Opening A Bank Account While Abroad: What U.S. Citizens Need To Know

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While carrying cash or your go-to credit card might be acceptable for those traveling abroad for a short time, if you’re planning on staying longer, you might want to open an international bank account. Here’s a rundown of when it makes sense to open one, and the dos and don’ts of banking overseas.

How to open a bank account abroad

Opening a bank account abroad requires you to: 

1. Consider what you need in a bank account. Like in the U.S., bank accounts overseas offer varying access to cash, mobile apps and tools, so be sure to consider what you need in bank.
2. Find a foreigner-friendly banking institution. Do your research to find a bank account that fits your needs. This may be a local bank in the place you’ve traveled to, or a larger, global bank that serves that area. Check your eligibility before you start trying to apply for an account.  
3. Gather the necessary documents. In order to open an account, you’ll need to provide paperwork such as your proof of identity and proof of local residency.
4. Fill out the bank application. Like in the U.S., bank account applications will vary from one institution to another. In many cases, you’ll be able to do the application online.
5. Look out for your new card. Once you’re approved, you’ll be sent a bank card (if applicable) in the mail. 

What documentation do I need to open an account?

When opening a bank account abroad, there are a few common requirements you’ll likely need to meet to qualify. Specific documents and requirements will vary from country to country and bank to bank, so make sure to double-check with your chosen bank to ensure you have everything you need.

• Proof of identity: This could include your driver’s license, state identification card or birth certificate. Most banks ask for at least two forms of identification.
• Proof of local residency: You’ll likely need proof that you have secured local residency. Think: a recent utility bill, a copy of your lease or a recent ID with your new address on it.
• Start-up funds: Many banks require a certain amount of funds to be deposited to open your account. This could range anywhere from $500 to upwards of $1,000.
• A valid student visa or work visa: If you’re visiting the country on a student or work visa, you’ll need to provide your bank with proof of your current visa.
• Letter from your university or place of employment: Your bank may ask you for a letter from your university or employer to confirm that you’re currently enrolled in an academic program or employed and earning income.

Tips for choosing the right bank abroad

Choosing the right bank abroad will require you to ask yourself a few questions.

1. Does your existing bank have any branches nearby? Nothing beats convenience, and you may be able to skip opening up a whole new bank account if your current bank can meet your needs abroad. Do some research to see if this is an option and if the branch is close to your new residence abroad. Bank of America, for instance, has local branches in more than 35 countries around the world and access to more than 140 currencies across 200 countries. HSBC, meanwhile, is available in more than 30 countries and regions throughout Europe, Asia, North and Latin America, and the Middle East and North Africa.
2. Is there a language barrier? Make sure when you’re selecting a banking institution that you’re considering any potential language barriers that could hinder your ability to communicate with banking associates, should you ever need to.
3. Is this bank insured? In the U.S., you have the reassurance of knowing that most banks are backed by the Federal Deposit Insurance Corp. (FDIC). This means your money is protected, up to a limit, in the event of a bank failure. Confirm with your potential new bank that there are similar protections in place. In Europe, for example, many deposits are protected by the European deposit insurance scheme (EDIS). 
4. Can the bank manage dual currencies? Multi-currency bank accounts allow you to transact with more than just one currency — something that may be important to you if you want to handle both U.S. dollars and a foreign currency. You can also look for a bank or credit union with attractive currency exchange rates so you’re not stuck paying a lot to exchange currencies. 

Who needs an international bank account?

Having an international bank account can make managing your finances a lot easier if you plan to study abroad, work abroad for an extended amount of time or if you’re relocating altogether. Access to a bank account in your chosen country means an easier time making and receiving payments in a different currency, and the added protection of keeping your funds safe while you’re abroad rather than opting for cash or relying on a bank or card that may not be accepted internationally.

You could also save more money in the long run by cutting down on service and transaction fees. There are pros and cons to opening up a bank account abroad. When deciding if an international bank account is right for you, here are a few factors to consider:

• How long will you be staying? The duration of your stay matters. For a shorter trip, you’ll likely get by just fine using your regular bank account or cash. However, if you plan to make this new country your place of residence for a few months or years and will have recurring bills or plan to earn a living abroad, an international bank account may be a more convenient option for managing your money.
• Will you be traveling to multiple countries? If you plan to visit several other countries, an international bank account will be your safety net and guarantee that you have access to currency wherever you travel.
• Does your U.S. bank have a branch abroad? If your current bank doesn’t have a branch in the country or countries you plan to visit or relocate to, you might consider an international bank account.

What if I don’t want to open an account abroad?

Opening a bank account in a different country isn’t for everyone. If you decide you’d rather forgo a new account, there are still a few options available to you to help you manage your money abroad and ensure you have access to funds no matter where you are.

• Using a U.S. bank with branches overseas: Your bank may have a branch already available to you in your new country, like Citibank, for example. 
• Using cash only: When traveling overseas, many foreigners opt to use cash as their main payment method. This option can make covering your costs a lot simpler, but it’s not without its drawbacks. Your money won’t be protected if you happen to lose it or it gets stolen. You’ll also need to plan carefully ahead of time to make sure you’re carrying enough cash to last throughout your trip, as you won’t have access to extra funds in the event of an emergency. You also won’t earn rewards or qualify for the insurance a credit card can offer.
• Using wire transfers: Wire transfers are an option for accessing funds abroad and are typically easy to exchange for foreign currency, but they do involve processing fees and can take several days to get to you.

FAQ

• Can I withdraw money from my US bank account in a different country?
  

  Most banks will allow you to withdraw money from your U.S. bank account at an ATM abroad, though you’ll likely need to pay hefty foreign ATM and processing fees. Some banks will also set a limit on how much you can withdraw per day, so check in with your bank to learn more about any limits they may pose.

• Which popular credit cards have no international fees?
  

  Here’s a roundup of the best credit cards with no foreign transaction fees.

• How long does it take to open a bank account abroad?
  

  Many banks will process and grant you access to your new account within a few weeks.

• Are there tax implications to opening a foreign bank account?
  

  Yes. Any U.S. citizen with foreign bank accounts totaling more than $10,000 must declare them to the IRS and the U.S. Treasury, both on income tax returns and on FinCEN Form 114.

• Are digital payment methods an option?
  

  Yes. Options like Apple Pay and Google Pay can be used abroad, so long as the country you’re in supports contactless payments. However, this option should be saved as an added safety net rather than your main payment method. You don’t want to find yourself in a position where you’re unable to cover an expense if a merchant doesn’t accept certain digital payment methods, or you happen to run out of battery on your device.

• How much does it cost to open and maintain an overseas account?
  

  The cost of opening an account varies widely based on the bank and type of account. While opening the account may not cost you much, there can be minimum opening deposit requirements of $500 or more.

The bottom line

Covering costs overseas can look different depending on where in the world you are. By planning ahead and exploring the various payment and banking options available to you, you can ensure that you’ll always be able to access your funds while you’re away.