Open a US bank account

Key points

• In our experience a branch appointment takes one to two hours. Two or three banks in one day are doable.
• Online banks open business accounts without an in-person visit. In our experience they are the weaker basis for later card applications at a large bank.
• Business accounts require an existing US company with an EIN.
• According to the IRS, interest on bank deposits that is not connected with a US trade or business is not subject to US withholding. Your obligations in your country of residence are unaffected.
• For residents of Germany, the US exchanges account data under a reciprocal agreement.
• No one can guarantee approval; the decision rests solely with the bank.

Who a US bank account is for

The account is where the setup starts. The US card bills are later paid from it in dollars, and a bank where you have held an account for months knows you better at a card application than a stranger.

The account alone does not create a US credit history. That only grows with the cards built on top of it.

• Private individuals who want to build their own US credit history and pay their card bills in dollars.
• Owners of a US LLC (limited liability company, a US legal form) who want to collect revenue in dollars and use business cards. What an EIN does for a company and what it does not is covered in EIN for a foreign-owned company.
• Companies with US customers who want to connect payment providers such as Stripe through their US company.

Requirements

Branch bank or online bank

Online banks such as Mercury say they are not banks themselves. Partner banks hold the accounts, and accounts are opened online only and only for companies.

The process in six steps

1. Lay the groundwork. Set up an address and phone number, compile the documents.
2. Select banks. Two to three institutions, aligned with the cards that are to follow.
3. Schedule appointments. Contact branches in advance and say openly that you do not live in the US.
4. In-person visit. Open the accounts, set up online banking, make the initial deposit.
5. Activation. Cards and login credentials go to the US address and reach you by forwarding or scan.
6. Use. Regular activity on the account. A card is later paid from here as well, for example after a Global Card transfer.

Costs and third-party costs

Timeline

In our experience preparation takes two to six weeks. Most of it depends on whether an ITIN or EIN is already in place.

Three days on site are usually enough. In the cases we accompanied, cards and login credentials reached the US address within one to three weeks. The banks themselves commit to no deadlines.

Common mistakes

• Providing a pure package forwarding address that banks recognize as such.
• Walking into a branch without an appointment and failing with an employee who has never opened an account for someone living abroad.
• Letting the account sit idle after opening. The monthly fee keeps running, and an empty account counts for little at later card applications.
• Giving the bank inaccurate information about your residence. This puts the account and later cards at risk.
• Applying for an ITIN just for a personal account. The deposit exception in the Form W-7 instructions covers income connected with a US trade or business and US tax residents, not a non-resident's personal account.

When a US bank account is not worth it

• You only want to receive or pay dollars and will not apply for US cards later. A foreign currency account at your home bank or the dollar account details of a payment provider are enough. What the conversion can cost is explained in foreign transaction fees.
• Your US company only needs a business account. An online bank opens it without travel, and our support is usually not needed for that.
• You expect the account to stay hidden from your tax office. For residents of Germany, the US exchanges account data under a FATCA agreement.
• You will rarely use the account. At branch banks the monthly fee keeps running, and a dormant account adds little to later applications.
• You cannot travel to the US but need a personal account at a large branch bank. Without an appointment on site, these banks do not open one.

Notes on reporting and tax

The US does not apply the OECD Common Reporting Standard. It exchanges account data through FATCA agreements, and these differ from country to country.

With Germany a reciprocal agreement applies. US banks report the name, address, German tax ID, account number and interest paid for account holders resident in Germany, for a deposit account once more than $10 of interest is paid in a calendar year. The German Federal Central Tax Office receives this data from the IRS.

Austria and Switzerland currently have a Model 2 agreement. Banks there report to the US, but no account data flows back from the US. Switzerland has signed the switch to the reciprocal model, which is scheduled to enter into force no earlier than 2029. For other countries, the agreement listed by the US Treasury applies.

A US account does not change your filing obligations in your country of residence. Whether and how it appears in your tax return is for your tax advisor alone to assess.