Whats the advantage of having my Money in a Hong Kong bank when I move there?

Question

I'm moving to Hong Kong in a few months, and I want to know what the advantage would be of putiing my Money in a Hong Kong bank as opposed to leaving it in a USA CD?
Any thought?

Answer 1

Very little. Sure, you are going to need some walking around money until you start your job, but most everything can be paid for by a credit card there (which can be paid off by e-bill payments).

First, the Hong Kong dollar is effectively pegged to the US dollar (okay, it technically has a floating band, but it is super tight range). This means you take very little currency risk by keeping HK dollars. It's also important for the second reason...

Secondly, the HK rates are lower than US rates. Yes, HK does have foreign currency accounts, but you get screwed on fees, bid-ask spread when you convert currency over to HK dollars.

Third, I am assuming you will have a job in Hong Kong. This means that you are LONG Hong Kong dollars. Which means, provided that you don't blow every cent you make, you will start building up Hong Kong dollars. As a result, you will get a larger and larger currency exposure to HK dollars. As an American, it is generally a goodi dea to keep your savings domiciled in US dollars (as you really don't want to be a currency speculator, unless it's on purpose).

Fourth, you can just as easily keep your money in the US and wire it over if you REALLY need it. But once you close your US dollar account - it is very difficult to open up one from overseas. I actually took mine over in cash to avoid the stupid fees. You'll find that you'll still need to pay things in US dollars (e.g. pay taxes, paying small bills, online payments in US need credit cards with US address on the them, so you'll need a US-based credit card where you change your address to a friend/relative in the States).

PS - go with HSBC as they have WAAAAAAY more ATMs than anyone else. Have fun in Honkers! I know I did!

Answer 2

It's always more convenient to have some money in a local bank. Though banks are "international" dealing with an off-shore account with the local branches of the same banks can be a hassle. If it's a short tenure, you could get away with not opening an account, but any long term move, then open one up.