How to open a local bank account in USA

Which Bank?

Australia has 39 banks (plus a few dozen credit unions). Astonishingly. the United States has 6,799 banks. That is one bank for every 45,000 people, where Australia has one bank for every 650,000 people. The landscape of banking in America is vastly different to that in Australia - so be prepared for some shock. It can still take days for a payment to move from one bank to another, as many of the smaller banks have to route through a larger partner bank.

Wikipedia lists the largest 10 USA banks are:

1. JPMorgan Chase
2. Bank of America
3. Citigroup
4. Wells Fargo
5. Goldman Sachs
6. Morgan Stanley
7. U.S. Bancorp
8. PNC Financial Services
9. TD Bank
10. Capital One

So which one would you choose ?

From personal experience, Capital One allows foreign residents to open a local USD account with debit card only if they have a valid work visa and permanent address in the the United States. And even then, the features of the account will be very limited – such as only depositing up to $6,000 USD per month, no international transfers and manual authorisations of new transfers.

Also, every bank in every state has different policies. Bank of America in New York City required a copy of a utility bill showing my address, but Bank of America in New Jersey did not. So it is important to check with the actual branch when opening a new account.

A friend of mine who is in the United States for medical treatment needed to open an USD bank account and get a debit card. He and his family will be in the snow-covered mountains living like a local for at least 6 months – so it was impractical and very expensive to expect him to use his Westpac Credit Card for that time. He approached two different banks, and had the most luck with Wells Fargo – the 4th largest bank in the United States. He had to present his passport and a local address, and was issued with a local bank account with debit card. Interestingly, the address was simply the apartment building attached to the medical clinic where he and his family were staying, and was just needed for him to receive his debit card.

You have the account. Now what?

One you have you account open, and the bank has given you the ABA (or routing number) and your account number, then we can transfer your funds from Australia for just a $1 settlement fee. It will take up to 24 hours to get the funds from your account here into the USD account, but then you will be living and shopping like a local.

A colleague of mine recently moved to United States for work. She chose Capital One for her account and then transferred her money using Instant Global Payments. The $25,000AUD she transferred to her Capital One account converted to over $18,000 USD, where if she used her local Australian bank, she would have only received $17,100.

SMS Payment Confirmation

SMS confirmations, also known as Two Factor Authentication (2fa) is vital and should be mandatory for all bank accounts. However, when you travel overseas, you may lose access to your 2fa system. A friend of mine recently travelled to a new country and purchased a local sim as he was planning an extended stay. His next step was to transfer money from his Westpac bank account to his newly opened USD bank account. He had no way of retrieving the Authorisation Code, as Westpac was sending it to his Australian SIM card, which was no longer active. Also, the same could apply if you are using an App (like ANZ Shield or NAB Connect) as you may have to use a new phone in your new country.

So what to do ? If you are too late, and already left Australia, then you will have to find your bank’s international contact number and wait on hold for a while as you try to sort it out. It will be time consuming, as the bank does not want to fall victim to a scam where your money is sent to a stranger.

If you are yet to leave Australia, I suggest paying a visit to your local bank where they can advise you on the steps needed for their 2fs to continue working when in a new country.

What if I am not yet in the United States?

If you are planning to open an account before you arrive, I would have to say that your chances are slim. Pretty much all the banks we know need you to present yourself and your passport in the local branch. Some need to also see your current local Australian bank account and debit/credit card as proof of existence in the global banking network.

Personal or Business account ?

Everything so far has been focused on a personal bank account in the United States. A business account may be a little easier to obtain – even without being present in the United States. Why is that so ? Well, if you have already have everything in place to open, operate and report on your US business, then you could appoint a proxy to open the account for you. I am not an expert in this area (or anything else to do with USA bank accounts), but contacting Delaware Agency could help you greatly. They offer packages to setup your local USA Company, and then can assist with the opening of a USA bank account.

What about Europe ?

Europe is something completely different, and I will leave that for another article.