Navigating the U.S. Banking System (A Guide for Expats)
Moving to a new country is undoubtedly exciting. Yet the process also comes with a variety of challenges -- and navigating a new banking system is one of them. The U.S. system, in particular, can present some hurdles for expats, unless careful research is undertaken ahead of time.
With that in mind, let's review what new residents need to know when navigating the U.S. banking system.
What to know about banking in the U.S.
First, it should be noted that the U.S. is a large country with a very robust and diversified financial services sector. As such, consumers have a wide variety of choices when it comes to banking.
These choices include large international banking firms with a global presence and smaller community banks. These smaller institutions may have a regional presence or exist only in a single community.
Additionally, U.S. banks feature competition from credit unions, entities that offer the same services as a big bank, but are not for profit and member owned. Because of this, credit unions typically offer higher savings rates and lower fees.
While global banks may be more familiar to expats as they may have a presence in their home country, community banks and credit unions are often more responsive, along with offering highly-competitive rates.
U.S. bank account types
Banks and credit unions in the U.S. offer a range of different terms and incentives for opening a checking or savings account. Expats should review these terms closely to get the most attractive deal.
While checking and savings accounts are well-known across the globe, there is another type of account commonly available from U.S. banks: The money market account. This account offers limited check-writing privileges and higher interest rates than a savings account.
Accounts opened in the U.S. are also federally insured by either the FDIC (banks) or NCUA (credit unions), which provides a measure of security for consumers. Most accounts are insured for up to $250,000; though you’ll want to check with your bank or credit union to verify insurance amounts on any account you open.
To open an account in the U.S. expats should travel in person rather than attempt to sign up online. Those who are new to the country will likely have little to no credit history, and financial institutions will need to verify your identity, as this is a strict legal requirement.
Because the requirements for opening an account may vary by financial institution, it's a smart idea to contact a bank or credit union ahead of your visit to find out what documents are needed. Generally speaking, items such as a passport, driver's license, immigration papers, utility bills or lease agreements are used to establish identity and open an account.
Once that process is completed, the last step is to simply make a deposit, and you're ready to go.
No matter what your banking needs, KeyPoint Credit Union is here to help you get started. Visit a branch today for more information on how we can help you meet your financial objectives, or open your new checking or savings account online today.