How to open a bank account as a non-US citizen

In a nutshell

Even if you're not a U.S. citizen, you can still open a bank account in the U.S.; however, you'll need to jump through some hoops to verify your identity and provide additional forms of identification.

• Getting your head around some financial basics, and gaining access to a bank account, is an important step towards getting your finances in order.
• It can help you become a more educated consumer and help you with milestone purchases in the future, such as getting a car or buying a home.

What is your resident status?

Before we go over the steps involved in opening a bank account as a foreigner, non-U.S. citizens who want to open a bank account are divided into two main groups:

• Resident aliens: A resident alien is a foreign-born resident who isn't a U.S. citizen. Resident aliens are also known as lawful permanent residents, or permanent residents.
• Non-resident aliens: A non-resident is not a U.S. citizen, which means they are not a lawful permanent resident of the U.S., and they haven't met the substantial presence test. (The substantial presence test is determined by how long someone has lived in the U.S.) Finally a non-resident alien hasn’t been issued an alien registration receipt card, which is commonly known as a green card.

Banks and credit unions have to stick to more stringent guidelines when it comes to verifying the identity of someone who isn’t a U.S. resident. In turn, expect to provide not only different, but also additional forms of identification, when applying for a bank account.

Here, we'll walk you through the steps to get a bank account as a foreigner.

1. Provide basic information

To open a bank account from a bank or credit union, you'll need to provide at least the following information:

• Name.
• Date of birth.
• Address.
• Identification number.

2. Provide required identification

Your identification number for a non-U.S. citizen can come from the following government-issued forms of ID:

• Valid foreign passport and country of issuance.
• Alien identification number from a green card.
• DSP-150, or Border Crossing Card, with photo.
• Other type of U.S. Visa.
• Consular identification (CID) card.
• Any other government-issue ID from your home country that shows proof of your nationality or residency. (It must include a photo.)

Some banks, like HSBC, also take online applications if you have lived in the U.S. for more than a year.

3. Provide secondary identification

Besides a primary form of identification, you may be asked to provide a secondary form of identification. This might include:

• Driver's license (foreign or U.S.).
• U.S. issued work ID badge.
• Debit or credit card from a major credit card network.
• U.S. State Department diplomatic ID.
• Student ID with photo.
• Recent bank statement from another financial institution.

4. Show proof of physical address

Besides proper identification, a bank will require you to show proof of your physical address. Common forms of verification include:

• A utility bill with your name or address.
• A letter addressed to you.
• If you're employed, paystub with your home address.
• If you're a student, an official letter from the university, or student loan document with your home address.

5. Fund your bank account

Depending on the bank or credit union, you'll be required to provide a minimum deposit. Not all financial institutions have a minimum deposit to open a bank account, so you'll want to look at the requirements.

Besides funding your bank account, you might need to pay a monthly maintenance fee. If that's the case, the bank might waive this fee if you keep a minimum amount in your bank account, opt for paperless statements, or if you maintain a minimum level of monthly activity.

6. Note the SSN or ITIN requirement

If you don't have a Social Security Number, you'll need to provide the bank with an ITIN, or an individual taxpayer identification number (ITIN). If you're required to pay taxes, but don't yet have an SSN, you'll be issued an ITIN.

Be aware of additional hurdles

If you're not a U.S. citizen and you wish to open a bank account, understand that there might be additional challenges. This might pop up due to whether or not your home country is subject to U.S. sanctions, the forms of ID you provided, your sources of funds, and any unusual account activity.

Why should you open a bank account as a foreigner

There are a handful of reasons why opening a bank account as a non-U.S. citizen can benefit you.

Your money is protected

If you have a bank account with a bank, the Federal Deposit Insurance Corporation (FDIC) safeguards your funds up to $250,000 per bank, per depositor, per ownership category. The NCUA (National Credit Union Association) protects funds in an account with a credit union. Having money in a bank account is also safer than walking around with a large amount of cash.

You can earn interest

Depending on the bank or credit union's rates, you can also earn a bit of interest on the money in your bank account.

Savings accounts generally have higher interest rates than checking accounts, and high-yield savings accounts and certificates of deposits usually feature higher interest rates than standard accounts.

You can direct deposit your paychecks

Another feature of bank accounts is the ability to set up direct deposit so funds from your paychecks are deposited directly into your account. Some financial institutions let you split up your funds into different checking and saving accounts.

Set up bill pay

Many banks and credit unions offer the option to pay bills directly from your account.

Mobile deposits

Another convenient feature of bank accounts is that you can deposit checks directly from your bank's mobile app.

Access to other financial products and services

Once you establish a bank account, you might have an easier time getting approved for financial products and services from that bank, such as car loans, mortgages, and personal loans.

You can transfer funds to other apps or payment platforms

Having a bank account can make it easier for you to make purchases on payment platforms, like Venmo and PayPal. You can also move money between bank accounts, both within the same financial institution and outside financial institutions.

Alternatives to opening a bank account as a foreigner

Prepaid debit cards

You can load a prepaid card and use it anywhere that the credit card network is accepted. While it's convenient, and you don't need a bank account to get one, prepaid credit cards usually come with fees. There's usually a one-time fee to open the card, and then a monthly maintenance fee anywhere from $10 to $15. There are also usually foreign transaction fees, reload fees, and ATM fees.

Check-cashing service

A check-cashing service is a brick-and-mortar location where you can get your checks cashed. This includes government assistance checks, tax refunds, personal checks, and paychecks. There is a fee involved, and it can be a flat fee.

Remittance service

A remittance service allows you to transfer funds to individuals or businesses in another country. Financial institutions, and companies like Western Union, MoneyGram, and Ria, offer these international money transfers. The fee varies, but, on average, a remittance service can cost 6.20% of the amount sent. For example, if you send $2,000 overseas through a remittance provider, the cost is $186.

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Opening a bank account as a non-U.S. citizen does mean you’ll have to jump through a few more hoops to prove your identity. But hurdles aside, the benefits of a bank account can far outweigh the additional steps required to open one.