Can a non-American open an account at a bank?

For most consumers, having a bank account is among the primary tools to help with security in the financial realm. Yet, five percent of U.S. households are unbanked or do not have a bank account, as per Federal Reserve data from 2020.

Non-U.S. citizens face numerous challenges when it comes to managing their finances, including figuring out how to protect their funds and avoid costly checking service charges.

“Without a bank account, new Americans will have less access to their funds, have to pay fees to cash their checks, and do without so many of the conveniences available through a checking or savings account,” says Rebecca Morris Hoeft, chief brand officer for St. Paul, Minnesota-based Sunrise Banks.

The benefit to non-U.S. citizens is that they can create accounts such as a checking or savings account to eliminate some of the high costs and enjoy the protection provided by Federal Deposit Insurance Corp. coverage. Opening an account takes more effort and paperwork than U.S. citizens, but it’s worth it due to the financial advantages.

Required documents

For an account to be opened, the institution, like a bank, has to verify that you are the person opening the account. This is part of the U.S. government’s customer identification program, which establishes the standard for how banks and financial institutions must confirm the identity of their customers.

Checking your identity can be dependent on the institution. However, it usually includes providing the following information:

  • Photos ID Documents that can be used to verify your name and date of birth include unexpired passports, an alien registration certificate, and an international driver’s license.
  • Utility bills The bill could be an energy or gas bill that includes your current address.
  • Deposit initial: Not all credit unions or banks have a minimum deposit requirement for their initial deposits; however, some do. Wells Fargo, for example, has an initial minimum deposit of $25 to create an Everyday Checking account.
  • Individual Taxpayer Identification Most banks pay interest on their accounts which is tax deductible. The banks require an ITIN for non-residents to provide information to the IRS for tax reporting purposes.

Many people are used to completing online tasks, such as setting up a banking account. However, non-U.S. citizens might discover that it’s not feasible.

“Online account opening systems do not work well with individuals without (a Social Security number) due to the nature of identifying questions,” Hoeft states.

Alternative identification options

For non-residents or citizens who do not have a Social Security number, There are alternative options such as a passport number and the country of its issuance, the number of identification for aliens, or an identification number and the land of distribution for any other unexpired government document that proves residency or nationality by an image.

Non-U.S. citizens can request an ITIN, among the most frequently used alternatives to identification documents. An ITIN is obtained from the IRS. If you have the help of one or more numbers, non-citizens can make tax filing. The ITIN does not allow individuals to work inside the U.S. and is used only for tax reporting to be used for tax reporting. Obtaining an ITIN is a requirement for completing the W-7 form.

Complete the Form W-7 and mail it to the IRS and include evidence of identity and proof of foreign status to:

Internal Revenue Service
Austin Service Center
ITIN Operation
P.O. Box 149342
Austin, TX 78714-9342

If you do not want to send the forms in person or return them, you may submit your paper and submit it to an IRS-approved certifying acceptance agent.

The IRS indeed issues ITINs via mail. However, it’s not a quick procedure. The process usually takes seven to eight weeks.

The advantages of opening the bank account

The process of filling out forms, going to the agent’s office, and waiting for more than two months could be inconvenient; however, the advantages of having a bank account are more significant than the inconveniences.

How bank accounts can assist consumers in managing their money, for example:

  • Lower costs If you do not have a bank account, checks are cashed by checking services or debit cards with a prepay option that typically charges excessive fees.
  • Extra security: Storing funds in the bank account is safer than keeping them in an unorganized drawer. Banks and credit unions provide deposit insurance up to $250,000.
  • The future is in savings. Saving for the future: With a savings account that is high yield, users can follow good habits for building the wealth they accumulate over time and making themselves ready for any eventuality. Savings accounts generally allow six withdrawals per month.
  • Opportunities to build credit Building a solid credit history can be an opportunity to achieve larger goals like buying cars or buying the home of your dreams. Certain banks have tried to assist non-U.S. citizens in getting on the road to homeownership. Alongside aiding non-U.S. citizens to open savings and checking accounts, Hoeft states that Sunrise can be “one of a handful of banks in the nation that offers home mortgages to new Americans without a Social Security number by using their ITIN instead.”

Credit unions and banks which accept alternate IDs

On first inspection, many websites for banks appear to state that they do not carry other I.D.s. Although many of the largest banks have the Social Security number as a condition on their websites, it could only be required to open an account online.

Sometimes, banks can assist you when you cannot find information. Appointments are scheduled by a variety of banks which will accept ITIN as an ITIN instead of the Social Security Number online, such as:

  • Bank of America – Online Appointments
  • PNC Bank – Online Appointments
  • Chase – Online Appointments
  • Citibank – Online Appointments

Certain credit unions also accept I.D.s with different numbers. D.C. Credit Union, Washington, is one example. It provides the SAFE Checking Account that is designed explicitly for non-U.S. residents. Because the account does not earn interest, it does not require a tax I.D. number, only an international I.D.

Another alternative for non-U.S. residents to consider is the bank account offered as part of the push by the banking industry to open its doors to non-banked customers. Apart from having low costs and no fees for overdrafts, Bank On standards recommend that credit unions and banks in the program accept other I.D.s.

But the ability to use the ITIN and a foreign identification to establish a new account isn’t all that is important for non-U.S. residents. Evaluating charges and minimum requirements for the balance attached to the chronologies is also essential. Check out Bankrate’s guide on avoiding bank charges to avoid spending excessive money to store and manage your money.

Bottom line

The traditional banking I.D. requirements can be an obstacle for non-U.S. residents when they attempt to get a bank account. However, many institutions and banks will accept alternative I.D.s to ease the process. Although getting an ITIN isn’t without some work, the option to open accounts such as a checking account and a savings account and, in some instances, apply for a home loan is a considerable contribution to achieving financial security.