Bank of America and China Construction Bank, or No-Fee USD Withdrawls in China
My personal favorite transpacific investment tie-up is one that made a frustrating and expensive process free, if not easy. Bank of America has an 8.2 percent stake in China Construction Bank (jiàn háng), a major institution that went public in 2005. I don’t claim to understand the implications of this investment between huge banks, but I know one thing: It lets me move USD into RMB with no ATM fees, no exchange rate adjuncts, and generally few headaches.
By way of news, The Financial Times reports that BoA is increasing its stake to more than 10 percent, but I thought it might be useful for readers coming from the United States to China to know about this trick.
Many international travelers are familiar with the pain of double-barrel ATM fees — one from the machine that gives you money, and one from a U.S. bank penalizing you for using someone else’s terminal. Worse yet is the percentage of the withdrawl charged as an “exchange rate adjunct.” Before I discovered the BoA-CCB deal I was losing almost 7 percent on my USD withdrawls in China.
Now, I withdraw money from a BoA checking account with the debit card I received in the United States with no fees whatsoever: It transfers at market rate from USD to RMB and gives me cash.
There was one hurdle, however. Money in my life this year is deposited in Colorado. People in the U.S. needing to pay me send a check to my family, who generously go to the bank to make the deposit. But there are no BoA branches in Colorado.
BoA has one more service that completes my money circuit. Once you associate a U.S. account with a BoA account, incoming transfers from the other bank can be done on a one- or three-day basis with no fees. So if you think I need to be richer in China, I’ll send you the address in Colorado, my family will make a deposit into a locally available bank, I’ll transfer it free to BoA, and CCB ATMs throughout China (and Hong Kong) will allow me to withdraw that money with no charges.
do you mean you can get RMB from your BOA card anywhere in China as long as you can access a ATM of CCB in china without any extra fee?
1% fee is always there
foreign currency conversion fee
even at Bank of America
Thanks for the illuminating post. Do you happen to know if your BofA branch in the US is part of the pilot program for free wire transfers? My local branch here in Cambridge, MA was unaware that accounts could be linked and that free wire transfers between BofA and CCB were available. One web report notes that only accounts with branches in the Northern California were eligible for this service. Thanks!