It’s impractical to assume, when leaving the United States permanently, that you should keep your money within a U.S.-based financial institution. Because not only must you generally pay bills in the currency used by your new home country, you must also show proof of local banking information in order to secure certain necessary loans and leases.
This makes setting up a bank account in your new home country extremely important. Luckily, while doing so isn’t necessarily simple, it may be easier than you think. Just follow these steps and you’ll be well on your way.
- Understand the differences in banking between the U.S. and your new country of residence. Before you decide to open an account in another country, it’s a good idea to get a handle on the differences in financial regulation and between various banks’ individual policies. In some countries, there are extensive sets of fees for various transactions. Some have limited online services, others place severe limits the amount you can withdraw each day or week and the balance you must maintain. In addition, many countries are much less lax about bounced checks than U.S. institutions can be. According to Reuters, in some countries, expats who write checks with insufficient funds to cover them could face jail time since it’s considered a criminal offense.
- Consider finding a global financial institution. Some financial institutions, such as HSBC, operate in many locations around the world and even have premier banking options that make global living and financial management easier. These banks tend to have a simpler process for expats opening an account outside the U.S. while also making it easier to transfer funds between an account in the U.S. and one abroad (within certain currency exchange restrictions). It will also assure you some familiarity with the banking culture of the institution.
- Open an account. The process of opening an account may vary depending on the country and financial institution you select, but generally, you can expect it to be a longer, more involved process than opening an account in the U.S. Part of the reason for this, according to ExpatFocus.com, is that the foreign institution needs to verify that you aren’t attempting to hide or launder money. If you choose to visit an institution without an onsite translator, you may want to bring your own in order to ensure there is no miscommunication, unless you have an in-depth understanding of the language spoken. When opening the account, be prepared to provide copies of existing bank account statements, birth certificate, marriage certificate (for a joint account), current address, and your passport. According to ExpatFocus.com, some institutions may even require character references before opening the account. You may want to call the institution in advance to determine just what is needed before you visit.
- Consider ongoing maintenance. Having an account overseas and one in the U.S. isn’t a good solution for everyone. With currency transfer restrictions and fluctuating exchange rates, it could be in your best interests to move everything to the foreign country all at once. Then again, it might not—especially if, for credit maintenance reasons, you want to keep a financial presence in the States, because according to Yahoo! Finance, maintaining a bank account in the U.S. makes it much easier to re-establish credit should you decide to return.
After opening the account you must decide how and where you are going to manage the bulk of your money. ExpatGuy.com suggests that you make sure to get an international ATM card no matter what. That way, whether you are in your new home, exploring nearby countries or visiting relatives back in the States, you have access to your money.
You’ll also want to research the bill paying options available from your new institution. Many allow for automatic payments so you can ensure bills such as your expat health insurance premium are made regularly and on-time without any added steps from you. Find out what your financial institutions charges for this service and make sure to provide the bank with relevant information to make payments to your expat health insurance company and other service providers.
When setting up for your new life abroad, don’t focus only on the fun and exciting aspects; consider the pros and cons of local banking and explore the various differences in processes and procedures so that you make sure your affairs continue to be easily managed.