Banking Information All Immigrants Should Know

Are you an immigrant in the United States considering opening a bank account? If so, this information is for you.

In my home country, I lost all of my savings when the bank collapsed. Why should I trust banks in the United States?

In the United States there is an agency called the Federal Deposit Insurance Corporation (FDIC). The role of the FDIC is to insure money that a customer has in the bank up to $100,000. This means that if the bank goes out of business the FDIC will return up to $100,000 of your money. Most banks in the United States are insured by the FDIC. You can tell whether or not a bank is insured by looking for the FDIC logo on bank materials.

I am an immigrant – can I open a bank account?

There are many banks in the United States that accept alternative forms of identification to help immigrants open a bank account. As you shop around for a bank you should ask if they accept:

1. Matrícula Consular – If you are a citizen of Mexico, Colombia, El Salvador, Honduras, Peru or Argentina you can apply for the consular registration card. Contact your local consulate for more information. Many banks now accept the Matrícula as a form of identification.

2. Individual Taxpayer Identification Number (ITIN) - Immigrants are also eligible to apply for an ITIN number. An ITIN number is issued to individuals without a social security number to record their wages and income to the government for tax purposes. Some banks are now accepting the ITIN as a form of identification to open an account.

What are the benefits of opening a bank account?

There are many benefits of opening an account with a bank rather than keeping your money stored at home and using a check cashing service to cash your paycheck. Among others, some key benefits include:

1. Safety – In a bank, your money is safe from theft, loss and fires.

2. Convenience – Most banks now have Automatic Teller Machines (ATMs) widely available. Many also have online banking services, making it even easier and more convenient to access the bank.

3. Cost – Using a bank is the cheapest alternative to cash your pay check

Services: Cashing Checks
Fee Amount: (fee = 1.5% of total check $4.80 x 4.5 weeks) - $4.80
Fees in one month: $21.60
Fees in one year: $259

Services: Money Orders
Fee Amount: $1.25
Fees in one month: $5.00
Fees in one year: $60

I want to open a bank account, where should I begin?

Shop around. This is the most important piece of advice. There are many banks in the United States. Each bank offers more or less the same basic financial services, but all on different terms and conditions. To find the bank that is right for you, consider the following:

1. Products – Are you interested in a checking account? Savings account? Other savings options? Loans? Look for a bank that offers the products you need.

2. Pricing – Compare how much each bank charges for the services that it provides. Ask questions and read the fine print to make sure you understand all fees and charges associated with each service.

3. Requirements – Make sure you understand what the bank requires to open an account and you have all of the necessary documentation. Some banks accept alternative forms of identification like a matrícula consular and others do not. Ask first!

4. Locations and remote access – One of the key reasons to use a bank is convenience, so you can access your money quickly and easily. Choose a bank with branches close to your home and work. Also make sure to find out if the bank has ATMs and where they are located. Equally important is understanding how much you will be charged for using ATMs that do not belong to the bank.

5. Customer service – Look for a bank with employees that speak your language and have materials available in your language. It is very important that you understand everything that you sign up for with the bank.

More information on your money and you from Accion USA - www.yourmoney.accion.org.

TIP: Opening a bank account is a great first step towards building your financial future in the United States. By opening and managing a bank account responsibly, you are building a positive written spending record that can help you achieve your financial goals.

Sources:
FDIC Money Smart Curriculum