When you come to the United States as an international student, you're greeted with a mountain of paperwork required by both your school and the government. With so much to think about, it's often easy to forget about setting up an account with an American bank. While it may seem more trouble than it's worth, opening a bank account in the U.S. will make your life significantly easier.
How Does Having a U.S. Bank Account Help Me?
A bank account in the U.S. will enable you to conduct business more quickly and with fewer fees. For instance, when you need to pay bills or make deposits in the U.S. with an account that you own back home, you'll probably run into wire transfer fees each time you make a transaction. An international transaction fee may apply, as well as a currency exchange fee if your money is held in a different denomination. The same transfers made between two U.S. accounts don't involve those fees.
Having an account in the same country also reduces the amount of time it takes for funds to arrive where you send them. The processing for international transactions follows different procedures than domestic transactions, and in a pinch, a few days of delay can make a big difference to your life. Consider the difference between a typical international transfer done through the SWIFT system, which takes around 3 to 5 days, and a domestic U.S. wire transfer, which typically makes funds available in one business day.
If you receive any stipends or paychecks from an organization in the U.S., your domestic bank account is an ideal place to receive those deposits. Whether you receive checks or have the opportunity to arrange direct deposits, having an American bank account makes it much easier for such organizations to figure out how to make those transfers to you.
How Do I Open a U.S. Bank Account?
The toughest part of opening a bank account is getting U.S. banks to understand your status as an international student. Since it's unusual for most banks to see customers from abroad, you may encounter staff who aren't quite certain how to handle your situation. The best line of approach is to call ahead and arrange a meeting with a banker to discuss the process in person. Some banks have better procedures in place for international customers than others, and talking to their staff should help determine the difference.
You should also prepare the documents you'll need to establish your identity and status in the country, starting with your passport and photo ID. Many banks also require a secondary form of identification that proves your enrollment in an educational program or shows your current residency status. Tuition bills, utility bills and school ID cards are common examples, although each bank has its own rules about acceptable documentation.
If your school or employer has a relationship with a bank, the process will go much faster, as the bank will already know how to handle your case. You can then select an account from the choices available with that bank instead of having to shop for banks on your own. If that isn't an option, another alternative to visiting a bank is to open an online checking account, which is accessible through the Internet or mobile apps.
What Kind of Account Should I Open?
When choosing an account, you should prioritize low account fees on monthly maintenance and international transfers. If you want free checking accounts, you should start by looking at online-only banks; if you prefer in-person services, prepare to pay some form of monthly maintenance fee. Fortunately, many banks offer accounts that let you avoid monthly fees if you can prove you're a student, or if you maintain a certain daily balance.
At the least, you should open a single checking account, although it may be beneficial to open a savings account as well. You can think of checking accounts as your everyday wallet: you use the money in this account by swiping your debit card, withdrawing cash from ATMs and writing checks. Savings accounts are meant to be a place to accumulate money for long-term goals or emergency needs. They often pay interest on the balance, and there are limitations on how often you can withdraw the money without penalties.
If you open a checking account and a savings account at the same bank, it's easier to set up services like automatic transfers from checking to savings. Many banks also offer overdraft protection, which lets you cover overspending on your checking account with protective transfers from your savings account. While it's possible to have accounts at two different banks, be careful of any extra transfer fees or technical complications when you try to connect the accounts across different institutions.
Finally, you should beware of early account closure fees. If you close an account too quickly - typically within 3 to 6 months of opening it - your bank may charge you a $25 fee. This makes it all the more important for you to open an account quickly. Always check the personal schedule of fees provided by every bank to see a list of the different charges associated with using your U.S. bank account.