Opening a Bank Account
A US bank account will make managing your finances a lot easier, and you should set one up as soon as you arrive. You can deposit your financial aid awards, loans and stipends, all of which are typically paid to you by check, as well as money from home.
You can pay all of your bills by check, and with most bank accounts, you can even manage and make all of your bill payments online. In addition, most banks now issue debit cards with a MasterCard or Visa emblem, which means you can use the card to make purchases against your account anywhere that accepts credit cards, including online and in stores. Paying cash or purchasing money orders for payments is inefficient, carrying cash can also be dangerous and paying in cash doesn't leave much evidence behind to prove your payment in case of a dispute. Certainly a bank account will make budgeting a lot easier.
How Do I Choose a Bank?
Banks offer many different financial services for students. You may wish to compare the services and costs of several banks before choosing one at which to open an account. If your school has a relationship with a particular bank for all of its international students, you should certainly consider that bank first. You will need a checking account for proper money management (for writing checks, online bill payment, debit cards, etc.), and if you have large amounts of money just sitting in your account, it may make sense to open a savings account as well.
It’s also a good idea to ask your school’s international services whether your school has a relationship with a particular bank for all of its international students. If a bank is used to dealing with international students, the process of setting up your account will go much smoother.
Types of Bank Accounts
Checking accounts allow you to deposit and withdraw money frequently, making them a great way to pay your monthly bills. When you open a checking account, you usually received checks and a bank card, which you can use to make purchases and pay bills. Generally, there are minimum monthly balances and service fees, which vary according to the type of account you have. Most students only need a checking account, and use it for managing expenses at school.
Banks offer different types of checking accounts according to individual needs. Some banks charge per transaction, some have a basic monthly fee, and others offer free checking as long as you maintain a certain minimum balance in your account. You should be able to access your account information via the bank’s website.
Savings accounts are intended for long-term deposits for earning interest. The interests, minimum balances, and service fees vary from bank to bank. These also depend on the amount of money you deposit. Most international students do not require a savings account.
Ask how long it will take to "clear" a check - that is, how long from the time a check is deposited in your account until the time you are allowed to withdraw the funds. Typically wired funds are available immediately, but the "hold" on checks (local, out-of-state and foreign) varies by state and by bank, and can be several days to a week or even longer.
How Do I Choose an Account?
Research and compare the accounts the bank has available, with an eye towards how much it could cost you to keep the account. Ask about accounts specifically for students. Find out whether the bank offers interest on checking accounts, what the interest rate is on savings accounts and whether the account offers overdraft protection. There may also be a minimum balance requirement on an account, so make sure to ask the bank about this. Hopefully you never accidentally write a check for more than you have in your account - but if you do, does the bank pay the check and just fine you, or do they refuse payment to the company you wrote the check to ("bounce" the check)? If so, both the company AND the bank will fine you, and that adds up quickly!
Ask how long it will take to "clear" a check - that is, how long from the time a check is deposited in your account until the time you are allowed to withdraw the funds. Typically wired funds are available immediately, but the "hold" on checks (local, out-of-state and foreign) varies by state and by bank, and can be several days to a week or even longer. This is crucial if you have a scholarship fund that sends you money via check.
Most major US banks offer "student checking", accounts and services designed specifically for students - here's a small sample:
How Do I Open a Bank Account?
Even though lots of banks now advertise that they allow new customers to open accounts online or by phone, as an international student, plan to open your account in person at a local branch. You do not fit neatly into a category for US banks, and if you need additional services it’s always good to have established a face to face relationship. When you go, make sure you bring your passport and the funds you want to deposit. In addition, you should bring as many of the following documents or ids as you have - although every bank has slightly different requirements, you will likely need:
- Your full name, home address, home telephone number, your campus telephone number, and your college address. (Letterhead showing the local address – i.e. utility bills, apartment contract…)
- Unexpired passport
- I-94 card
- I-20, DS-2019 or I-797 approval notice
- Any secondary form of identification (Acceptable ID includes, your passport, your Student ID card, birth certificate (international/english version), State’s driver’s license, or a letter from International Students and Scholars)
- Enrollment verification letter from your school
Initial Money Needs on Arrival
You should evaluate your needs for the first few weeks of school - most schools suggest bringing about $2,000 in readily available funds. You can bring this amount in traveler's checks, or better yet, bring your foreign bank card, after checking that it will work in US ATMs (automated teller machines), to access an account at home. All other money can be wired to your new US bank account after you arrive. Remember, if you have a scholarship, assistantship or another form of employment, it will typically take a month or more to get your first payment, so make sure you have enough money to live for your first few weeks.
Before you arrive, find out from your bank at home how to wire money to the US, and how much it will cost in fees. After you have set up your new bank account, you can arrange the transfer by providing your home bank with your US bank details. You will need to provide your account number, the US bank's name and address, and the US bank's ABA number. Wire transfers typically take between 2-5 days. Ask your home bank for a confirmation once the funds are wired.
Types of cards and Checks
A debit card, also known as a check card, allows you to withdraw or deposit money to your bank account using an Automatic Teller Machine (ATM), and to make purchases at stores that accept the card. Debit cards are not credit cards, however, and they can be used only to the extent that you have funds in the account to which they are linked.
Many banks issue bank cards that allow you to withdraw and deposit money 24 hours a day through an ATM. These machines are frequently located outside the bank (and on most college campuses). By using a bank card, you can avoid waiting in long lines and will have access to money even when the bank is closed.
Credit cards can be extremely useful, especially if you have unexpected expenses. You can use credit cards to pay medical bills, for car repairs, and to buy airplane tickets. However, it’s important to keep in mind that it’s easy to accidentally accumulate large bills with credit cards, and before you know it, you may be in debt. Most banks charge an annual fee. If you are unable to pay your full balance each month, you will be charged high interest rates on the remaining balance and any additional charges you make, so make sure you stay within your budget when making credit card purchases.
To cash a check, you will need to endorse it by signing your name on the back. Additionally, you will be asked for personal identification. Some stores will cash a check for you if you shop there regularly, and supermarkets may allow you to pay by check with authorization from their credit department.
To learn more about money in the US, vist our Money Matters page.