best bet. There will be ATMs at the airport once you have passed Immigration and are out in the main hall. Try your ATM card there.  If it doesn’t work, you can always change cash or travellers cheques at the airport. Travellers cheques get a lower rate than cash and are hard to cash at banks. If you need to cash travellers cheques, go to Thomas Cook. There is one at the airport, but you will get a lower rate there. 

• Thomas Cook
  Wing On Central Bld
  10/F  26 Des Voeux Road
  Hong Kong
  China SAR
  Tel: + 852 3196 5555 to find a Thomas Cook near you.     

You will be able to pay for a multitude of things on a credit card. Restaurants, hotels, general shopping (although markets won’t accept them), grocery stores, etc.

ATM-Automated Teller Machine  
ATM's can be found at banks, MTR (metro) stations, and elsewhere around town. There is usually a fee to use a machine if you don't have an account with that bank. Most machines support visa, plus system, cirrus, globalaccess, and a few others.

Exchange Money   
For the most favorable rates, it depends on your situation.
Banks will provide good exchange rates, but will usually charge you a changing fee (often fixed, not a percent of your exchange) if you are not a customer.
ATMS are an excellent way of getting cash, but you should check with your home bank to see what charges they will levy for using an overseas ATM. 
Hong Kong is seems to run on charge cards and they are accepted almost everywhere, so it may be wiser to charge everything until you have a bank account set up.
You can change money at the airport exchange booth for some cash before entering Hong Kong, but the rates are not as good there.

Identitytheft  
If you have called a company, there is nothing wrong with giving your credit card number out over the phone. Just be sure you are talking to the real company. It is also fine to use your credit card over the internet as long as you are on a secured site.
It is NOT wise to send your credit card information via e-mail as that is not a secure source.
It is fine to fax your card and signature to legitimate companies to get services paid for over the phone. 
Do not give your pin number to anyone.  Do not write your pin number on your debit card or in your wallet.
If your wallet is stolen, immediately cancel your credit cards with your bank and inform the police. You must report your Hong Kong ID card as stolen immediately and get a new one. 
For on-line bank accounts, do not keep the password in your wallet or in any visible place.  Do not leave the password taped to the computer.  Choose a password made up of letters and numbers, and don't choose a password that is easy to guess, such as your birthdate, spouses name, etc.
Identity theft is not a big issue for foreigners in Hong Kong as we don't look like the locals.