Once you have made the decision to move to Russia, you will be faced with a long list of questions such as where to live, where your children will go to school, or even how to use the local supermarket.
Some foreigners in Russia want to immediately open a local bank account upon arrival, and others think they can get by without it. If you have a bank card from your home country, and are not in Russia long term, it might not be worth opening a local bank account. But having a local account is, of course, important if you are employed locally, and makes a whole list of everyday tasks simpler such as paying for your cellphone service and other bills.
With that, many folks simply choose a bank brand name that they recognize and trust. For example, many Europeans choose Raiffeisen Bank. As an American, I had the thought of going to Citibank some years ago, but found that opening an account there was more complicated than at a Russian bank. It’s worth mentioning here that although choosing a Western brand bank might lead to a more Western-style customer experience, technically speaking, regardless of the bank name, you are dealing with a local Russian bank.
Other expats simply choose the bank that was recommended by their Russian employer.
But understanding the types of banks in Russia, can help you choose which one is the best fit for your personal banking needs.
Let’s start off with some basic understanding of banking in Russia:
- The Russia Central Bank is cleaning up the banking system, and since the beginning of 2015, more than 300 banks have been closed, according to banki.ru.
- Most of those banks are relatively small. The chances that you would find and then choose a bank that would then be liquidated is slim, but it happened to this blogger some years ago so it could happen to you. If it does happen, you are automatically insured by the government for up to 1.4 million rubles in your account. This is why some folks hold accounts in multiple banks.
- Also, in the unlikely event that your bank is closed, you will receive your money two weeks later. In my case, I was quite relieved to have no issues recovering my money.
- To open a bank account in Russia, you will need your passport, visa, visa registration, and most likely a notarized passport translation. In most cases, this is enough to open an account.
- Make sure that the bank has great online banking features and a good banking app for your phone. Nearly all Russian banks do, and the great thing is that, in most cases, with a good banking app, you will rarely every need to wait in line at the bank ever again, after opening the account.
- The Russian Central Bank has made a list of “banks of systemic significance”. In other words, these are banks that they will save at all costs. If you expect to hold large amounts of money in your account, it might be worth checking that your bank is on that list.
With those points, in mind, it is also helpful to understand that there are three main types of banks in Russia. Understanding these categories, might also help you in choosing the best bank for your personal needs.
The Three Main Types of Banks In Russia:
- State-Owned Banks: These include the likes of Sberbank, VTB, and Rosselkhozbank. And let’s be honest here, Sberbank is the uncontested king of Russian banking, and there is a very high chance you will end up there. In my experience, Sberbank has a great online banking system. Also, since they are used by such a high percentage of the Russian population, you can easily send money to your Russian friends with no attached commission, if that is a situation you foresee. If you haven’t been to Russia in the past 10 or 15 years, you will be blown away at how Sberbank has changed. At the same time, there are three things that perennially bewilder me about Sberbank: 1) Perpetually long ATM lines. 2) The length of time it takes them to make some bank cards and other bank documents on demand. 3) The fact that Sberbank is broken up or divided among the Russian regions and if you are in a different province and have a serious question about your account, they often can’t help you. Having said that… if you are not in a major Russian city, Sberbank is most likely the (only) way to go.
- Commercial Banks: These include the likes of Raiffeisen, Alfa Bank, and Otkritie. As mentioned earlier, Raiffeisen is used by a lot of expats, and most of them report a customer-friendly experience. Otkritie is an example of a “systemic significant” bank that ran into trouble and was bailed out. I personally use Alfa-Bank. I find the online banking easy to use. If I have a question, they quickly answer in chat via my phone app (in Russian), and even quickly answer the phone. I helped a fellow expat open an account in Alfa some months ago, and we walked out 20 minutes after arriving. She already had her bank card, with her name on it, in her hand.
- Online Banks: Banks without any physical retail locations are becoming increasingly popular in Russia. These include the likes of Tinkoff and Rocketbank. In most cases, you can fill out your account application online and, if necessary, the bank manager will visit you. You will find that folks that use online banks in Russia, are a lot like vegans. They will love telling you about their experience.
Often the most hotly contested discussions in Russia expat forums are around which banks are the best. Often, our opinion of a bank will be based on a single customer-service experience or two. With that in mind, the level of customer service in Russian banks is astronomically higher than it was some years ago. And I hope that understanding the background of the banking system and the types of banks will help point you in the right direction as you make your choice for local banking in Russia.
What bank did you choose in Russia? Any great customer-service stories? How about nightmarish tales? Comment below.