Thursday, September 10, 2015

How to Open a Bank Account in the U.S.

By Xiao Lu
World Education Services

What kind of documents do you need to open a bank account?
U.S. citizens need to provide their Social Security Number (SSN) to open a bank account, but as a newly arrived international student, you will need your passport and your I-20 as proof of your legal status in the U.S. You should also bring your school ID and driver’s license with you in case the bank needs additional documentation. Besides these documents, make sure you have a valid U.S. address and phone number.

Types of bank accounts
Upon arrival, without a valid U.S. credit history, you are only allowed to open a debit account until you build enough credit for a credit card. There are usually two types of debit accounts:

  • Checking Account: This account is directly associated with your check transactions, or the depositing or withdrawal of cash. For example, when you redeem a check from your bank account, your checking account will deduct the respective amount. 
  • Savings Account: Compared to a checking account, your money has a higher interest rate. If you're facing the burden of a high tuition and living fees, it’s highly recommended to save your money in a savings account. 

Which bank is the best fit for you?
The U.S. has many banks choose from with Citibank, Bank of America, and Chase as the most popular options for international students. Let’s take a look at each bank's features:

  • As one of the most successful globalized banks, Citibank might be the best known local bank among international students. Many students choose Citibank for its global reputation and low account-opening fee.
  • If you're interested in opening a credit card in the U.S., Citibank is the only bank that allows international students to receive one once they arrive in the U.S., even without an SSN. 
  • Citibank offers a tool called Popmoney to enable the transfer of money within your own accounts or with others’. The transaction is usually free, but it can take up to three business days when you are transferring money to a non-Citibank account. 
  • Citibank also has many branches and ATMs to facilitate your cash accessibility at any time. 

  • Occasionally, Chase will have an open account bonus ranging from $100 to $500 when you open a new account. This bonus attracts a lot of international students to Chase as their banking choice.
  • Chase has a variety of credit card options, such as cash back cards, airline cards, hotel cards and others to help you shop smartly in the U.S. An ideal route is to open a bank account with Chase first and then start building customer loyalty from a debit account to help you get approved for a Chase credit card.
  • Chase QuickPay is a free tool to transfer money between accounts. The results are more instantaneous compared to Citi PopMoney. 

Bank of America: 
  • Bank of America branches and ATMs have high exposure all around the U.S., which make it easier to withdraw cash. This is especially useful if you plan on travelling domestically.

If you are transferring money to a friend or family member, you may want to consider using the same bank as them to make the process easier.

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