Opening a bank account in the United States of America has many different advantages: starting with tax refunds through saving on commissions or receiving quarterly payments from real – estate investments. But how do you do this in the correct way and who can you consult with? Here are all the answers
Opening an American bank account requires showing some form of ID: a passport or a driver’s license. in addition, some of the banks require your Social Security number as well, so it is recommended to find out ahead of time what sort of identification will be requested of you.
This is easy to do in most cities, because of the reason that banks have main offices with easily accessible branches. In the case that the bank that you are interested in does not have a branch in your vicinity, it is possible to use the services of an automatic teller machine or of course get the information from the relevant website.
Documents and Recommended Checks That Are Important to Do Before Opening an American Bank Account
If you are opening a private bank account, you will need to show an American address and it is possible to also add an address in Israel. In addition, an American telephone number must be given, documentation of an American taxpayer of the TIN type, and a minimum of at least $100 in cash needs to be deposited into the account.
A business account would require everything that a private account requires, along with a few more things: an approval to start a business in the stat where this is done, an EIN tax number approval, and a partner agreement. In all banks, whoever opens the account needs to be the manager of the company.
If the company has more partners, they need to physically be there because otherwise they will not be able to be granted access to the account and will only receive it from whoever opened the account.
With that, partners who are in the United States can go to one of the branches of the bank in order to register as partners and receive full access. If the partners do not want or are not able to arrive physically, it is possible to request a form which they will sign in front of a notary and send to the bank for approval.
Usually, the opening hours in which you could get to the bank are regular: on days Monday through Friday between the hours of nine AM to three PM. On Fridays the banks close early and on Saturdays some branches will be operating between the hours of 9 AM to 12 PM only.
In order to choose the correct bank for you, it is recommended to compare between the possibilities according to parameters such as geographical location, commissions on handling the account, digital tools, and more.
Why Open an American Bank Account to Begin With?
The question to be asked is why you should invest time in opening an American bank account. So, first of all, the main reason to do this is of course financial. Using an American bank account open legally in the United States, taxpayers can pay their taxes directly from the account and of course also receive tax refunds directly into the same account. This saves a lot in account handling commissions to the bank and promises for use of rights and tax refunds.
Secondly, an American bank account allows you to receive quarterly payments from real – estate investments across the United States. Instead of transferring the earnings through a number of different accounts or using a mediating service of local holding companies, you will receive your money directly into the existing account.
This is how you make the investment in real – estate the most profitable it can be, whether it is a profit yielding property, an apartment that was bought in order to be rented out, or a house that was in your ownership and you are now gearing up to sell. If you would also like to pay for construction or fixing up for the apartment, you would not have to transfer money from Israel, rather you could do it from your new local account.
In general, it is recommended to open an American bank account in order for all your actions to be more comfortable. This includes the conduct between you and your employers during relocation, your options to receive funding from credit companies, and even the way that you would pay any social service or leisure.
How Do You Build Up Credit?
We could not discuss the advantages of opening an American bank account without mentioning the topic of building up credit. In the United States, bank account owners can build up credit that will allow them to receive a better loan down the line. This exists today in Israel in the form of credit ranking, but the use of it is not as common yet as it is in the United States.
In order to build up credit you must have a credit card from the bank and use it consistently during a number of years. Needless to say, that if the use was done without accumulating late payments or other negative activity, the rating goes up.
Specifically, building up credit by opening a bank account in America and getting a credit card approved are relevant mainly to those who are planning on getting a green card and an American citizenship in a few years.
What Option Is Better: A Private Bank Account or a Business Bank Account?
Excluding those with a criminal record, almost everyone and anyone can open an American bank account, whether it is private or registered to a company. Besides the difference between a personal and business account, every account has different conditions and a different way of being handled.
Some of the banks, for example, demand a minimum of $1000 in the checking account in order to get exemptions from paying commissions on a private account, while the case with a business account is an exemption in exchange for $3000 in your checking account.
As a matter of principle, the recommendation is to choose between a personal account and a business account according to the way that you intend to use it – just like in Israel. in any case, there is no restriction on the amount of bank accounts that you could have, which is why independent workers with a few different businesses need to have a bank account for every single one of those businesses.
What Type of Sub-accounts Can Be Opened?
In the United States it is possible to open different sub – accounts under your main bank account. The main difference is between your regular checking account, savings account, and credit card account. In your regular accounts you will not be able to reach an outstanding deviation situation and if there is no money in cash you simply will not be able to use it, but in your credit account they will accept a credit card for use.
Ultimately, it is recommended to take the checks that are given to you when you open a bank account and check the Commission amounts ahead of time. The most important thing is to make sure that the type of activity that you want to do and the type of bank account that you have are compatible in a situation where you are making a profit as well as consulting with professionals on the subject.
Since the American bank account is dealing in cash only and there is no option to go into overdraft it is recommended to closely follow and even make contact with a banker once in a while in order to check for improvement options in bank services.
