If you are moving to the United States for higher studies or your first job, you can get overwhelmed with everything new that you see around you. One of the first things you need to do is to open a US bank account.
In this guide, we answer questions like, can an Indian moving to the US open a bank account? This article will also provide you with information about selecting a suitable bank account, applying for one, and the benefits you get from a bank account in the United States.
Steps to Open a Bank Account in the US for Immigrants and Students
The US is a country that runs on credit, and to have a smooth transition, You should aim to open a US bank account as soon as possible. The ideal scenario, Try to open a US bank account and get a US credit card from India before you travel. This will save a ton of time, effort, energy and documentation for you as you land. As a student or an employee Immigrating to the US, here are the steps you need to take:
Open a US Bank Account Step 1: Gather Your Documents
As an immigrant, you are a non-resident alien, which means you are not a US citizen. A specific set of documents is required for non-US citizens to open a bank account or access a US credit card, which we later feature in this article. Get all the required documents together, along with some recent passport size photographs of yourself.
Open a US Bank Account Step 2: Select a Bank
Many banks exist, including Indian banks in the USA. Each bank has benefits and drawbacks. Choose a bank that offers services that best suit your requirement. Look for a bank that has minimum or nil monthly charges. A bank that has ATMs on your university campus, near your residence or your place of work is helpful.
Open a US Bank Account Step 3: Decide on Your Type of Account
You can have two main types of bank accounts in the United States – a checking account and a savings account.
The bank issues you a cheque book and a debit card; you can deposit and withdraw money at will. It is one of the most basic types of bank accounts.
If you want to save some money for emergencies or annual payments, you will find a savings account helpful. Savings bank accounts accumulate yearly interest, which gets added to your principal every year or quarter.
Interest rates on a savings account offered by US banks are very different as compared to Indian banks. The average Interest rate offered on US savings account ranges from 0.01% to 0.05%. Huntington National bank and Capital One offer an interest rate of 0.2% and 0.4%. In comparison, banks in India offer an interest rate between 2.5%-6%, with some NBFCs and microfinance banks offering up to 7%.
A certificate of deposit (or CD) is the US equivalent of Fixed deposits (FD) in India, and the interest rate parity continues here. For one year, US banks offer up to a 0.8% interest rate on CDs compared to up to 7% in India on FDs.
There are other types of bank accounts that you can open, depending on your specific requirements, like money market accounts, brokerage accounts, certificates of deposit, and individual retirement accounts (IRAs). Read more about types of US banks and different bank accounts here.
Open a US Bank Account Step 4: Visit the Bank
You can apply for US bank accounts from India online; however, being a non-US citizen, you are bound to face challenges. Some banks may ask for your social security number (SSN), which you will not have, being a non-resident alien. Being a non-US citizen, it's always wise to visit the bank; however, with Zolve, you can apply for a US bank account from the comfort of your homes, even while you're in India.
Open a US Bank Account Step 5: Complete Your Application Form
You will be given an application form to complete. Provide accurate and complete information. Once you submit your application form and the requested documents, the bank staff will scrutinize your documents and details. After a few days, once your application has been approved, the bank will contact you, and your US bank account will become active.
Requirements and Documents for Opening a US Bank Account
As mentioned above, you need to provide specific documents for opening a US bank account. Here are the primary documents and information required:
- Your full name as on your passport
- Postal address- US address for delivering your physical credit card and future communications. For on-campus students, this is the same as their hostel address.
- Permanent address as on your passport
- Employer/University contact details as mentioned in your Form I-20 or Form I-797.
- Form I-20 or Form I-797 (provides information on a student's immigration status)
- Alternative ID proof like a college ID card, letter from your employer, or your birth certificate.
- Letter from your university/employer
- Cash amount for the initial deposit
The above are the typical requirements and documents that a bank may want. There may be additional requirements that can vary from bank to bank.
Opening a US Bank Account From India
Opening a bank account in the USA from India would not have been possible until a few years ago. However, today, thanks to private organizations' efforts in collaboration with the Indian and the US Government, students and professionals migrating to the US can get a US bank account even while they are in India.
Zolve is a global neobank catering to the needs of Indians immigrating to the US through its cross-border banking services. Zolve helps open a bank account in the United States, enabling you to manage your banking needs via your phone, receive real-time updates, and have your financial world at your fingertips with the lowest banking fees and processing charges.
Social Security Number – What Is It, and Why Is It So Important?
We outlined above how to open a US bank account. The US government issues a nine-digit number to US citizens called a social security number (SSN). Permanent residents or non-immigrant working residents can apply for an SSN.
Any individual who wishes to work in the United States needs a social security number to work there. Also, an SSN opens many doors for you, making it easier to get a driving license, open a bank account, and so on. If you have applied for an SSN before entering the US, you should receive it within three weeks of your arrival.
The Importance of a US Credit Card
Another important thing you need when you first arrive in the United States is a US credit card. The US economy is highly credit-driven, but this isn/t the only reason you should apply for a US credit card. Having a credit card enables you to have instant purchasing power in the US. Also, credit card companies offer rewards and discounts on credit card usage.
Building up your credit history is an essential aspect of integrating yourself into the American economy. The credit score is a statement that measures the credit risk of a consumer and is the most important parameter in deciding if an individual is eligible for a credit card in the US. Following healthy financial practices like paying your credit card bills on time, spending up to 30% of your credit limit, having mixed forms of credit (auto loans, home loans etc.) help you build a good credit history.
As an immigrant, you have to start building your credit score from scratch upon reaching the US, even if you had a flawless credit history in India. Immigrants are denied access to credit cards and other privileges owing to a lack of a good credit score (or no score at all). In order to get access to credit, you need to have a good credit history, but you can't build credit history unless you have access to some line of credit.
Zolve solves this problem for immigrants from India by providing access to credit cards from the very beginning based on their credit history in India. Zolve credit cards offer high credit limits so that you can shop for all your needs without worrying about your credit score.
Things to Look for in a US Credit Card
When you apply for a US credit card, look for the following features:
- It should be Federal Deposit Insurance Corporation (FDIC) insured.
- Use an unsecured credit card for maximum convenience and flexibility.
- Choose your credit limit carefully – You should spend up to 30% of your credit limit to build up a good credit history.
- Secured versus unsecured: Secured credit cards require a refundable security deposit to be submitted by applicants before issuing the card. Certain unsecured cards have other drawbacks for example, subprime credit cards have high annual fees
- Annual charges: Yearly credit card usage charges.
International Fees, Charges, and Taxes
Most banks and financial institutions will hedge the issue of international fees. When you get your bank statement or credit card statement, be attentive to those extra charges.
While applying for US bank account from India or a US credit card, it's a good idea to look for these additional charges so that you can choose a financial institution where you are likely to get charged the least. Zolve provides a US credit card with the lowest banking fees and processing charges, made exclusively for Indian students and working professionals Immigrating to the USA.
Open a Bank Account in the US and Reap the Benefits
A US bank account for Indians living In the US Has multiple benefits. This article covers all information to help you manage your finances while living in the US.
Zolve takes care of all your US banking requirements even while you're here in India by helping you set up a US Bank account and virtual US credit card. Zolve credit cards are made exclusively for Indians migrating to the US with low interest rates, zero annual fees and attractive rewards. We'll send you a shiny new US Credit card to your address post your arrival in the US.
Best of all, we help you build your US credit score right here, right now! We provide a safe and convenient credit card so that you can focus on your priorities and don't have to worry about your banking and financial needs.