Opening a bank account is one of the first practical tasks after moving to the United States. With it you can receive your wages, pay rent and bills, use a bank card, transfer money and manage your day-to-day spending.
For a new immigrant the procedure can be different from the system they are used to in another country. Not every bank asks for the same documents, and not having an SSN or a permanent address can make the process harder. So it is better to understand the main requirements in advance and choose a suitable bank.
Why you need a bank account in the USLiving in the United States without a bank account is possible, but it is far less convenient. Most financial operations are easier to carry out through an American bank, especially if you plan to work, rent a home or pay for services regularly.
An ordinary checking account lets you receive wages, pay for purchases and bills, use a debit card and transfer money. For someone who is only just settling into life in the United States, that account usually becomes their main financial tool.
With a bank account you can:
- receive wages by direct deposit;
- pay rent and utility bills;
- make purchases in shops and online;
- send and receive money transfers;
- pay for subscriptions and other regular expenses;
- withdraw cash from ATMs;
- manage your finances through a mobile app.
Which bank account to choose
Two main types of account are most commonly found in the United States: a checking account and a savings account. They do different jobs, so before opening an account it is worth deciding what exactly you plan to use it for.
Checking account
A checking account is meant for day-to-day financial operations. It is the account many people have their wages paid into and pay their main expenses from. For a new immigrant this is usually the most important first account. Once it is open you will be able to get a debit card and set up online banking.
Savings account
A savings account is more suited to holding savings. Depending on the particular bank's terms, interest may be paid on the balance. Some people open both types of account at once. They keep money for current expenses in the checking account and regularly transfer part of their income into the savings account. That approach keeps everyday money separate from savings.
Can you open an account without US citizenship
Yes — US citizenship is not a compulsory condition for opening a bank account in every case. Banks can serve foreign nationals, but the document requirements depend on the particular financial institution.
An immigrant should contact the bank in advance and explain their situation. The requirements for someone with a Green Card, for example, may differ from those for a holder of a temporary visa or a work permit.
The bank may ask for:
- a passport;
- immigration documents;
- proof of a US address;
- an SSN;
- an ITIN;
- further identification details.
So do not go only by what friends have experienced: even two large banks can have different requirements.
Do you need a Social Security Number
Banks often use an SSN to identify a customer and for tax records, but not having an SSN does not automatically mean an account cannot be opened. Some banks can take on customers without an SSN if other documents are available. The policy of a particular bank, though, can differ considerably. If your SSN has not been issued yet, you can put a simple question to a member of staff before you visit: Can I open a checking account without a Social Security Number It is also worth asking straight away which documents the bank accepts instead of an SSN.
What an ITIN is
An ITIN (Individual Taxpayer Identification Number) is a tax identification number issued by the IRS to people who need a tax identifier but are not entitled to an SSN. An ITIN and an SSN serve different purposes. Having an ITIN does not in itself give a person the right to work in the United States.
In some banking situations an ITIN can be used to identify a customer for tax purposes, but whether it can be used depends on the requirements of the particular bank. More about the tax number can be found on the official IRS website. IRS — Individual Taxpayer Identification Number [→ https://www.irs.gov/individuals/individual-taxpayer-identification-number]
Proof of address
For a new immigrant, proving an address is sometimes one of the hardest parts of the procedure. The bank needs to know where the customer actually lives and how they can be contacted.
Various documents may be accepted as proof, for example:
- a tenancy agreement;
- a utility bill;
- an official letter;
- correspondence from a bank;
- other documents with your name and address.
The list of documents depends on the bank, though. So it is better to check in advance, to avoid having to visit the branch several times.
How to open a bank account
If you have recently arrived in the United States, going into a branch is often the easiest way to sort out the paperwork. A member of staff can look at your situation and tell you what further information is needed.
The process usually looks like this:
- Choosing a bank. Compare the fees, the account terms, and where the branches and ATMs are.
- Preparing your documents. Take your passport, your immigration documents and proof of address.
- Filling in the application. The bank will ask for personal and tax information.
- The opening deposit. Some accounts require a minimum amount to open.
- Getting the card. A debit card may be issued in the branch or sent by post.
- Setting up online banking. Once the account is active you will be able to manage it through the app or the website.
Read the fees and the terms of service carefully before signing anything.
How much it costs to open an account At many banks there is no separate charge for opening a checking account. Various fees may be charged once the account is open, though. A bank may set a monthly maintenance fee, an overdraft fee or a charge for using other banks' ATMs.
When choosing an account, look not only at what it costs to open but at what conditions let you avoid the monthly fee.
A bank may waive the fee, for example, if:
- wages are paid into the account regularly;
- a certain minimum balance is kept;
- the customer meets other set conditions.
Routing number and account number
Once the account is open you will get several important details. The account number is the number of your bank account. The routing number identifies the bank and is used for certain domestic payments and transfers.
An employer often needs these details to set up direct deposit. They may also be needed for certain automatic payments. Do not confuse the account number with the number on your debit card — they are different things.
How to get paid
One of the most convenient ways of being paid in the United States is direct deposit. The employer transfers the money straight into your bank account. To set up direct deposit you usually have to give your employer your bank details.
Once it is set up, your wages will arrive automatically, with no need to collect and cash a paper cheque. If you have only just opened the account, ask your employer exactly when direct deposit will start working.
Does a bank account affect your credit history An ordinary checking account does not in itself build a credit history the way a credit card or a loan does. Even so, having a bank account is an important part of a person's financial infrastructure in the United States. Once you are comfortable with the banking system you can look into products that help you start building a credit history.
For example:
- a secured credit card;
- credit-builder products;
- certain other financial products.
Do not take out a large number of credit products straight away. It helps to understand the fees, the interest rates and the rules of use first.
What to do if the bank turns you down
Being turned down by one bank does not mean you will be unable to open an account in the United States. The reason may be missing documents, an address that cannot be confirmed, or the internal requirements of that particular institution. If you are refused, ask them to explain which documents or details are needed for the application to be considered.
After that you can approach another bank. Comparing requirements matters especially if you do not yet have an SSN or a permanent American address.
Keeping your account safe
Once the account is open you have to be careful about protecting your financial information. Fraudsters may try to get access to your online banking, your card or your confirmation codes.
You should never tell anyone:
- the password for your banking app;
- your PIN;
- one-time confirmation codes;
- your account login details;
- other confidential information.
It also helps to turn on notifications for every transaction. If you get a message about a suspicious payment straight away, it is far easier to contact the bank quickly and act.
International transfers
For immigrants, being able to send money to relatives outside the United States can be an important feature. Before opening an account it is worth finding out whether the bank offers international wire transfers and what they cost. Fees and terms can differ noticeably from bank to bank.
Pay attention to:
- the fee for sending;
- any fees the receiving bank may charge;
- the exchange rate;
- how long the transfer takes;
- the recipient details required.
If you are going to send money abroad regularly, it makes sense to compare several banks and specialist services. Do you have to pay tax on money in a bank accountSimply having money in a checking or savings account does not mean the whole sum becomes taxable income.
Certain kinds of income connected with the account, though — interest, for example — can have tax consequences. In addition, separate tax and financial reporting rules may apply to people who keep financial accounts outside the United States.
If you still have foreign bank accounts after moving, especially with substantial balances, it is worth checking the IRS and FinCEN requirements separately.
Opening a bank account is one of the important stages of settling into life in the United States. For most people the first one is a checking account, used for receiving wages and for everyday spending. If you need one, you can also open a savings account for your savings.
Immigrants should check the requirements of the particular bank in advance, especially if they do not yet have an SSN, a permanent address or other standard documents.
The main thing is not to choose a bank purely on the strength of the brand. Compare the fees, the document requirements, the terms of service, the availability of ATMs and the options for international transfers. Preparing your documents in advance will make opening your first bank account in the United States considerably simpler.
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