Opening a US Bank Account
If you’re heading down south to the United States for a new job, school or just to live in a new environment, then you’ll want a bank account to make it easier to handle your financial matters. It can be a little tricky and confusing to open a bank account, especially as technology advances and more ways open to commit fraud and money laundering. Luckily, tricky doesn’t mean impossible, and there are definitely ways for you to open a US bank account.
There is a lot to consider when it comes to opening up an account in the United States, however, there is one easy way for Canadians to open up an account even before they leave. It may not be ideal long-term as you’re actually living in the country, but before you get there and as you make the transition a Canadian U.S. bank account is a good start. RBC, for example, has a Cross-Border account under the name RBC Bank (rather than RBC Royal Bank) that allows Canadians to easily open an account in U.S. funds, take money in and out of designated ATMs in the States without fees and to easily transfer your money back and forth between your Canadian and U.S. accounts. This is a great start for those who haven’t made the move yet (and those who frequently travel to the States) and want to have something ready before they get there.
Once you’re actually in the States and want to open an account with a dedicated U.S. bank, your main options are to go online or to actually go to a branch. If you’re totally new, you’ll probably want to go in-branch as you can begin to develop a rapport with your bank and get help setting everything up. Without a real credit history or much of a history in the country at all, there won’t be much of a trace of you for the banks to find as well. That makes it tough to do it online, another reason you’ll want to go in-branch.
You’ll want to go online first and check out all the different banks, read reviews, and see what deals and benefits each one has to decide where you want to bank. Most banks have all the information available online as well, so you can see how much they are and where you want to go beforehand. It’s a good idea to call ahead to not only set up an appointment but make sure you know what you need to bring, as each state and bank may vary slightly. Some key items to bring include a key piece of government identification like a passport, identity card or driver’s licence, your social security number, proof of address and your proof of immigration documents. Some of these you may not have if you’re new, so you’ll want to make sure you know exactly what you need so that you can go and get them first before you just head over there. The documents you need will change as well depending on why you’re in the country, because being a student may require you to bring proof of enrollment documents, or they be applicable substitutes for certain items. The country you’re immigrating from may play a role as well, so gathering as much information before you head over there is critical.
As noted earlier, banks are always looking for ways to clamp down on fraud, money laundering and other criminal activity related to money, which is why you may be required to prove where your money is coming from. It may sound like a hassle, but it’s sometimes a necessity and is something to considering to choosing where and when you apply. Tax returns, pay stubs, invoices and other documents may be used to prove your money is all legit and legal.
Similar to the Canadian U.S. accounts that RBC Bank and others provide, many international banks offer U.S. accounts as well and can set you up with an account. If you already have an account with one of these banks, it’s generally much easier to open a U.S. account as you already have a history with them, and they know you. However, some international accounts have tougher rules and requirements, and may not be best for you in the long run either.
An alternative option to opening up a bank account in the United States (or a side to having one of the Canadian U.S. accounts) is to use Knightsbridge Foreign Exchange. KBFX isn’t a bank, as we are an exchange provider that offers the best currency exchange rates in Canada, but we do provide the best currency exchange services, which includes payment services that will give you the best USD exchange rates in Canada and handle your payments for you. For example, if you’re buying a house in the U.S. you can make all your payments through KBFX, maintaining the best USD exchange rates in Canada no matter how they fluctuate week to week or month to month. We’ll keep a detailed record of all payments and transactions to ensure you never lose track of what you’ve paid so far or what’s coming up.
When it comes to deciding what bank is for you, it can be a tough decision as there are so many options available for you. With so many similarities, yet key differences, deciding which bank to go with can be a tough decision. The easiest way to start is by looking at the four biggest banks in the United States and moving on from there.
You can start with the biggest bank in the United States, which also happens to be the sixth largest globally, and that’s JP Morgan Chase. JP Morgan Chase has tens of thousands of ATMs across the country, and one of the biggest names in the financial industry. Even here in Canada, you’ll find many stores and vendors use Chase POS systems to receive payments by credit or debit card. Chase bank has it all, with student accounts (that are valid for up to 5 years), business accounts and more! With standard features like mobile banking, online banking and visa debit cards, Chase has it all and it may be the option for you.
Bank of America is next, providing a lot of the same features that Chase has, with a basic account charging around $10+ per month unless you can reach a designated monthly minimum deposit amount each month. In that case, you can have the fee waived, and with it as low as around $250, it should be attainable for anyone working, or even students. As is a common standard, you’ll also get a visa debit with Bank of America, making it easy to shop online without having to worry about credit and the issues that can come with that. While there may not be a specific student account, there are some student benefits on some accounts. There are a couple options for businesses too, one that is free of monthly fees and basic, or a more comprehensive and expensive option as well.
Citibank is next up, having a unique account that doesn’t require a minimum deposit to open (as is often standard for even the most basic bank accounts. Many accounts will offer overdraft, another common feature, but what might be appealing is the Citibank exclusive access one can get for many concerts, movies and other entertainment events. Despite not having dedicated student accounts, the special access might be enough to incentivize students, young adults and others.
Wells Fargo is the last of the big 4 U.S. banks, starting at low prices with student discounts to make it even cheaper. Just like the others, you’ll be able to get a visa debit, online and mobile banking options. Similarly, to the others, you’ll find multiple business accounts as well.
These are just the four major banks in the United States, but there are others out there that you may choose to consider. Take Capital One, for example (who provides credit cards in Canada as well). Capital has tens of thousands of free-to-use ATMs across the country, providing easy access to cash wherever you are. With Capital One there are no monthly fees, and no minimum deposits, plus you can earn interest by keeping money in your account yearly.
Another of these smaller banks is the Bank of Internet USA, which is an entirely online bank with no physical branches or locations. Like Capital One, there are no fees and the potential to earn money off interested based on how much is in your account. These are just a couple examples of banks outside the big 4 that you may want to use. The benefit of looking at smaller banks like Capital One and Bank of Internet USA is they tend to have lower fees and more benefits as they try to compete with other banks for your business. They want you there, and moreover, they need you there, and the benefits can be felt in multiple ways.
When it comes to banks, there are several different types of fees and costs that come with them, which can add up quickly if you aren’t careful. First up are the monthly bank fees that most charge. Some have different ways to remove those fees, but for most accounts, you’ll have to pay each month to use it. Some banks also charge to send you your statements and messages in the mail, as they try to convert everyone they can to go online.
Then there are the fees that come from using an ATM. If you use an ATM that belongs to another bank, there’s a fee for it, while it’s generally free to use your own bank’s ATM. However, there are certain accounts (like online accounts) that will charge you for using an ATM, even your own bank’s ATM. Then there are the fees that come from withdrawing overseas or in another country, as each individual bank and account will determine whether or not there are fees.
An important thing to note when withdrawing money overseas is to consider what currency it’s in, as you may be subject to a bad exchange rate. If you need money to go overseas, you can use Knightsbridge Foreign Exchange to get you the best currency exchange rates in Canada. And, because we’re entirely online, if you’re on an extended trip, you can even do the exchange while in another country!
For some banks/accounts, there are also fees your uses of the human bank tellers. Depending on the account, they may be entirely free, you may only get a designated number of free ones per month, or every use comes with a fee.
Most banks in the United States have a minimum amount of days you must keep it open, and if you request to close it before then, you’ll be subject to a fee for closing early.
As mentioned with withdrawing in a foreign country, if you’re looking to send money overseas, you may be subject to large fees on international transfers. If you need to send or receive money from overseas, you can use Knightsbridge Foreign Exchange for your transfer. At KBFX not only are you not subject to the large fees from your bank, you’ll also get the best currency exchange rates in Canada, including New Zealand Dollar (NZD) to Canadian Dollar (CAD). This makes it easy, cheap and convenient to use KBFX for all your international financial needs!