Safety of bank deposits in Brazil

Hello nadfansince53,

While bank accounts in Brazil are "supposed to" be guaranteed by the Fundo Garantidor de Créditos - FGC it would probably be an extremely bureaucratic and time consuming process before you ever saw any of your money returned. Also the guaranteed amount is only R$250 thousand (about USD $65 thousand). Banco Rural SA went under some years ago and I have no idea if or when any of their account holders have had their deposits returned.

If you have a US bank account you'd do well to keep it, have things like Social Security and other pension payments deposited to that account and withdraw funds from ATMs here in Brazil. If you're wife has a Brazilian account you certainly don't need one. Also, as a result of the Foreign Accounts Tax Compliance Act a Brazilian bank is obligated to report all your account information directly to the IRS anyway, so you gain nothing by shifting your accounts and investments here. Actually with the US dollar the way it is, converting large amounts into Reais would not necessarily be to your advantage anyway especially if the Real rebounds.

You can withdraw somewhere around R$800 per day (maybe more depending on the bank) on weekdays and once on the weekend, you get the current exchange rate and only pay your bank's ATM fee. If you need larger sums you can always arrange to transfer from your bank to your wife's account, or if you're making a major transaction such as purchasing a home, direct to the seller and your bank has all that permanently recorded.

I wouldn't trust a Brazilian bank as far as I could throw the branch manager! I've never had a Brazilian account, haven't ever needed one in nearly 14 years. I use ATMs to withdraw from my US account and when I need to pay bills I deposit just enough to cover them and the monthly service charges to my Brazilian wife's bank account. Then I pay all the bills online or by automatic debit on her account. I would highly recommend that anyone who has a Brazilian spouse do exactly the same.

Cheers,
James    Expat-blog Experts Team

Thank You Very Much James for your Information to be noted.

If you are going to invest in Brazil, then the ATM route is not going to cut it.  For a normal day to day existence, you probably can get by with a minimum interaction with the Brazilian Banks.  Although personally, I would find that hassle a bit inconvenient.  I prefer to sit in my home, go on line, fill out a wire transfer request and have my funds deposited in my Brazilian bank.  Then there is the personal safety issue.  The author is well aware of what happens when you exit a bank in Brazil with cash in your pocket.
I am building a small apartment building, recently I made a R$50,000 purchase of windows and doors, the purchase was an opportunity that I exploited because I already had the funds deposited in Brazil.  Since my wife and I are managing our own project, the option of running to the bank whenever we needed to purchase cement, rebar, blocks or to pay the workers would be an unworkable option.  Some of the people supplying sand, blocks and gravel wanted to be paid in cash.  I stopped doing business with them, even though their prices were very competitive because I did not want my wife leaving the bank with R$5000 in her purse.
Depending on how far you want to spread your wings in Brazil, you may find that standing in a crowded Brazilian bank, waiting in the ATM line, in order to do your ATM to deposit envelope, then back to the deposit line-either at the teller window or at the ATM deposit machine-is taking up too much of your time.  Not all banks are inefficient Brazilian banks.  There is Citi Bank, however with a small foot print your ATM options will be very limited.
Brazilian banks are incompetent, expensive, bureaucratic and extremely hostile.  Their level of customer service will remind you of  Uriah Heep.  If you transfer more than US $10K you can expect to wait up to ten weeks before your funds are deposited.  You will have to go to the bank each time to sign reams of forms.  This will definitely take some getting used to.     
However, I do not share the author's dire opinion of Brazilian banks.  The Brazilian Banking Regulations are more restrictive and effective than those in the USA.  There is a wall separating high risk stock market brokerage activities and secure customer deposits.  In short, they are not allowed to gamble with your deposits like American banks.  The evidence is quite clear.  During the 1987 worldwide financial crisis, several US banks went under.  Many of them were on life support, including my own credit union. Almost all of them required federal bailout funds.  The Brazilian banks survived without heavy losses.
In the end, you will have to evaluate your own acceptable level of exposure to financial losses.  Getting robbed in the street or getting robbed by the banks.

Hello Ouidah,

There always is a happy medium between two extremes in anything, and banks are no different.

Clearly, withdrawing large sums of cash from a bank account anywhere in Brazil borders on insanity. It is simply too risky and totally unnecessary. Any large transaction should always be paid for by direct transfer between accounts, or by cashier's check (cheque administrativo). Smaller transactions should be paid by debit or credit card.

There is absolutely no security inside a bank, any transactions that you make you are making them in full view of anyone who wishes to separate you from your cash even if that means taking your life in order to do so. While some banks are installing partitions between teller's windows, those are few and far between.

That said, the amount that is insured on accounts in Brazil is really insignificant, and to collect it should your bank go under could take years as clients of Rural Bank are finding out.

Regardless of the cost and bureaucracy involved in keeping your accounts at home, where your money is safe, and transferring what you need to Brazil as you need it are well worth the effort. After all you have to declare that money if you're bringing it into Brazil anyway, so what's the difference.

Nobody is saying that you SHOULDN'T have a Brazilian bank account, what I'm just saying is that if you do, you should limit the balance you keep in it to the minimum you require at any given time. Also you should know that there are ways around actually having your own Brazilian account. If you're married to a Brazilian you can be added as a joint account holder, or just use your spouse's account as you would if it were your own. I do all may banking online with my foreign account and online transactions on my wife's Brazilian accounts. Between the two, I have absolutely no need for my own Brazilian account and don't miss one in the least.

Cheers,
James   Expat-blog Experts Team

You can definatley draw out more than R$800 per day in more than one draw
I have drawn R$800 from my foreign account and then draw another R$800 staight away
as long as your foreign cards limit is set high

Oh yes, and another reason not to trust Brazilian banks with your money... and most expats don't know about this at all.

In March 1990, the government of then President Fernando Collor de Mello confiscated the savings accounts of everyone in Brazil. To this day those people have not seen all of their money returned, in fact, they received only pennies on the dollar. If you know any Brazilians who suffered through this dark era if their lives were ever the same again.

There is absolutely no guarantee that this could not happen again, and there are even rumors circulating that it is something that the current government may try again. Just remember if it does happen, they can't get there hands on what isn't in a bank account here in Brazil. Just some food for thought.

Cheers,
James   Expat-blog Experts Team

I was in the States when Collor froze the accounts.  I arrived a couple of days later at Guarulhos Airport, which was empty...dead!  Most flights had been cancelled. No money, no passengers, no flights.  I ended up waiting until late that afternoon before VARIG managed to gather enough people together for a flight to Goiania, Brasilia, Salvador and Recife. 

A young Canadian woman who had arrived on the same flight as me out of Dallas couldn't get any money.  I think she was trying to cash traveler's checks and  I don't think ATMs back then accepted international bank cards.   At any rate, she was also going to Goiania  to meet up with her boyfriend.   Luckily, I had a wad of BR money so she and I sat up in the airport restaurant ate, drank beer and watched airplanes sitting on the tarmac.   I put a call through to her boyfriend and she was able to fill him in on what was happening.   We finally made it to Goiania that evening.  Her boyfriend was waiting for her.  That was a day to remember.

GringogGene wrote:

I was in the States when Collor froze the accounts.  I arrived a couple of days later at Guarulhos Airport, which was empty...dead!  Most flights had been cancelled. No money, no passengers, no flights.  I ended up waiting until late that afternoon before VARIG managed to gather enough people together for a flight to Goiania, Brasilia, Salvador and Recife. 

A young Canadian woman who had arrived on the same flight as me out of Dallas couldn't get any money.  I think she was trying to cash traveler's checks and  I don't think ATMs back then accepted international bank cards.   At any rate, she was also going to Goiania  to meet up with her boyfriend.   Luckily, I had a wad of BR money so she and I sat up in the airport restaurant ate, drank beer and watched airplanes sitting on the tarmac.   I put a call through to her boyfriend and she was able to fill him in on what was happening.   We finally made it to Goiania that evening.  Her boyfriend was waiting for her.  That was a day to remember.

What a story!

James wrote:

In March 1990, the government of then President Fernando Collor de Mello confiscated the savings accounts of everyone in Brazil. To this day those people have not seen all of their money returned, in fact, they received only pennies on the dollar. If you know any Brazilians who suffered through this dark era if their lives were ever the same again.

Unbelievable!  Do you really think this could happen again?    1990 was 25 years ago...25 years is a long time but considering this is Brazil, 25 years is NOT LONG ENOUGH.

ndfansince53 wrote:

My wife and I intend to retire in Brazil in a few years. She is a Brazilian citizen. I am an American citizen.

A question has come up about the advisability of taking advantage of the current exchange rates and to transfer US$ to a bank account in Brazil. Is that a good idea or not?

Deposits in US banks are guaranteed by the US government. If the bank goes under, Uncle Sam is right there to return your money to you so you can deposit it to another bank.

What about Brazil?

My wife has an account with Banco do Brazil, however, one of her sisters told her to open an account in Caixa Econimica where the money is guaranteed. In other words she's saying the money is safe in some banks, bout not in all banks.

Would appreciate input/advice.

I don't know enough to say which Brazilian banks are safer or more reliable, but here is what I do know:

My husband and I bank with Santander, CAIXA, and Itaú (My husband is not Brazilian but has lived here for 30 years.) We need the Santander account because my husband's company will only direct deposit his paychecks into this account. We had to recently open a CAIXA account because we got our mortgage loan through CAIXA and in order to receive the lowest interest rate, one of CAIXA's stipulations was that we open an account with them and have my husband's direct deposits transferred to their bank. We will close the Itaú account as soon as we receive our ATM cards from CAIXA. The Itaú account was originally just a "backup" account that my husband had kept for many years because my husband does a lot of online banking and sometimes when the Santander website was down, it was convenient for him to have a backup account. However, Itaú's monthly banking fees recently shot up nearly 100% from R$ 34/month to R$ 66/month so it's no longer worth it to hold onto this account (especially now that we have the CAIXA account)!     

For the record, we closed our deal with CAIXA on October 1, 2015...yes, it has been over 45 days since we opened our CAIXA account and we already made our first mortgage payment on November 1, but WE HAVE YET TO RECEIVE OUR ATM CARDS. Unbelievable.  CAIXA might be your "safest" bet, but they are notorious for their bad service. We only went with them for our mortgage loan because their interest rate was 3% lower than the rates at the other Brazilian banks (Bradesco, Santander, Banco do Brasil, Itaú).

Hello: I have been living in the USA for many years, I have double nationality ARGENTINE and US Citizenships. My point  is that I'm living in Nevada now. But I want to move to Brazil.
My question is how to manage my money  from USA  to Brazil.
I'm retired and I need my SSI to be available in Brazil. Yes .. I had my own experience with the Argentine banking. Being on vacation once I had the great idea of placing my dollars  in Argentina for two weeks to earn some extra cash. Or do I was suggested to do. So I did.
Banks where closed suddenly, nobody was able to get any money and I lost 3,000 dollars in one day due to the dollar exchange price. I have more details. But I leave it  there.
As a result of that experience I'm terrified that if I move to Brazil something like that can happen there.
My idea:
1)  leave my US account open, and wire myself the money I need through the online banking . But where?
2) use ZOOM/PayPal
3) make the SSA to deposit my money in the American Express Blue Bird card
Unless; I can use the same ATM card from the bank I have right now.
Can I do that?
My income is around 1200 dollars monthly. I'm a very simple person. I don't need car or expensive stuff. I need to be close to my family that are in Argentina. Any suggestions are appreciated.
Best!
Adrie
PD; Why I want yo move to Brazil instead of Argentina?
1) I love Brazil
2) I don't trust the government in Argentina. Neither the banks!
HELP? 😩

08/03/21

Welcome, Adrie!

With an income of US$1200/mo, you will not qualify for a Brazilian retirement visa:  the cutoff is US$2000. 

HOWEVER, as an Argentine citizen, you DO qualify for residency under the rules for Mercosul citizens.  In all of your dealings with the Brazilian Consulate, you'll want to be speaking as an Argentine citizen planning to move to Brazil under the Mercosul rules, not an American citizen seeking a retirement visa.  This will not affect either your US citizenship, or your Social Security in any way.  It does give you a very desirable benefit, though.

The Brazilian Consulate with jurisdiction over Nevada is the one in Los Angeles.  You should become familiar with their services, and direct all of your visa application questions to them.  Here's their website:

http://losangeles.itamaraty.gov.br/en-us/

On your financial questions, different people use different approaches.  Here's the one that works for me.

I've kept one US bank account open, and have all of my US income, including Social Security, deposited there.

As soon as I obtained residency in Brazil -- a resident ID card, CRNM, from the Federal Police -- I opened a Brazilian bank account.  Mine is at Banco do Brasil; it can be at any of the big banks, but you probably do want a bank with national reach.

I send the same dollar amount monthly from my US account to my Brazilian account, and it hits my Brazilian account in Reais at the prevailing rate.  I used to do wire transfers, now I use Wise (former TransferWise) because it's cheaper and the exchange rate is somewhat better.  There are several dependable services, and undoubtedly other members will post their experiences.

Until you have your residency, you should be able to use your US ATM card at the ATMs of Brazilian banks, as long as the ATM shows one of the network badges on your card.  Your withdrawals will be in Reais at the bank's daily rate, and there are upper limits to how much you can withdraw a day, but you'll be able to plan around that.

Once you're living in Brazil, management of your Social Security account will be transferred to the Federal Benefits Unit at the US Embassy in Lisbon, Portugal, who handle Social Security for everyone who lives in a Portuguese-speaking country.  You should contact them to make this happen once you're settled.  They are very good, I've found them much easier to deal with than SSA in the US because they're used to dealing with expat issues, and they have extended telephone hours for clients in Brazil.  They can arrange to deposit your benefit however you choose; I just left mine going into my US account.  I recommend leaving it in USD until you actually transfer it; you can have it deposited directly in your Brazilian account, but it makes no sense (to me, anyway)  to have it all in Reais unless you're sure that you're going to spend it all that month.  I would also not put it with an intermediary like AmEx, but that's me.

US credit cards can be used in Brazil.  Acceptance is widespread, but unpredictable:  some little places that you'd never expect accept them, some major stores reject them.  Some stores include an adder for processing.  Be sure to only use cards that do not have a foreign purchase charge on the US side.

Where do you plan to live?  You can start to get an idea of relative cost of living for various cities on numbeo.com.

Please feel free to post any other questions that come up -- that's what we're here for.

I have kept a bank account in the USA for direct deposits. I also have a bank account in Brazil, Itau. Your choice of banks in Brazil will vary depending on your monthly fees, transfer fees, fees for excess savings withdrawals, and also take a good long look at the lines just to get into your choice of banks where you live. You will see that some banks and just some bank branches always have a long waiting line just to get inside their doors.
From my U.S. bank account, I have a choice while in Brazil to use my Bank's debit card, or I use a Capital One Visa card as they do not charge exchange fees, but always ask about how they calculate the current exchanges rates. Then, I pay it off every month with the bank account, prior to paying any interest.  For transferring money from the USA to Brazil, I have found Wise to consistently have lower fees than Zoom/PayPal, etc., sending more actual $R per U.S. dollar to my Brazilian account.  Bank wire transfers have always been the most expensive for my use.

Thanks.. very good information.
I'm planning up North. Natal or Fortaleza.
It's cheaper that way. Not sure 🤔.
So far extremely tired of moving and leaving everything behind.
I don't have any valuables. I get used furniture.
I lived 33 years in California, 3 years in Arizona and moved to Las Vegas NV  a year and a half ago.

The reason of moving this time are the “ low income “ rental apartments that I'm living in now. But I'm tired of the rules and certifications to “ qualify “ .
Before I tried to be a home owner. I bought  a mobile home with  a 10 years loan and it was an interesting experience.
Beside that almost caught on fire , 5 days after I moved in,being without gas for 3 weeks, in January ( Winter) )  a tree falling in the backyard because of the wind … being without power due to an power outage  for 3 days in a 115 degrees outside and 90 degrees inside the home in the summer, the cost was more than I was expecting, between park rental and insurances. and keeping up with the rules and the grass mowing . Etc etc
That  I wasn't able to pay  for it, so I surrendered.
Yes . As an Argentine citizen I'm planning to go to the Mercosur , lest call it “ benefit “
. Will see what I can do.
Thanks again!
Adrie

Adrie,
Welcome. Where is your family located in AR?
We live in Foz do Iguacu BR bordering Puerto Iguazu.
Once AR returns to normal you can cross the border (short drive and taxi is reasonable) and Puerto Iguazu has direct flights to BA, AR daily,
Foz is not tropical (especially the last two weeks), cost of living is very reasonable. Foz is dependent on Itaipu and tourism. City of 180.000.
I can not comment on Natal's costs.
Wish you luck. I agree as to AR banks do not trust it.
Now, abthree has given great advice to follow. I leave all in the US and transfer $$ when needed.

08/03/21

Adrie,

Texanbrazil makes a good point.  Fortaleza and Natal are both beautiful, but they're about as far away from Argentina as you can get in Brazil.  You can see Argentina from Foz, though.