Mexico Guide – Money
If you are staying more than three months in Mexico, you will probably need a local bank account. Learn how to open an account, get a credit card, transfer money abroad and change currencies. Managing your finances will be easier with our step-by-step guides and articles.
Currency and exchanging money
For large Peso notes it is sometimes hard to get change (i.e. for $500 or $1000-notes), so always carry some loose change around. You will also need it frequently for tipping people.
Mexico’s Peso is free-floating on the currency markets. Since the last major devaluation in 1995, the Peso has been slowly devaluated against the US$, but has become a lot more stable than before. You can import and export as many Pesos as you like.
If you are in an unsafe neighbourhood always limit the amount of cash you carry on you, especially in Mexico City where getting robbed a couple of times is part of an average life experience. There are also frequent reports of people getting hijacked and forced to withdraw money at the nearest ATM with their credit or debit cards, but these assaults are less common than a direct robbery of cash.
Currency exchange in Mexico
You can change currencies at Mexican banks (bancos), exchange houses (casas de cambio) or hotels. US-Dollars, Canadian Dollars, Euros and Pounds Sterling are accepted almost everywhere. Banks and exchange houses normally do not charge a commission for currency exchange, instead making their money on the spread between the exchange rates for buying or selling Mexican Pesos. Banks and exchange houses usually offer similar exchange rates, while hotels often have less favourable rates. If you change money at a Mexican airport, you are likely to get similar rates as you would in the city centre.
Besides the exchange rate, you should also consider the time you want to spend on your currency exchange. Changing currencies at Mexican banks can be a rather frustrating experience. Many banks have a long wait, some only change money during certain hours of the day, and others only change currency if you have an account with them. If you want to exchange a traveller’s cheque, procedures can become even more complex and time-consuming. After having spent more than an hour at the bank maybe you would have preferred to have visited the exchange house next door; in spite of it’s slightly less favourable rates.
Traveller’s cheques in Mexico
Traveller’s cheques can be exchanged in most Mexican banks (at least in theory) and some exchange houses at the daily exchange rate. If you want to make sure that your traveller’s cheques are widely accepted, your best bet are cheques from well-known brands such as American Express denominated in US-Dollars. When exchanging a traveller’s cheque you should not be charged any fees in Mexico. If you are asked to pay a fee, look for another place.
Cash withdrawals and credit cards in Mexico
Debit and credit cards are widespread in Mexico and are accepted at most larger hotels, shops, restaurants and service providers.
Most Mexican establishments now use an electronic card payment system, though some still continue to use old carbon copy imprinters. Your purchases will be charged in Pesos and converted to your local currency if you use a foreign card.
Note that some banks charge a foreign exchange fee on purchases abroad, so ask your bank about any potential fees. If you are staying in Mexico for some time, you might want to consider getting a credit card from a Mexican bank so that you are charged directly in Pesos and do not have to worry about the currency exchange.
Mexican credit cards
The credit card market in Mexico is following US-patterns, with many Mexicans not only using their credit cards for payment, but also for real credit purposes. Many people are willingly piling up debt on their credit card, despite the fact that interest on credit cards is extremely expensive compared to the US and Western Europe. Penalties for late payments are even higher, so be cautious with how you use your credit card.
To get a Mexican credit card you need to have a bank account with a Mexican bank. If you do not have proof of a good credit history some banks will require a deposit to secure your credit card payments.
Withdrawing cash at Mexican ATMs
Cash machines (ATMs) are widespread in Mexico, although in smaller villages you might have to travel to the next town to find one. You can withdraw Mexican Pesos with any card that is connected to one of the global networks like Maestro, MasterCard, American Express or Visa.
ATMs are the most convenient way of withdrawing Pesos in Mexico. If you have a card from a foreign bank you will usually get a favourable exchange rate on your cash withdrawal.
Most banks charge about 1% of the transaction value for cash withdrawals with debit cards, while fees for cash withdrawals with credit cards can be significantly higher. For foreign cards some banks charge an additional ‘foreign exchange fee’. If you are staying in Mexico for a while, you will probably save yourself from fees by withdrawing cash with a Mexican card.
Precautions when withdrawing cash from ATMs in Mexico
Be aware of your surroundings when withdrawing cash from ATMs in Mexico. In Mexico City assaults on people who have just used an ATM machine are very common, so you should never withdraw any money at night in a lonely area. Most ATMs in Mexico are in a small lobby that you can only access with your card (so you are more or less secure inside), but there might be people waiting for you once you get out of the lobby. There are also reports of people being kidnapped and forced to withdraw money at a cash machine, but these incidents are not that common. When ATMs are re-filled with cash you will see armed police or private security with heavy arms at hand.
However, you can normally withdraw cash from a Mexican ATM without running into any danger. Just use your common sense and be alert for any potential problems.
How to open a bank account in Mexico
Mexican banks offer accounts in Mexican Pesos or US-Dollars. There are significant differences between account services and fees, so shop around before making a decision.
To open a Mexican bank account you will need valid identification such as your passport or driving license and a proof of address. Dollar denominated accounts are only available for citizens of the US and Canada or for corporations. To open a corporate account you will need all articles of your incorporation and a power of attorney.
Checking accounts in Mexico
Checking accounts can be opened at any retail bank in Mexico. Charges can vary and often depend on a minimum deposit that you leave in your account (if you go below this deposit charges automatically go up). Many banks only offer a limited number of free cash withdrawals at ATMs; any additional withdrawals are charged with commission.
Deposit accounts in Mexico
Deposit accounts in Mexico come in two forms: ‘sight’ deposit accounts allow you to withdraw without notice and are usually accompanied by a debit card for withdrawing cash at ATMs worldwide. Interest rates are minimal, and many banks require you to hold a minimum deposit in the account if you don’t want to pay any account fees (usually around 1000 Pesos).
Deposit accounts require you to hold your savings for a minimum time before you can withdraw them; notice periods are usually between one month and a year. ‘Notice’ accounts will generally offer a better interest rate than sight accounts, with interest usually going up together with the notice period.
Major Mexican banks also offer ‘market accounts’ which let you buy and sell in the international stock markets directly. These accounts usually require a higher minimum deposit (around 5000 Pesos).
Offshore accounts in Mexico
Foreign citizens can also open Dollar-denominated offshore accounts through the offshore branches of Mexican banks or their affiliate banks abroad. These accounts are targeted towards high net worth individuals and usually require high deposits. Activities on these accounts are free of any taxes on income, profits, interest and dividends, though the income from the account is obviously taxable in your country of residence. Mexican offshore accounts come in all forms. Most of them are completely liquid, offer daily capitalisation of interest and an extremely strict confidentiality of information.
Internet Banking in Mexico
All major Mexican banks offer Internet Banking together with their accounts, though sometimes it make take a while to get it up and running. In a country where you can easily waste a whole morning putting through a basic transaction at your local bank, Internet Banking can save you a lot of time (and nerves). Most major bills (like telephone or electricity) can be paid online, though some (like your rent) might still have to be paid in cash.
Transferring money to and from Mexico
International money transfers through Mexican banks can be extremely expensive and slow, so it is worth checking alternatives.
There are many transfer providers in Mexico that offer international money transfer services and often offer cheaper transfers than the banks. Using one of these providers makes sense especially if you want to transfer larger sums.
For smaller amounts an alternative way of transferring money to Mexico is to simply use a foreign bank account and withdraw funds from this account at a Mexican ATM. You will be charged a fee for each cash withdrawal, check at the bank for the exact percentage.
Money transfer agencies in Mexico
If you need to quickly transfer cash from abroad to Mexico (or vice versa), one of the fastest ways to do so is through an international money transfer agency like Western Union. The person sending you money deposits the cash at an agency office in their country and explains where the money should be transferred to. Immediately afterwards you can go to an agency in your destination and pick up the money with a proof of identity. Unfortunately money transfer agencies also charge hefty fees on these transfers, so this will not be a cost-effective option on large or regular money transfers.
Internet services for transferring money to Mexico
You can also use one of the large online payment services like PayPal or Money Bookers for transferring money to Mexico. Fees and procedures vary so shop around before deciding on one.