How To Open a Bank Account in the United States of America

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How To Open a Bank Account in the United States of America

Whether you’re an international student or a foreign business owner aiming to achieve the American dream, you will need to open a bank account in the United States. Banking regulations and restrictions in the USA are very different from the rest of the world. So, we thought we’d help out by answering a few common questions. 

Can a Foreigner Open a Bank Account in the United States?

Immigrants and non-residents tend to have a hard time opening up a bank account in the States due to tight restrictions and a lack of a Social Security Number. One way to work around this is by registering yourself as a U.S. business and opening a corporate account. This is not an easy process and can take a few weeks. It would be beneficial to set up a US LLC card as well, to avoid getting taxed on your business.

Can I Open a Bank Account in the United States From Abroad or Online?

The short answer is no. There once was a time where you could open an account remotely with ease. Unfortunately, that time is gone – American banks have implemented very tight regulations. You will need to present yourself in person in order for them to review documents and set up your account.

What Do I Need To Open an American Bank Account?

There are general guidelines that vary from state to state so your best option would be to walk into or call the nearest branch to figure out which specific documents they do and don’t accept.

Typically speaking, you will need to provide:

  • Multiple pieces of ID (passport, license, etc.)
  • Proof of address
  • Social Security Number
  • Any immigration documents
  • References
  • Proof of employment & income
  • Tax ID (for businesses)
  • Operating agreement (for businesses)
  • Letter of good standing from the previous bank

If you’re an expat in the country, call the bank in advance to figure out what specific identification pieces they can accept from you. Not all pieces of foreign ID are recognizable by American banks. The same goes for documents that prove your address.

How To Open a Bank Account in the United States of America

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Which American Bank Best Suits My Needs?

There are over 100 banks in the United States with a mix of private, public, commercial and investment institutions. This may seem overwhelming at first glance. We’ve put together some of the most reputable banks in America and what you can expect to be asked for when opening a bank account. The “Big 4” banks that the U.S. is primarily dependent on are J.P. Morgan Chase & Co., Bank of America, Citigroup and Wells Fargo. However, TD and HSBC have also been very proactive banks for their clients.

TD Bank 

Toronto Dominion (TD) is a Canadian multinational bank with a highly esteemed reputation for being easy, straight-forward and friendly. TD has even been said to beat out J.P. Morgan Chase & Co. in terms of quality and investment potential. Transactions tend to be very smooth at TD branches and their employees are very helpful, satisfying customers all over Canada and the United States.

Security at TD tends to be very diligent so it wouldn’t hurt to bring additional documents that you feel help prove your identity. This bank entertains monthly fees for basic debit cards and savings accounts that collect interest.

Although TD is a trusted bank across North America, it has seen its fair share of controversial incidents. In 2012, courts found the bank liable for $1.4 billion in fraud. In 2015, the Halifax examiner reported that TD had donated $50,000 towards anti-LGBTQ rights in the United States, which was quite contentious seeing that the bank stands as a proud sponsor of over 40 LGBTQ pride events across North America.

Two years later, in March 2017, CBC reported that TD employees admitted to increasing Visa credit card limits, lines of credit and overdrafts within their clients’ accounts in an attempt to meet sales targets. They lost 5.55% in stock value following this incident, declining by $3.88 per share.

Bank of America 

This bank operates in every single state and is a huge entity in the banking industry. Bank of America was once called the Bank of Italy based in San Francisco, before expanding into California, then into the rest of the world. They serve approximately 46 million clients and have been highly successful through a series of acquisitions, including Countrywide Financial and Merrill Lynch — saving these businesses from bankruptcy.

However, in 2010, the U.S. government charged the Bank of America of fraud regarding schools, hospitals, and other government institutions by authorizing illegal actions regarding proceed investments from municipal bond sales. The bank agreed to pay $137.7 million to organizations that were affected to settle the allegations and still continues to serve customers to this day.

There was another incident in August of 2014, in which the government accused the bank of selling toxic mortgage-linked security and faulty loans. They were forced to pay nearly $17 billion; $9.65 billion going towards fines, $7 billion in relief to those directly affected. There was over $700 billion worth of damages among 11 million home-owners as a result of this incident, and their funds have been described as merely a “drop in the bucket,” for those who were affected.

Citigroup Bank 

This is a multinational investment bank based in New York City. Citigroup currently holds the title of the fourth largest bank in the United States. This is also one of the nine among the “Bulge Bracket,” a group of 9 providers that make up the most influential multinational banks that can’t afford to fail, as the very fabric of the global economy is dependent on it.

Citigroup Bank (also known as Citibank and Citi) provides for over 200 million people worldwide in over 160 different countries. The bank once employed approximately 357,000 employees but reduced in size to 209,000 following the global financial crisis of 2007.

How To Open a Bank Account in the United States of America

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J.P. Morgan Chase & Co. 

J.P. Morgan Chase & Co. is a global behemoth of a bank, being the largest in all of America (and sixth largest in the world) with total assets at an astonishing 2.6 trillion US dollars, and the biggest bank in history with respect to market capitalization.

As you may have guessed, this is an investment bank headquartered in New York City and generally nurtures a corporate and capitalist culture of “safe and profitable growth”. In early 2000, the Chase Manhattan Corporation merged with J.P. Morgan & Co., creating J.P. Morgan Chase & Co.

The Chase part of the company deals with credit cards, retail and commercial banking in the U.S and Canada while the Morgan brand itself takes care of investment banking, private banking, asset management, wealth management as well as security and treasury services. As of 2017, the bank has over $30 trillion of assets in custody and $47.7 billion under management.

Wells Fargo 

Wells Fargo is an American multinational bank based in California and has penetrated throughout the rest of the United States. It is the second largest bank in the world in terms of market capitalization just under J.P. Morgan. With respect to total assets, it is the third largest bank in the United States with $1.952 trillion in assets as of 2017.

Wells Fargo bank provides community banking, consumer lending, private student loans, wholesale banking, equipment banking and wealth and investment management.

Although this is a very popular bank in America, they entertain a massive spectrum of less than favourable legal controversies, such as violations of credit card laws, tax avoidance and lobbying, prison industry investment, failure to monitor money laundering, account fraud, higher fees towards African-American and Hispanic customers and gun industry connections. They are also the top investor in the Dakota Pipeline project.

HSBC Bank of America

HSBC is another multinational bank that serves millions of people as one of the largest financial institutions in the world with over 7,500 offices in over 80 different countries. If you are a foreigner, you will need to provide this bank with a non-citizen ID number (along with an expiration date);  if you do not have this you will most likely have to fill out a W-8 or W-9 form.

International Transfer Fees 

When opening an account in America, it’s important to remember fees and charges come with sending and receiving money. Many US banks subject your payments to various fees, such as service charges and percentage deductions. Many banks dip their hand in the bag by offering you unfair exchange rates and taking their own profit from your transfer.

You can avoid these costly fees by getting set up with an alternative cross-border payment platform like REMITR. A company like REMITR offers you the real-time market exchange rates with no additional service fees apart from a $5 flat fee to make a business payment.

REMITR also provides payment collections facility against your invoices. Get your own Remitr Collect Account that comes with bank account numbers in the US and Europe. Your customers can pay into these accounts without having to do any wire transfer. This means saving on payment fees for them and saving on receiving fees for you. Making payments from the Remitr Collect Account or withdrawing receipts to your own bank account takes just 1 business day.

Getting started with REMITR is easy. All you need to do is register online and you’re all set to go. Contact us today or directly Register for REMITR business payments to experience the joy of fast and low cost international payments.