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Friday, 02 January 2009 00:00

How to make payments for property - Bank Accounts

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Why is a bank account needed?

 

According to the current regulations, any monetary transaction which exceeds YTL 8,000 (approximately £ 3,000) has to be made through Banks, Participation Banks or Post Office (PTT).

Making your payments through the systems mentioned above will enable you to document your property-buying transactions. In case of any dispute or undesirable events, you will be able to make use of those records.

Which currency should be used?

You can make your payment in GBP, USD, EURO, Turkish Lira (TL)-the local currency- or the other convertible currencies sold or purchased by the Central Bank of Turkey. If you want to carry out your transactions in YTL, then you are advised to convert your currency into YTL at Banks, Participation Banks or authorised change bureaus in Turkey (You can find daily indicative exchange rates at www.tcmb.gov.tr)

Some foreign nationals prefer setting all price terms in the purchase&sale contracts in New Turkish Lira so as not to encounter any tax evasion complications due to a possible conversion error.

Contact information of Turkish Banks 

Please refer to www.bddk.org.tr for the full list of Banks and Participation Banks in Turkey.

Types of bank accounts

YTL-denominated and FX-denominated accounts: You can open an account in New Turkish Lira (YTL) or in any currency convertible in Turkey, including Sterling. There are no limits on the number of FX-based accounts.

Savings (depository) accounts: If you invest in a savings account at a bank, at the end of the savings term, you earn an interest on the money you deposited.

If you do not wait for the end-of the savings term and withdraw your money in your account before the term ends, no interest is paid to you and you only take back the principal.

However, many banks in Turkey automatically set another savings term if an account holder does not withdraw his/her money at the end of a savings term. What banks do is they consider the money which accumulated in the account as the new principal and they apply the current interest rates to this new principal. Unless the account holder withdraws the accumulated money, the period renewal is repeated at the end of each savings term.

Thus, if you plan to open a savings account, please make sure whether the bank provides the automatic savings-term renewal.

Savings accounts can be either in YTL or in any convertible foreign exchange. Savings term starts from 1 month and may stretch to more than a year.

As of August 2005, the average nominal interest rate for YTL-denominated savings accounts is around 16% whereas those for FX-based accounts are close to the rates in the countries where the currency in question is used.

Current (depository) accounts: these are the accounts in which you deposit your money and from which you can withdraw it at any time partially or fully. No interest (or very little interest) accrues on current accounts.

Current accounts can be either YTL-denominated or FX-denominated.

Other investment tools provided by banks in Turkey

Banks in Turkey provide lots of other savings instruments including trading of Treasury bills or bonds, investing in mutual funds and equities, trading foreign exchange etc. Banks normally assign financial advisors to their customers and those professionals are supposed to guide you on how to invest your money best.

Internet banking services

Many banks in Turkey provide very good internet banking services and do have web pages in English language. In case you are interested in internet banking services, please ask your bank to provide you with the necessary authorisation passwords.

Opening a bank account in Turkey

You can open accounts at Banks in Turkey in your own name. All you need to do this is just to have a tax number from a local tax office, which takes only few minutes, and then to submit it and a copy of your passport as well to a Bank branch you want to use.

Joint accounts

Joint accounts can be opened. A joint account is an account on which two or more people do have certain rights.

While opening joint bank accounts, make sure whether the other party has the right of withdrawing money from this joint account without your consent or not.

Privacy of accounts

Thanks to the strict banking regulations in Turkey, any body cannot withdraw money from your account and any body (except Courts of Turkey in case of legal inquiries) cannot learn the details of your bank account unless;

• you provide the relevant person with a valid Power of Attorney, or
• you open a joint account on which the other party has a right to withdraw money.

Opening a bank account in Turkey when you are in the UK

If you want a bank account in Turkey to be opened when you are in the UK, then you

  • can assign someone to carry out the above transactions for you through a power of attorney, or,
  • contact the Turkish banks based in the UK

Using your UK cheques in Turkey

You can use your cheque book provided by your bank in the UK for the payments to be made in Turkey.

However, comparing the cost of ‘transferring money from your account in the UK to an account in Turkey’ to ‘commission fee to be charged on your UK cheque by Turkish banks’ may be of great importance.

Read 1455 times Last modified on Sunday, 21 June 2015 19:38