All you need to know about opening a US bank from India as a non-resident

Moumita Basu -

Let's see. You plan to go to the U.S. for your higher education or first job. So naturally, this has got you thinking about your finances. It is natural for anyone new to feel overwhelmed with everything new around them. But opening a bank account offers security for your funds and a way to begin creating a financial footprint in the country. While it might look like a daunting task, we are here to guide you through it. Our blog will provide answers to some of the most frequently asked questions like, 'can a non-resident open a bank account in the U.S.?', 'What is the quickest way to open a bank account for a non-resident in the U.S., 'How long does it take to get a functional bank account in the U.S. for a non-resident?", so on and so forth. This blog will also provide you with information regarding selecting a suitable bank account, applying for one, and getting benefits from a bank account in the United States.

Types of bank accounts in the U.S. ‌

You can open a bank account either as a checking or savings account. If you opt for a checking account, the bank will provide you with a checkbook and a debit card, and it can be used to deposit and withdraw money when you want to.‌

‌You will find a savings account helpful to save money for emergencies or annual payments. This account pays you yearly interest, and it gets added to your principal every year or quarter. But this interest rate is not fixed and varies from bank to bank. The average interest rate offered on the U.S. savings account ranges from 0.01% to 0.05%. Comparatively, Indian banks offer much higher interest on a savings account, ranging from 2.5-6%, and a select few offer up to 7%.‌

‌Checking account

A checking account is a type of deposit account you can open at a brick-and-mortar bank, credit union, or online bank. Some non-bank financial institutions also offer checking accounts to customers. Checking accounts are primarily used to hold funds you plan to spend or use to pay bills. This typically comes with a debit card for making purchases or cash withdrawals. It's essential to keep in mind that checking accounts aren't all alike regarding the features or benefits they offer. Banks can offer multiple checking accounts options designed to fit various banking needs, including children, teenagers, senior people, interest checking, and rewards checking. A basic checking account is generally the most common option you'll find, and with that, you will be able to spend using a debit card, pay bills online or via paper check, and transfer funds to or from linked accounts. If you are interested in checking accounts, decide if traditional or online banking makes the most sense. If branches don't matter to you, opt for an online checking account. ‌

‌Savings account

It is a deposit account primarily used to hold money that you don't plan on spending right away. Most savings accounts come with interest on deposits, but high-interest rates and annual percentage yield varies from bank to bank. Like checking accounts, savings accounts might have a minimum balance requirement and monthly maintenance fees. But they typically don't come with a debit card or ATM card, and you usually can't write checks from them. Savings accounts aren't designed for everyday spending or paying bills. These accounts are limited to six withdrawals from a savings account per month. They are also suspended indefinitely to make savings more accessible for people struggling financially due to the Covid-19 pandemic. Suppose you plan to open a savings account set aside some money for short- or long-term goals. Consider the kind of savings account that works best for you. Standard or basic savings accounts from traditional banks can earn interest, though you're more likely to pay a monthly fee if you're opening one of these accounts at a conventional bank. An online bank usually charges zero fees or lesser fees and offers higher interest rates. High-yield savings accounts often provide a significantly higher APY than the national savings APY, depending on the bank.‌

Money market accounts

Money markets accounts (MMA) combine the features of savings and checking accounts into a single deposit account. A money market account typically allows you to earn interest on balances, and it can also offer check-writing and debit card access for spending or bill payments. Like savings accounts, money market accounts are subject to Regulation D, which means you'd be limited to six withdrawals per month under normal circumstances. Keep in mind that banks can charge an excess withdrawal fee for going over six withdrawals even while the rule is indefinitely suspended. MMAs have higher initial deposit limits to open and higher minimum balance requirements to maintain. A money market account, for example, may require $1,000 or more to open, while a savings account may require no minimum deposit.‌

Certificate of deposit accounts

These accounts are also known as time deposit accounts. CDs can be good for the money you don't think you'll need right away when it comes to savings. When you open a traditional CD, it is understood that you will leave your savings in place for a set period. This is known as the maturity term, and during this time, you will earn interest on your balance. Once your CD matures, you can either withdraw your initial deposit along with interest earned or roll the entire amount over to a new CD. Banks offer many CDs with terms as short as 28 days or as long as ten years or more. Generally, a longer-term means a higher APY. ‌

The Basics ‌

‌While a non-resident is permitted to open a bank account in the United States, the rules vary quite a bit. The 1964 Civil Rights Act explicitly gave private businesses in the U.S. the right to contract with foreign individuals or groups, making it easier for new residents of the U.S. to bank there. ‌

‌Under the act, banks and credit unions have to follow a strict set of guidelines while verifying any application from someone who is non-American. However, the act was passed before 9/11 happened. Since then, it has become more difficult for foreigners to open accounts, engage in monetary transactions, or even conduct business with American financial institutions abroad. ‌

‌Requirements for opening a bank account ‌

‌The bank you are applying to may want you to have-

  • Contact information, like name, address, and phone number
  • Government-issued ids, such as a passport and a valid driver's license
  • Utility bills with current address
  • Postal address in the U.S. for delivering the credit card. If you are a student, provide your hostel address.
  • Permanent address as per your passport
  • Passport
  • Form I-20 or form I-797
  • Alternate ID proof like College ID or your birth certificate
  • Cash amount for the first deposit

The ideal scenario is to open an account and get a U.S. credit card from India before you travel since this will save you a lot of time, effort, and documentation after you land. But these requirements may vary, depending on the state or the financial institution. Also, whether you are a U.S. citizen or not, you have to be 18 or older to set up a checking or a savings account. Therefore, it's best to open a U.S. bank account as soon as possible. ‌

‌Best banks in the U.S. for Indians ‌

‌Zolve

Zolve is a neobanking startup tied up with the U.S.-based Community Federal Savings Bank (CFBS), which provides credit cards to Indians going to the U.S. for higher studies or employment. For people who have a credit history in India but none in the U.S., Zolve provides a credit card by taking the user's credit history and other parameters to issue the card. Zolve credit card comes with no annual fee a high credit limit and can be used across continents with no foreign transaction fees. The best part? Zolve credit card doesn't require SSN or U.S. credit history. For documentation purposes, you need to provide basic information, visa, and passport for identification.

Bank of America

The Bank of America offers its customers checking and savings accounts, home loans, auto loans, credit cards, small businesses, and student banking. But, to apply for a Bank of America credit card, you need an SSN and need a high credit score for a specific limit.

Amex

For American Express or Amex credit cards, a person who is a resident Indian, a non-resident Indian (NRI), Hindu Undivided Family (HUF), or a foreign national can open a savings bank account. Minors can also apply and open a savings account, but it will be a minor account. Except for little account holders, all the other persons who want to open an account must be over 18 years of age. Non-Individual Entities like Firms, Companies, Trusts, associations, etc., are not eligible to open a savings account.

Citibank

If you are a non-resident Indian (NRI) thinking of opening a bank account with the U.S., you must consider that they require a higher than minimum balance compared to other Indian banks. An NRI living outside India for more than 182 days/ year can open an account with Citibank. Unlike other banks with dedicated NRO and NRE accounts, Citibank offers detailed accounts like Preferred and Citigold. The primary difference between the two is the total value of the required relationship balance in the account. At the same time, Citigold has additional benefits and privileges and what the Preferred accounts offer. This includes things like access to domestic and international lounges, travel benefits, and access to Citigold Business Centres. ‌

Select a bank ‌

‌There are many Indian banks in the U.S., each with its unique benefits and disadvantages. Hence, choosing a bank that best suits your requirements is crucial. Credit history in the U.S. is critical. Opt for banks that provide zero or minimum charges. Banks that provide ATM services near your university, residence, or workplace are also a plus. ‌

‌‌Visit the bank physically.‌

‌While you can apply for a U.S. bank account from India, you are bound to face some hurdles since you are not a citizen. Some financial institutions might ask for your SSN, which is only issued to citizens of the country. Hence, it's advisable to visit the bank, and Zolve can help you apply for a U.S. bank account from the comfort of your home while you are still in India. ‌

‌Fill out your application form properly‌

‌Once you have applied to open a bank account, you will be provided with an application form. You must provide accurate information. Upon submitting your application, the concerned staff will verify your information. If the bank gives your application the green light, they will contact you, and your account will be active and ready to use. ‌

‌Opening an account from India ‌

‌Opening a bank account in the U.S. as a non-resident was impossible to even a few years ago. But, due to the joint efforts from private companies and the collaboration between the Indian and the U.S. government, people migrating to the U.S. for the education of work purposes can now open an account without too much hassle. ‌

‌Zolve's neo banking facilities help Indian immigrants with cross-border banking services. We will help you open a bank account in the U.S. and help you with all your banking needs through phone calls real-time updates, along with providing the lowest banking fees and processing charges in the market. ‌

‌Importance of SSN ‌

‌If you are a citizen of the United States of America, the government issues its people with a nine-digit number known as the Social Security Number (SSN). In the case of a permanent citizen or an immigrant, you can apply for an SSN. If you plan on working in the United States, you need a social security number. Additionally, SSN helps get a bank account more efficiently, and you can get a driver's license without too much hassle, etc. If you have already applied for it before reaching the U.S., expect to receive your SSN within three weeks of arriving. ‌

Why is the U.S. credit card so valuable?‌

‌Since the United States is a highly credit-driven country, having a credit card in the U.S. can be greatly helpful. Additionally, having a credit card enables you to have instant purchasing power in the country. Additionally, credit cards offer attractive rewards after a specific usage. Building your credit history is essential to getting yourself acquainted with the American economy. Your credit score determines a consumer's credit risk and decides if an individual is eligible for a credit card in the U.S. Exercises like paying your bills on time, using 30% of your credit limit, and having mixed credit cards will help you build a decent credit history. ‌

‌Being an immigrant in the U.S., you have to build your credit score from scratch. If you have a bad credit score, you might be denied privileges. But to make a credit history, you have to get access to one first. ‌Zolve will help you by providing credit cards from the start of your journey, depending on your credit score in India. We offer high-limit credit cards that will care for all your needs without hampering your credit scores. ‌

‌Features to keep in mind while applying for a U.S. credit card‌

  • Your card should be ensured by Federal Deposit Insurance Corporation (FDIC)
  • Better to use an unsecured credit card for maximum convenience and flexibility
  • It is advisable to spend only 30% of your credit card limit to build a decent credit history
  • Annual charges levied on the card ‌

International charges and others‌

‌Since you are a non-U.S. resident applying for a U.S. credit card, most banks will include some form of charge. Therefore, keep an eye out for the extra charges on your bank statements. Zolve provides a credit card with the lowest banking fee and processing charges. Our cards are tailored for Indian students and working professionals Immigrating to the U.S.A.‌

‌‌A lot of this can be understandably overwhelming, but Zolve is here to take care of your worries. We take care of all your U.S. banking requirements while you are present in India by helping you in setting up a bank account in the U.S. and a virtual U.S. credit card. Our credit cards are designed mainly for Indians going to the States. Zolve offers low-interest rates, zero annual fees, and attractive rewards. Once you arrive in the U.S., you'll be greeted with a brand new Zolve credit card at your doorstep. ‌

‌Benefits of opening a U.S. bank account‌

‌‌As we all know by now, the U.S. dollar is one of the most widely used currencies in the world. Online e-commerce stores the value and accepts the U.S. dollar over any other currency. In this case, you might face a problem and have to convert your currency to U.S. dollars. Having a U.S. bank account can save you from this trouble and provide other benefits as well. ‌

‌Depending on the country you live in, if you have a U.S.-based checking account, it may help cut down on fees that you will have to pay. Monthly maintenance or annual fees, transaction fees, and international fees you may experience using payment gateways such as Paypal.‌

U.S. bank accounts typically earn more interest compared to their international counterparts, which means your money can grow more in a checking account in a U.S. bank compared to a checking account in your home country. Additionally, exchanging one currency for other becomes more affordable when you have a U.S. bank account. Other than that, companies that do business in the U.S. but are not based there would benefit significantly from a U.S. bank account, especially if they receive payment online. For example, PayPal prefers U.S. accounts that allow you to transfer money from your Paypal account into your checking using ACH transfers. Applying can be tricky when you don't live in the country, but it's not impossible. If you don't have one, you have to wait to receive a paper check in the mail, and it might take longer to process the money deposited into your U.S. checking account.‌

‌Frequently asked questions ‌

‌Can you open a U.S. bank account without an address?‌‌

Ans- Yes, you can. If you don't have an address, you can opt for a 'small account' by submitting recent photographs and a signature in the presence of a bank official. The process might be a bit complicated for non-citizens, but it's not impossible. ‌

Can a student open a bank account in the U.S.?‌

Ans- Each bank has different requirements, but generally speaking, international students studying in the U.S. But to open a bank account, you will need some form of documentation. If you are a student or working professional from India, you need to provide a copy of your:

  • Passport
  • Valid Visa
  • Your I-20
  • Proof of residency
  • An official letter or bill addressed to your U.S. address. ‌

Can we open a U.S. bank account from India?

Ans- Yes, Indians can open a U.S. bank account from India.

Can I open a bank account before traveling to the U.S.?‌

Ans- Yes, you can open a U.S. bank account from India. With Zolve, you don't need to have an SSN or credit history in the U.S. to apply for an account. Also, it takes under 5 minutes to apply with no hidden fees.‌

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