Opening a bank account in America as a non-resident alien

This used to be really easy: pick a big bank, check that they opened accounts for non-residents, then pop your application in the post.

Post 9/11 though the Patriot Act is with us and it imposes such stringent “know your customer” regulations on the banks that it’s no longer possible to open an account online with any American bank if you are a foreigner and don’t live in America. However, that doesn’t mean that you can’t open accounts with American banks, just that you can’t do it online anymore.

So what are your options if you find yourself in need of an American bank account yet don’t actually want to visit America to open one?

There are three basic options that are known to work:

1. Form an American company and then open the account for it. This option is obviously a bit over the top if you’re only making $50 a month from your online empire although it’s probably the best way to go if you’re making a living online.

2. Try opening an account with a bank that operates both in America and your own country. The two most common options for this are HSBC and Citibank as they seem to operate in more countries than most.

3. Open a brokerage account with one of the brokers catering to non-residents.

In practice, the third option is by far the simplest for most people. Most American brokerage firms operating overseas cater exclusively for high net-worth clients (ie assets of $100,000 and more) but two offer accounts for the masses. Schwab has a minimum of $10,000, Etrade has a minimum of $1,000 although you can open it with zero cash upfront.

How come the brokers can manage to give you a bank account when nobody else seems to be able to? Simply because the brokerage outfits operate as integrated international organisations whereas the banks don’t (eg Citibank USA isn’t the same as Citibank UK).

The etrade account is free for the first 12 months. After that, it costs $40 per quarter unless you meet their requirements which are either 1) $10,000 balance or 2) $1000 in automated credits per month or 3) one share trade during the period. If you don’t have the $10k and don’t have the $1k going in, then it is cheaper to buy or sell some shares than pay the $40.

The second option isn’t quite so popular mainly because it isn’t as well known. The easiest way is if you have a premium account with either Citibank or HSBC in your own country as your relationship manager will be able to do it for you. These services are CitiGold and HSBC Premier but the downside is that the rough requirements for them is that you have $50,000 on deposit with them, or have an income of $75,000 or have a mortgage of $200,000 with them (roughly; the requirements vary depending on the country).

Next easiest (and more economical) is to phone Citibank or HSBC in America and they’ll open an ordinary account for you on presentation of the appropriate ID and, sometimes, a bank reference. Citibank seems more geared up for this: call their International Personal Banking people on 001-813-604-3000

That’s just saved you between $5 and $250 which is about the going rate to buy the relevant information as above. Swiss bank accounts are slightly more difficult but definitely not worth paying the $1000 or more that I’ve seen quoted to provide you with the information. I’ll be covering Swiss banks in a later article, but if you can’t wait, pop a comment on this post and I’ll pass the information on to you (free!), likewise for other countries.

Don’t forget though that the first question you should ask yourself is: why do I need an American bank account? Google will only make payments into an American account if you live there and Citibank offers a US$ account in the UK (and other countries) which will let you deposit US$ cheques free of charge. It’s really only Paypal that requires such an account and even then that’s only if you live in one of the countries for which they don’t support withdrawals direct to your bank account.

This is part of our series on international banking which covers how to open and use accounts in various jurisdictions around the world including France, Switzerland and various offshore banking centers such as the Channel Islands, Isle of Mann and Bermuda.

An updated version of this article is on our expat banking site which also includes access to the detailed opening instructions that many people have asked for.

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