tl;dr version: Schwab is NOT a good choice for international travelers, use Fidelity instead.

I blogged about switching to Schwab for my banking needs while temporarily living outside the U.S., well, I spoke too soon.

While we were in Hualien for the Taroko half marathon, I got errors trying to withdraw from ATMs with my Schwab card. I called Schwab and was told I had to call the verification department to remove restrictions placed on my accounts. I called the following Monday (their verification department has normal business hours, not 24/7 like their customer service), and this was what happened:

• When I applied for the Schwab account, I came from a Taiwan IP address
• I was told the Schwab One Brokerage and Investor Checking accounts are only for U.S. residents living in the United States
• I have to go into a Schwab location in the States, in person, with 2 forms of identification to verify the account
• If I couldn’t do that, I could either close the account, or convert it to an International Schwab account, which takes a long time to open and is not really the same thing
• It doesn’t matter that I am a U.S. Citizen, they said to comply with whatever banking regulations they couldn’t allow account holders living outside the United States, even temporarily
• Even if I was able to walk in to verify the account this time, if I use foreign ATMs too many times they could potentially re-lock the account without notice and I would have to do the verification in person all over again

This is total bull, if their policy is such that you can’t open accounts with foreign IPs without in-person verification, they should’ve blocked the application until it was verified. However they let me open it, transferred in money, even ACATS in stocks from another brokerage account. They also sent me a box of checks and even sent me the debit/ATM card via FedEx to Taiwan! I could access the account online and with the iPhone app, used the ATM card as normal for almost a month, AND THEN locked me out of everything all the sudden without warnings.

Fortunately I played it safe and hadn’t switched to Schwab as my primary bank yet, so not having access to that cash and not able to trade wasn’t a huge deal. All my holdings are long-term, so I didn’t get screwed too badly. HOWEVER, after the election there was actually a decent selloff, and the portfolio value dipped over 20%, I could not do anything about it, but since they’re very long shares, I probably wouldn’t have done anything about it either.

My main reason for choosing and recommending Schwab was foreign ATM transactions fees refunds while traveling internationally, but fact that they would lock the accounts randomly due to out-of-States usage makes Schwab a HORRIBLE choice. So, if you plan to travel outside U.S. for an extended period of time, do not count on being able to access your Schwab account.

I ended up opening a Fidelity account with similar offerings, and transferred everything from Schwab to it. I used a VPN with a U.S. IP address close to my U.S. mailing address to do the application this time just in case. I had to call Fidelity once with a few questions, and was told they wouldn’t care even if I lived permanently outside the U.S., I can have the accounts as long as I am a citizen.

Also, with Schwab, every time I setup an account for ETF transfer, I had to call them to finalize the link even after I typed in the verification deposit amounts. It was pretty annoying but I only had to do that once per account I wanted to setup ETF for. When I applied for the Schwab account I enabled Bill Pay in the application, but it was never automatically setup. I had to call and it took 3 weeks to get working. Fidelity’s setup process has been a lot more seamless.

And just to avoid any accidental account lock-ups, while traveling outside your home area, it’s best to use a VPN with an IP address close to home to access financial sites and iOS apps. I’m trying Astrill with an IP from Los Angeles, where my Virtual Post Mail virtual address is.