Banking in the US: Complete guide for expats

The US has a very well developed banking system with many different banks to choose from, and an excellent range of products and services. However, it’s not likely to be quite the same as what you’re used to at home. From the names of account types through to the common fees and charges, banking in a new country can be confusing.

This guide is here to help international residents in the US navigate the banking system and make the most of their money. We’ll look at popular US banks, account types and fees – and also some smart international solutions like Wise, which can help you hold, send, spend and exchange USD alongside 40+ other currencies.

Overview of the banking system in the US

There are plenty of banks to choose from in the US and as many have a global presence, the chances are that you’ll recognise many of the brands out there. US banks tend to offer good digital services, but not all tasks can be completed online. In some cases for example you need to visit a branch to open an account or to send a higher value payment. Depending on the levels of digital banking in your country this may come as a surprise.

The US also commonly uses checks which have been phased out in many other countries – expect most standard USD accounts to offer checking services, which can include mobile check deposits. Checking services are gradually being replaced by more digital methods, but still get used more than you may expect.

While there are many US banks, it’s useful to know that most consumer accounts in the US aren’t offered as multicurrency accounts, and don’t necessarily have a huge range of international features. Most services are aimed at USD holding only.

Multi-currency accounts like Wise have been created to help meet the needs of people looking to manage their money across currencies, including holding, exchanging and spending USD alongside other currencies.

Currency in the US

The official currency in the US is the US dollar. You’ll see this written as USD, or $. Each dollar is split into 100 cents, shown as c or ¢. 

US bills are available in the following denominations $1, $2, $5, $10, $20, $50, and $100.

Coins available include 1¢, 5¢, 10¢, 25¢, 50¢, and $1.

The USD is the most widely traded currency in the world, and holds great weight on international markets. On global markets, prices are often quoted in USD – and USD is the main currency of the trade in things like oil and gas, too.

If you need to exchange your home currency to USD for your trip to the US – or because you’re moving there – you can do so online and through digital providers, or through physical banks and exchange offices. Be careful to check the exchange rates you’re offered as these can include additional fees – a markup – which means you get less USD for your home currency in the end.

When you’re researching currency exchange for the US, take a look at providers like Wise, which offers the mid-market rate, with low transparent conversion fees.

You can open a Wise account online or in an app, to hold and exchange 40+ currencies including USD, all in one place. This makes it easy to see your balance across multiple currencies and manage your money when you live an international lifestyle.

Banking system in the US

The US has a very well developed banking sector with retail banks operating on local, regional and global levels. On a national level, The Federal Reserve (The Fed) sets interest rates and oversees the largest financial organisations.

There are then many different types of banks, alongside other financial institutions like credit unions and licensed money service businesses. Financial services in the US are well regulated, and overseen by many different bodies including the Federal Deposit Insurance Corporation (FDIC), and the Consumer Financial Protection Bureau (CFPB). 

Major banks like Bank of America offer good account services, and also dedicated support for international students and expat professionals. There are also options like Ally Bank – a licensed digital first bank with a good range of services covering accounts and loans.

Other providers, which aren’t banks, also offer specialist services. For example, Wise has multi-currency accounts and payment services which appeal to expats needing to manage their money across different countries and currencies.

Types of banks in the US

Let’s have a quick look at the most common types of banks in the US:

• Commercial banks like Wells Fargo and Chase, which offer checking and saving accounts in USD for individual customers 
• Investment banks and private banking options – which can also be from commercial banks, but may be from dedicated operations like JP Morgan, offering investment and wealth management solutions 
• Credit unions – offering accounts and credit services to specific niche groups of individuals, often based on people working in a specific industry or living in a particular area
• Online banks like Ally Bank which offer a full suite of digital services with no branch network 
• Foreign banks operating in the US which often only service enterprise level institutions, and do not have retail banking options

Bank account types in the US

The most common account types you’re likely to see from US banks will include:

• Checking accounts
• Savings accounts
• Business accounts

Each has their own uses – and many people have multiple different accounts to meet their transaction needs.

Checking accounts

Checking accounts are for day to day money management, and usually hold USD only, with a linked debit card and check book. You can normally manage your money largely online but some transactions can only be made in a branch.

US checking accounts often have a monthly fee, but this can be waived in many cases by holding a specific amount in the account at all times. Other fees apply based on the way you transact, which can include transfer charges and ATM fees. 

Savings accounts

Savings account products can include instant access account and term deposit options, which may get you a higher rate of return if you can leave your money for a longer time. Some banks also offer foreign currency savings products for customers who want to diversify their savings.

Savings accounts often do not have monthly fees but you’re likely to need to also hold a checking account which might mean paying some fees anyway.

Business accounts

Most US banks offer business account products which may be offered to specific entity types. Products are often split up to suit sole traders or startups, SMEs or enterprise level clients, which gives the choice to pick one account and then trade up as your business needs change.

Account fees can be quite different when looking at business products compared to personal accounts.

Save on the paperwork with providers like Wise and Revolut

To open a bank account in the US you usually need a local proof of address like a utility bill. That can be very hard to provide if you’re new to the country.  

The good news is that providers like Wise and Revolut can offer a more flexible onboarding experience, with accounts you can open using a proof of address from your home country before you move to the US. These providers aren’t banks – but they do offer safe services to manage USD and other currencies, with a fully digital application process.

Open your account online or in an app and you can then get US account information to hold, receive, spend and send USD payments easily. Plus you’ll be able to make  international payments and order a card for day to day spending to keep on top of your money whichever currency you use. 

Bank cards and payment methods

The most common payment methods in the US include:

• Cash – used for small purchases and tipping, although digital payment methods are becoming more common
• Debit and credit cards – very widely accepted, including wallets like Apple Pay for mobile payments
• Checks – decreasing in popularity but still an important payment method for USD transfers
• Digital wallets – wallets like Zelle are very popular for splitting bills and making small, instant USD payments to friends
• Buy Now, Pay Later (BNPL) – growing in popularity, options to get credit on purchases and repay in installments, often used in online shopping
• Local transfers – ACH and wires are the most common USD to USD transfer methods
• International transfers – bank wires are used, but alternative providers like Wise also offer lower cost international payments in many cases

Cash

While cash is getting less popular in the US, as in many other countries, it’s still an important payment method. It’s also convenient to have cash on hand for tipping and other small value purchases. Some US stores refuse cash payments, but in many locations they’re legally required to accept cash if that’s how you want to pay.

ATM fees can apply if you’re taking cash out in the US, particularly if you make an out of network withdrawal.

Debit and credit cards

Using a card for a swipe or chip and PIN payment, or making a contactless payment with your card or phone are increasingly popular as payment methods. The older magnetic stripe (mag stripe) cards are still used in the US but are being replaced by chip and PIN options for security.

Debit cards are generally pretty cheap to use domestically, but fees of about 3% can apply if you use a US card overseas.

If you intend to use a credit card, you’ll need to build your credit history to get the best available deal. Bear in mind credit card fees can be very high, in particular cash advance fees and penalties if you don’t repay your bill on time.

Checks

Checks are becoming less popular, but they’re still in use. Checks may be used for paying bills for example, and are usually only USD denominated. Check fees may apply from your bank, to get a new book, or in some cases to cash your check.

Digital wallets

Digital wallets like Zelle, Venmo and CashApp are very popular in the US for instant local payments in USD. Often no fees apply for a low value USD payment, but this does depend on the wallet and the card you link to it. These services are really helpful for splitting bills with friends, but not recommended for large or commercial payments.

Buy Now, Pay Later (BNPL)

BNPL services are common when shopping online and allow you to split the costs of a bill into installments, often with interest to pay. This is a form of consumer credit and should be used with caution – read the terms carefully so you know any fees that apply.

Local transfers

USD to USD bank transfers usually use ACH if they’re non-urgent, or wire payments for larger or urgent transfers. ACH transfers are often cheap or even free, but can have low limits on the amount you can send. Wires are more expensive but may arrive faster and be unlimited in value. Often high value wires can only be arranged by visiting your bank in person.

International transfers 

Banks will usually offer international wires – which can be expensive. Some also offer global transfers which can waive the transfer fee, but which may still include an exchange rate markup. You’ll often find you need to go to a branch in person to arrange your wire if it’s over about 5,000 USD.

Specialist providers which offer digital only payments can be a good solution. Providers like Wise have high value payments with low fees and the mid-market rate. Or you might try OFX, which has no limits and a 24/7 phone service if you need to talk through your payment. Other options include Remitly and Xe Money Transfer, which both offer a broad coverage with variable fees and rates.

Opening a bank account in the US

Opening a bank account in the US should be simple enough once you’re a resident there – but in many cases you’ll need to visit a branch to get everything set up. This is usually the case if you have non-standard documents or are a first time customer at a particular bank.

Once you’ve decided which bank to target, you’ll need to choose an account, check the account eligibility and prepare your documents before you go to your account opening appointment, Usually you must take along:

• Proof of your ID – like a passport
• Proof of address – like a utility bill
• Your SSN or ITIN
• Proof of legal residency in the US – your visa or other relevant paperwork

Major banks in the US

The US has a healthy range of banks and other financial institutions, from regional and national banks, global organisations, credit unions with niche markets, and digital providers. Here are some popular banks in the US across all of these sub-types:

• Bank of America – major US bank with a full suite of services, which also offers dedicated support for international students and expat professionals
• Wells Fargo – large bank branch and ATM network, with broad services covering accounts, credits, loans and more
• Chase – popular bank with core account services, and additional investment tools via JP Morgan, also active in other countries including the UK
• Citibank – global bank with local and international services, including premium accounts for high net worth individuals
• Ally Bank – licensed digital first bank with a good range of services covering accounts and loans
• Navy Federal – largest credit union in the US, with services for active members of the services, veterans and their families, as well as Department of Defense (DoD) employees 

Banking services in the US

• Checking accounts – everyday accounts for the day-to-day needs, often including a debit card and a check book
• Loans – loan services are usually split by need, so auto loans to buy a car for example, with other products for things like home renovation
• Mortgages – mortgages can come from banks or stand alone specialist services, all subject to meeting eligibility rules
• Savings – instant access and fixed term products in USD, with some options in foreign currencies are usually available
• Investments – investment services can focus on wealthy individuals or people saving for retirement 
• Digital banking – digital and internet banking options are usually available, but not all services may be offered without going to a branch
• Business banking – all major banks offer accounts, products, and services to businesses and freelancers in the US

Banking hours in the US

Most US banks open from 9:00 a.m. to 5:00 p.m. or 10:00 a.m. to 4:00 p.m. There may be shortened opening hours on a Saturday, and branches are often closed on a Sunday.

US banking fees and costs

Here are some of the most common banking fees, and average costs in the US:

• Minimum opening amount: often 25 USD – 100 USD where applied – this is yours to spend once your account is operational
• Monthly account maintenance fees: 0 USD – 25 USD on average, with ways to waive the fee often available  
• ATM withdrawal charges: often no in network fee, but costs of 5 USD or 3% if you’re out of network
• Foreign transaction fees: usually around 3% where applied
• Local transfer fees: ACH payments often have no or low fees, local wires can be about 30 USD, with incoming fees of about 15 USD
• International transfer fees: international wires in foreign currency may have no transfer fee, but the exchange rate cost can be quite significant. Arranging a transfer in a branch may cost 30 USD or more
• Other fees: Overdraft fees may be 10 USD/item

The fees which apply to US banks may be unfamiliar. While you’re learning about the costs of banking in the US, compare the costs of using Wise for your international transactions.

Wise uses the mid-market rate and low fees on all transfers, which can keep down your overall costs significantly. There are no hidden fees, and you can see what your recipient will receive in the end before you initiate your payment.

ATMs and cash withdrawals

ATM network coverage and accessibility in the US is very good. Most major networks are supported and you’re seldom far from a cash point.

Be aware of the daily withdrawal limits that apply to your card, and the limits the ATM operator imposes. These limits vary, but you may find you have to take out cash in multiple installments if the ATM limit is low – paying the fee multiple times if one applies.

Out of network ATM use usually costs about 5 USD although some providers have a percentage fee of about 3% instead. If you’re getting a cash advance from your credit card the costs can be even higher. Generally there’s a flat or percentage fee, plus instant interest to be paid – making this a costly way to get cash.

Online and mobile banking

All US banks have online and mobile banking services which offer comprehensive features to check your balance, make a payment, and manage your card.

Providers usually offer 2 factor authentication options for security and also have anti-fraud measures built into their operating processes. For higher value payments you may need to go to a branch to show your ID and verify a transaction, instead of using your banking app. 

International banking services

US banks do usually offer international wire transfers and SWIFT payments, but multi-currency accounts and foreign exchange services aren’t normally available from a US bank. Instead, some banks will send you to their specific wealth management or international division which offers cross-border banking for expats, often with a focus on investments.

Wise can be a good alternative if you’re struggling to manage your international finances with your US bank. Open a Wise multi-currency account to keep your money in the currencies you need side by side and make payments digitally around the world with low fees and the mid-market rate.

While bank transfer fees may be high and tricky to understand, Wise has transparent pricing which allows you to easily see the true cost of your overseas payment or currency conversion.

Building a credit history in the US

As a newcomer to the US you’ll want to build a local credit history to get a credit card, loans and other useful products in future.

Getting a credit card and building your credit history can be a good way to start. Some providers like Bank of America offer credit builder cards which you can apply for, and use to build a good score.

Be careful to repay your bills on time, and don’t max out your cards to show responsible use of the credit facility you’ve been granted. You can check your credit score through various US credit bureaus to see how you’re doing along the way.

Important banking complaints and problems in the US

Most banking services in the US work without issues. However, if you’re unlucky enough to run into problems you can make a complaint to the Consumer Financial Protection Bureau (CFPB). 

Some issues which come up in online reports include banks closing customer accounts abruptly, and without adequate explanation of why. This may occur if there is any suspicion of fraudulent use of an account, or if there’s any issue in the verification processes required to open and maintain the account for example.

Banking security and fraud in the US

US banks do run high level security throughout their operations, but as criminals are constantly trying to find ways to profit it’s still important to take common sense precautions:

• Keep your banking information, passwords and PINs secret
• Review your transactions frequently and report anything that looks suspicious
• Get to know common banking scams and fraud tactics to be able to spot them if you see them
• Use 2 factor authentication on your phone, and do not use digital banking on open wifi networks
• Watch out for phishing and other common email and social media approaches
• Never feel pressurised into making a payment – check for legitimacy, and make complaints to the CFPB if you need to

Practical banking tips for expats

• Having a US bank account is helpful once you arrive in the US – but opening an account with a provider like Wise can be a good plan to manage USD services before you relocate
• Read through your account fee schedule carefully as the costs of your US account might be very different to the costs of your home account
• If you need to manage your money across currencies or send international payments, use tools to track exchange rates, to convert or send at the optimal time
• Consider having several different accounts so you can choose the right account and card for specific transactions, in the US or internationally 

Conclusion: Banks in the US

The US has a strong banking system, with many choices for account and card services. However, features and fees may be very different to what you’re used to, so investing some time in researching the US banking system will really pay off.

Use this guide to get a feel for what to expect from a US bank or credit union, and also how a provider like Wise could help if you’re an expat living an international lifestyle. Choose Wise alongside your local US bank to manage your money across 40+ currencies with mid-market exchange rates, low, transparent fees and no ongoing costs.

Useful resources:

• Bank of America credit cards
• Bank of America fees
• Currency in the US