Can a foreigner open a U.S. bank account?

Non-U.S. residents can open bank accounts in the U.S., but you’ll need to meet some basic requirements first, including providing additional pieces of identification.

The extent of the extra burden varies by financial institution, but is usually worth the hassle so you can efficiently manage your money and enjoy deposit insurance.  

What you need to open a bank account

Thanks to the Patriot Act, financial institutions must perform more scrutiny on bank accounts that are opened by non-U.S. customers. You’ll need to provide:

Personal information. This usually includes your foreign and U.S. addresses, date of birth, country of citizenship and occupation.

Primary ID. Typically you’ll be asked to provide a foreign passport with a photo, and with or without a visa; non-immigrant U.S. visa and border crossing card (DSP-150) with photo; Mexican, Guatemalan, Dominican or Colombian consular ID with photo; Canadian citizenship certificate card with photo; Green card with photo; or state-issued ID with photo, depending on your circumstances. 

Secondary ID. Additionally, you many need to provide a secondary ID, which can include: Foreign driver’s license or U.S. driver’s license; U.S.-issued work ID card or badge; debit or major credit card with the Visa or Mastercard logo; retail credit card from a well-known brand; U.S. State Department diplomatic ID; Mexican voter registration card with photo; student ID with photo; recent bank statement; paycheck or pay stub from an employer; recent utility bill showing your name and address.

Keep in mind that acceptable items for verifying your identity may vary from one financial institution to another. Therefore, what’s considered a primary ID by one financial institution may not be considered a primary ID by another financial institution, depending in part on your U.S. residency status.

“Understand the requirements of the banks willing to do it and what type of IDs they’ll ask for,” said Jane Mepham, a certified financial planner and founder of Elgon Financial Advisors.

What to consider when opening a bank account

When opening an account, a customer should consider factors such as:

• Required opening deposit (often $25 to $100).
• Required minimum balance to keep account open.
• Monthly maintenance fees, ATM fees and other fees.
• Available services such as online bill pay and mobile banking.
• Ability to earn interest on deposits.

In most instances, a non-U.S. resident cannot open a bank account online. Rather, they’d usually need to go to a branch operated by a bank, credit union or other financial institution. 

Keep in mind that what your bank requires may vary among other banks. There are still challenges to opening a bank account, even if you have the right documents; one example is that around 26 million people in the U.S. are not proficient in English, making it hard to comprehend important information and communicate with their banks. 

Also, it’s worth noting that a financial institution, such as a bank or credit union, can reject someone’s application to open an account. For instance, a financial institution might not approve your application if you’re unable to supply adequate identification.

Benefits to consider when opening an account

Although opening a bank account can be nerve wracking and difficult for non-U.S. citizens, opening a bank account provides a number of benefits, such as:

• Deposits insured by the Federal Deposit Insurance Corp. (FDIC) or National Credit Union Administration (NCUA) up to certain dollar amounts.
• Direct-deposit capabilities for paychecks and other funds.
• Access to other financial products, such as credit cards and loans.
• Ease of making online purchases.
• Ability to electronically transfer money through apps or other means.
• Availability of online bill-pay services.
• Possibility of earning interest on deposits.

SSN vs. ITIN

In addition to various forms of ID, a non-citizen generally needs to provide a Social Security number (SNN) or an Individual Taxpayer Identification Number (ITIN) when opening an account.

Many banks and other financial institutions require an SSN to open an account. The Social Security Administration issues nine-digit Social Security numbers as unique identifiers to U.S. citizens, permanent residents and eligible non-immigrant workers.

If you lack an SSN, you’ll probably be required to produce an ITIN to open a bank account. An ITIN is a nine-digit identifier available to a foreign person who doesn’t have an SSN and can’t obtain one.

To get an ITIN, you must fill out Form W-7 from the IRS. This is the application for an ITIN. You can submit the form by mail (along with required documentation), at an IRS office or through an IRS-authorized acceptance agent. Acceptance agents are colleges, financial institutions, accounting firms and other entities that the IRS lets these entities help applicants obtain ITINs.

The W-7 form is available in Spanish as well.

Which banks take alternative forms of ID?

Some larger banks that accept alternative forms of ID from non-citizens include:

• Bank of America.
• Chase.
• TD Bank.
• US Bank.
• Wells Fargo.

In addition, credit unions and banks connected to the BankOn platform might allow the use of alternative forms of IDs. The platform, managed by the Cities for Financial Empowerment Fund, helps unbanked and underbanked people open bank accounts.

Banking alternatives for non-U.S. citizens

So, if a non-U.S. citizen can’t get a bank account or doesn’t want to open one, what are the alternatives?

One option is using a remittance service, which lets you transfer money to people or businesses in other countries. Banks and credit unions offer remittance transfers, along with companies such as Western Union, Remitly and OFX. 

But just because it’s an alternative option doesn’t mean it’s better. Remittance services often charge high fees and generally don’t offer interest-bearing accounts. 

“Many immigrants are unfamiliar with the U.S. banking system and rely solely on these alternative providers for their financial needs,” a report from the Federal Reserve Bank of Boston says. “As a result, they often pay more for services and miss the opportunity to build a solid financial foundation.”

A study by the Federal Reserve Bank of Cleveland found that immigrants, particularly those from Mexico and other Latin American countries, are less likely to have bank accounts than their U.S.-born counterparts.

Other alternatives to bank accounts include check-cashing services and prepaid cards. Unfortunately, just as with remittance services, these options can charge additional fees. 

Your best option is to find a free checking account at an FDIC-insured bank.