Frequently Asked Questions – Banking in Turkey

Following on from the previous post here is a quick FAQ on banks in Turkey.

Who can open a bank account in Turkey?

Basically, anyone who has a Turkish Tax Number can open an account. A tax number is quickly obtained from the local tax office and this deducts at source the government’s cut from your interest earned. Some features of banking, like gold trading and mutual funds and share dealing require full demographic information and that means a Residence Permit and the associated Turkish identity number. If you want to use internet banking then you are also going to need to register a mobile phone to your account as online access normally relies on one off passwords sent to your mobile.

With just a basic account can I hold accounts in various currencies?

Yes, normally when you set up a bank account here you will have linked accounts in Sterling, Euro and US Dollar. You can move funds between these accounts either via online banking or in person at the branch.

Do all banks have English speaking staff?

No, however most banks have expat specialists who do speak English and if they are not based at your local branch they will still help you and arrange to meet you should you require it. All of the major banks operate an English version of online banking and most, certainly Garanti, HSBC and Yapi Kredi, have English speaking operators on their telephone helplines.

What are the current interest rates on deposit accounts in Turkey?

This is a pretty variable thing and where the moving around banks thing kicks in. Standard online deposit accounts currently offer around 9% gross on Turkish lira monthly deposits however you can improve this rate significantly by personal interaction at the branches and having a sizeable sum on deposit. I heard of someone who got 11.5% gross the other day by judicious bullying of a branch manager! If once a month you want to do a round of the banks and play one against the other you will get a better rate.

Am I taxed on any interest I earn?

Yes, and currently on interest bearing accounts you are deducted 15% at source, in other words it’s gone before you get it. Other investments have different scales of tax and they need monitoring but the rates of tax are pretty easy to find and scouting through the help screens of your online banking normally reveals them!

Can I move my private pension to Turkey?

If you are British, then yes you can, under the QROPS legislation, but moving a pension is a specialist thing and it isn’t always the right choice, particularly if you have one of those lovely things called a Final Salary Scheme (you lucky dog!). A lot depends on your age and your plans however there are several banks in Turkey that are accredited via HMRC. If I get motivated enough I’ll explain the process and the pro’s and con’s at some point.

Which bank is best in Turkey?

Tough call really, I have personal experience of HSBC and Garanti and friends with accounts at Yapi Kredi and Finansbank and honestly they are all pretty good and a lot depends on the local manager and how well you get on with him. Personal banking is still a big thing here and whilst I choose to do most of my banking online that’s because I’m comfortable with it, I could just as easily be sitting in the manager’s office being plied with tea and treated like royalty, because you are still a real person to the banks here and not just a number. I like Garanti’s and HSBC’s online banking but Finansbank are giving good deposit rates currently so it’s a personal choice and which ever bank you choose initially doesn’t have to be your forever choice, once you have the tax number you can easily swop between them should you want to.

How safe is my money in a Turkish bank?

Deposits in Turkish banks are protected by The Savings Deposit Insurance Fund which is managed by the government and insures individuals to the tune of 50,000tl per person per bank. Currently this figure is under review and there are suggestions that it will be raised to parity with European countries which insure to 100,000 Euros but the banks are objected as obviously it will raise their insurance premiums. If you’re concerned then spread your money around various institutions although you won’t have the same bargaining power with regard to deposit rates if you do that.

Do Banks offer extra products?

Most banks will offer insurance products via a tie up with a third party insurance company. Home, car and personal insurance are popular products that you can buy through your bank. The personal accident and emergency insurance policies are particularly popular as they provide a low cost measure of safety to those without private medical insurance or SSK. Buying through your bank gives you a little extra clout when it comes to making a claim and protects you from dodgy insurance agents but equally you lose out on the chance to make personal contact with a good insurance agent who could maybe offer more hand holding and lower rates.

Can I have a Turkish Credit Card?

Normally, as a foreigner, even a foreign resident of Turkey, you would need to deposit the equivalent of your credit limit in a ring fenced interest bearing account in order to receive a credit card. If you have a long history with a particular bank or tons of money this can sometimes be waived. However, most banks give you access to a virtual credit card online which you charge with money from your current account and can use for online purchases of things like flight tickets where the seller only accepts credit card payments and can’t take debit card payments (a pretty common thing in Turkey).

Are Turkish Bank Accounts free to run?

They used to be but now they are sneaking in little charges so you have to check. Foreign currency accounts often have a small annual fee and some lira current account have a small monthly management fee. Basically when you set up your accounts you need to check what charges will apply, particularly if you plan on moving a significant amount of foreign currency into the country. Some banks charge a percentage on foreign currency movements and some charge a flat fee. It’s one of those particularly Turkish things; if you don’t ask the specific question then chances are the information won’t be volunteered. You have to get into the habit of asking “What will this cost me?” for everything until you know the system.

If I think of any more things I’ll add to this as time goes on 🙂

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