As an ESL student, you may be asking yourself why you should open a bank account when you come to the US. For many visitors, opening a bank account in the United States has become almost a necessity as there are many advantages that will save you money. Let’s explore some of the reasons why you may want to open a bank account in the US.
Firstly, it’s expensive to do business in the United States without an account with a financial institution in the country. To start out, there are usually fees placed on international transactions conducted with a debit card (a card which withdraws funds directly from your checking account) or credit card (a card which uses a line of credit to pay for purchases, which must then be repaid). These can be as high as five percent of the converted amount of your purchase in dollars against the price of the transaction in your home currency. If you plan on enrolling in an English language school for a few months, you will see that these fees can add up fast! If the fee wasn’t bad enough, this is almost always an unfavorable exchange rate that is determined by your bank. There are some credit cards which lower this rate, namely American Express. You will want to contact your bank directly to see what fees may apply and what exchange rate is used. If you plan on opening a bank account in the United States, you will want to confirm that there is a local presence of ATMs and if you can get a credit or debit card to allow you to make charges without these additional fees.
Many visitors in the United States try to avoid being charged international purchasing fees by withdrawing funds from their accounts back home through American ATMs. This is usually an expensive proposition. Apart from some networks which allow their users to pull funds from accounts in their home countries without a fee, most international ATM withdraws will cost you dearly. There is usually a fee on your bank’s end, which is in addition to the conversion fee you may incur. If this isn’t enough, there may also be a fee on the side of the bank which you are withdrawing the physical cash from. To top it off, many banks have relatively low limits on the total amount you may withdraw from their ATMs per day. This is often capped around six hundred dollars. Additionally, your home bank may think that someone has taken your card and is attempting to commit fraud against your accounts, especially if your normal transactions do not include making a lot of cash withdraws. If you are asking yourself why open a bank account in the US, you may find that this may be reason enough!
If your home bank belongs to a network, or ATM alliance, withdrawing funds from your home country will be a much less costly transaction. One of the biggest alliances features Barclay’s, Deutsche bank, PNB Paribas, China Construction Bank, Scotia Bank, Banco Santander, and Bank of America. If your home bank is one of the partners in this alliance, you will be able to use some local ATMs without many of the usual conversion fees. It is important to contact your home bank to see what ATMs you can use and what fees may be associated.
It is often much less expensive opening a bank account in the United States and wiring these funds from your home bank. A wire transfer is a transaction that sends almost unlimited funds from one bank account to another, even between accounts in different countries. There are usually wire fees on both ends of the transaction, which can be higher or lower depending on the financial institutions you pick. Your home bank will likely charge you a fee for the transfer, but the rates at which your home currency will be exchanged to dollars is usually better. It can cost as much as thirty dollars to receive a wire, or your bank may offer you free incoming international wires. The important thing to note is that these transactions usually have a flat fee structure, which means that no matter how much you send, the price stays the same. This is a great benefit, as the more money you send, the more economical the transaction becomes when compared to making purchases or using an ATM.