Introduction

Navigating a new country’s financial system can be a daunting task when you’ve just begun to settle in. As you’re finding your way within your new community, building a strong financial foundation will be massively helpful to reach your goals.

How to Use This Resource:
This hub is intended to help you gain a clear understanding of the U.S. financial system. The questions and scenarios here are meant to answer important questions to help find the best options to fit your needs and build strong financial habits for the future.

As you review the table of contents below, make note of which sections and topics address your needs most directly. In general, these topics are listed in order of descending priority, meaning that for a brand new immigrant, the most important topics are at the top—like setting up a bank account and making sure you have money readily and securely available to you. Then, as you gain your financial footing, topics further down this hub, like building credit and fraud scams later may become more applicable. And be sure to keep this page bookmarked as updates are made and new topics are added!

Banking Basics for Immigrants

Have questions about starting a bank account? Or maybe you’re curious which bank to choose? This section is for you.

The first step to setting yourself up for financial success and security in a new country is opening a bank account. With hundreds of banks to choose from in the U.S., it can be difficult to know where to start. But rest assured there are plenty of options to choose from – many of which may cater to immigrant communities in your area.

By opening a bank account, you’ll be giving yourself, your friends, and your family a valuable resource for the future. Here’s what you need to know to get started.

Opening a Bank Account
It’s a common misconception that you won’t be able to open an account as an immigrant. Every country has its own financial rules, but in many countries, you can open a bank account with the right information such as your Alien identification number.

Opening a bank account should be at the top of the to-do list. Whether you do this first thing when you arrive in your new country, or even before, you need a secure place to put money so you can access it when you need it.

Choosing the Right Bank
It’s important to choose a bank that is right for you. So, before you open a bank account, start by researching the major bank options in your new country. Read about their offerings, features, fees, and benefits; speak to friends or acquaintances about the banks they use; and compare them to see which one fits your needs best. With this information you can find the bank with features that are worth paying for.

Once you’ve identified the right bank for you, you can open an account at a physical location, or in many cases, online.

Required Documents to Open an Account
As we mentioned earlier, you can open a new bank account as an immigrant as long as you have the proper documents. Here is a list of the most relevant documents that all immigrants – not just undocumented ones – can use to help open a bank account without a Social Security Number. They may include:

An alien identification or passport number
A government-issued identification from a foreign country
An Individual Taxpayer Identification Number
Personal information such as your name, birth date, and proof of physical address in the U.S.

The bank will use this information to verify your identity when opening a new account.

What to Consider

Before opening a bank account in the U.S., comparing features and the fees you’ll pay is a good idea. With different terms and requirements for each one, we’ve highlighted some banking options for non-residents of the U.S. in this post. Here are some features you’ll want to consider as you compare your options when opening a U.S. bank account:

Monthly Fees
For many checking accounts, the bank assesses a regular monthly maintenance fee to cover the cost of administering your account.

The bank may also waive this fee if you meet certain requirements, such as having a direct deposit go into the account regularly or if you meet a minimum balance requirement daily or monthly.

However, many banks don’t charge a monthly maintenance fee at all, so do a search, especially if you don’t think you can meet the monthly requirements.

Other Fees: ATM, Overdraft, Foreign Transaction
ATM fees: While many banks don’t charge a fee to use machines in their network, you may be charged a fee if you use a third-party ATM or one run by a different financial institution.

Overdraft fees: If you make a purchase or withdrawal that brings your bank account balance to less than zero, you may be charged an overdraft fee.

Foreign transaction fee: If you make a debit card transaction outside of the U.S., you’ll likely be charged a fee that typically amounts to anywhere from 1 to 3% of the amount you spent or withdrew from an ATM.

Minimum Opening Deposit
Banks may require you to deposit a certain amount upon opening an account. The Consumer Financial Protection Bureau reports that this initial amount could be as small as $25 to $100. This is meant to cover the overall cost of maintaining the account for you.

But don’t worry if you don’t have much money saved to open a bank account—you can likely find a bank with at least one account that lacks a minimum opening deposit requirement

Transferring Money to a Bank Account

There is no shortage of ways to send money to another bank account. If you just opened your new account, you’ll need to deposit some money there to start sending. This can be done with cash – just head to a physical bank location or ATM and complete the transaction in person – or a check, which you can deposit in-person or through the bank’s mobile app.

If you are looking to send money to someone else’s bank account, the most common methods include: writing a check, using a debit card, using a credit card, and making the transfer through your banking app or website.

Depending on the method with which you send your funds, you may experience wait times or transfer fees. To learn more about transferring money to bank accounts, this story has additional details.

Understanding Checking and Savings Accounts
Checking accounts and savings accounts are the primary accounts you’ll use to deposit and transfer your money. We’ve highlighted some of the primary considerations and differences between the two here, but below is a quick breakdown of how to use them and what the differences are.

Checking Accounts:
Your checking account offers easy access to your money and is typically where you store funds for regular spending. You can withdraw this money through a debit card, paper checks, or bill payments that pull money directly from the account.

Some banks offer certain checking accounts that require you to maintain a minimum balance, or you may be charged additional maintenance fees. However, many banks now offer no minimum balance requirements. To avoid that, check the details with your bank and ensure you have enough funds in your checking account when making payments.

Savings Accounts:
Your savings account is meant to hold money you don’t want or need to spend right away. While you may regularly withdraw from your checking account, the money in your savings account could be for safekeeping over a longer period of time, to pay for specific financial goals, or as an emergency fund for unforeseen expenses.

While the Federal Reserve removed withdrawal limits on savings accounts in 2020, your bank’s policy may still limit the number of withdrawals you can make or the amount of money you can withdraw from your savings account each month, making a savings account less functional for daily use than your checking account.

Online Banking and Mobile Apps
Visiting a physical bank location can be time-consuming and inconvenient. Fortunately, the adoption of online banking and mobile apps has made banking accessible for anyone with a smartphone. The top banks all offer helpful mobile applications and online-only banks work just like brick-and-mortar locations, which allow you to make transactions from the comfort of your couch.

If you’re looking for an online bank in the U.S. that fits your needs, we compiled a list of the best options available – and why they might work for you – here.

Sending Money Internationally

There are many reasons to send money across borders, from one-time gifts to holiday celebrations—these are the basics about sending funds internationally.

According to the United Nations, about one in nine people globally are supported by funds being sent home by immigrant or migrant workers living in other countries. These international payments play an important role in people’s lives and often help cover necessities like utilities, food, or clothing.

So whether you’re sending money to celebrate holidays, as one-time gifts, or as recurring support for friends and family back home, going through secure methods is vital to make sure that funds make it where they need to. Here’s what you need to know about the process.

Options for International Money Transfers
We’ve already covered how to send money to another bank account within the same country. Transferring money abroad can be just as easy.

Wire transfers are a safe and secure method for international transactions and can be completed in-person at your bank or through the bank’s app or website. While domestic bank-to-bank wire transfers may take as little as one business day, international wire transfers can take up to five business days or more. Depending on the currency, institution, and the countries where funds are being sent from or received, these transfers could take longer.

Remittance providers, like Remitly, are another way to send money quickly and conveniently across borders. With these services, delivery can happen fast. Learn more about international money transfers here.

Fees and Exchange Rates
Keep in mind that there are usually fees associated with sending money internationally, with rates varying depending on your financial institution and where you are sending the money. If you want to make sure that the most amount of money makes it to the recipient each time you send, it’s important to regularly monitor how these fees and rates are changing over time.

Electronic fund transfers (EFTs) are usually transferred by the Automated Clearing House (ACH) network, which serves as a middleman between financial institutions. You can learn more about how these fees and exchange rates work in this post.

Safety and Security in Money Transfers
To ensure your funds and information are protected when sending money internationally, only use financial providers you are familiar with.

Your preferred bank should have your needs covered, while remittance platforms also have security measures in place to keep your data – and funds – secure.

Budgeting and Saving

So you’ve got your money set aside. Now it’s time to build a budget and use it effectively.

As a new immigrant, it may take a few months for you to establish a routine and get your primary expenses like transportation, housing, food, or utilities in order. But once you have a solid understanding of how the costs of daily life add up, building a budget can be a helpful guide in making the most of your money to keep your spending and saving on track – and make sure you’re covered in the event of any unforeseen circumstances.

Creating a Budget
Opening a checking and savings account is a great first step, but in addition to having a place to deposit your funds, you should also have a personal plan for how you’re using them. Building a budget is an important aspect of establishing healthy spending habits and building towards your financial goals by understanding where your money is going each month.

Start by reviewing your total income. Then calculate your monthly expenses and assign them different categories such as rent, groceries, utilities, etc. Add in the non-recurring expenses too, like subscriptions or memberships that don’t charge every month. From there, see how you can allocate your income to cover those costs each month and what you have leftover that you can save.

For a more in-depth guide on building a budget, read the breakdown in this story.

Tips for Saving Money
A budget is just the first step in saving money. By tracking your expenses and income, you can figure out how much money you’re able to save each month. This guide offers a few additional steps you can take to maximize your savings.

Budgeting apps can also be a helpful tool to help track your spending and progress. They’ll be able to see the trends in your spending over time and understand where your money is going. We rounded up 15 of the best budgeting apps in this post to help get your expenses in order.

You can also help save money by establishing other types of savings accounts, such as high-yield or money market accounts that help you build a budget and stick to it while saving for the future. Learn more about those accounts here.

Emergency Funds
When you’re new to a country, you should not only find ways to use a savings account to build up your funds, but also prioritize an emergency fund. General guidance recommends having about six months of expenses on hand. If you can, allocate a certain amount each month that you can stow away to remain untouched unless an emergency presents itself.

These funds are meant to be used only when you really need it – such as flying home, paying for urgent medical bills, or covering necessities if you lose your job.

If you lose your job or have an accident, your emergency fund has you covered, allowing you a few months without regular work. Having these expenses covered offers peace of mind and additional security just in case something happens.

Building and Managing Credit

Your credit can be an important tool for long-term financial success. Here’s how it can lay the foundation for the future.

Credit is an important element of your financial life. However, it takes time and effort to build a strong credit history. And for immigrants who have only just arrived in a new country, you may not have any credit history to point to. That can be a big barrier to entry as you speak with lenders who review your creditworthiness. Fortunately, even if you have no credit history at the moment, you can begin the process of building an excellent credit score that can be incredibly helpful in the long run. Consider this your crash course on building credit.

What is Credit and Why It’s Important
Your credit score is what many financial institutions, specifically in the U.S., consider when you apply for things like loans, credit cards, apartment leases, and more. A credit score is meant to act as a measurement for how likely you are to pay back the money being provided to you.

For immigrants, it’s not always clear how to build a credit score and when you move to a new country, your credit reports don’t always transfer—meaning that you’re starting at square one in terms of credit history. Compared to someone born and raised in the same country, it can be harder for immigrants to establish their credit history.

Understanding Credit Scores
The first question when it comes to building credit is often, “What is a credit score?”

In the U.S., a FICO credit score is created through the three major credit bureaus, Equifax, Experian, and TransUnion. They develop a credit file to show whether you’re likely to pay your bills on time. It is based on five key factors: payment history, amount owed, length of credit history, types of credit you use, and new credit accounts.

Those factors combine to develop a credit score that ranges from 300-850 and outlines how likely it is that you’ll be able to pay back money that you borrow. Experian explains that good credit could be the difference between being approved or denied for an important loan. With a score closer to 300, it may be a struggle to get credit. With a score closer to 850, it could be more likely that banks, credit card companies, and other organizations will be willing to lend you money.

How to Build a Credit History
While opening a bank account has some clear and actionable steps, building credit is not always so simple. But it is an important step to start and will make applying for loans, credit cards, and apartment leases much easier.

Getting a debit card, credit card, and/or bank account is a great way for immigrants to start building credit. Opening a credit card and establishing a consistent payment history is the most efficient way to start.

Using your credit card responsibly – by paying it off in full each month, not using the entirety of your allowed credit line, and managing your expenses – will build your credit history and help any time your credit report is pulled as part of an application process for mortgages, car loans, or employment. Regular use and consistent payments can vastly improve your credit, while late payments or not paying off the balance will negatively affect your score

As a non-resident, you can apply for a credit card in the United States. However, without an extensive history, it may be difficult at first. In this post, we dive into some of the other key aspects of building credit as a new immigrant.

Getting a Credit Card
A credit card is the simplest, most straightforward way to establish good credit habits. But as a new immigrant, getting a credit card can be a challenge because most credit card companies will require some form of credit check as well as a social security number. You may need to provide earnings information and employment history, as well as personal information such as a U.S. address, name, date of birth, and details of your current citizenship.

One alternative to a traditional credit card is a secured credit card, which allows you to build credit even with limited financial history.

What Is a Secured Card?
A secured card is a credit card that requires a security deposit before you can spend any money on it. Once you’ve been approved for a secured card, your provider will require a certain amount of collateral in exchange. The amount you can borrow on the card is the same as the amount of the deposit, meaning lenders’ funds are protected if you fail to pay back the money.

For someone looking to start their credit history, a secured card is a great option because it allows you to build your US credit score while also providing a path to accessing unsecured credit in the longer term. For instance, if you pay off your balance regularly and on time for a certain number of months, some providers will allow you to switch to an unsecured card.

Avoiding Financial Scams & Fraud

Financial scams are all around us. Whether you’re new to a country or a long-time resident, keep your eyes peeled for signs of fraud.

Picture this: you’ve saved up for months, immigrated to a new country, taken the steps to open a bank account, and started building a budget for the future. Then you see an email that looks like it’s from your bank, asking for account details, so you reply. All of a sudden, your checking account is down to $0. After all that hard work, you’ve fallen victim to a scam or fraudster. Unfortunately, these types of financial scams are all too common. Most of them target people who simply aren’t paying close enough attention to the signs of fraud – which means it’s on you to constantly watch for suspicious activity surrounding your finances.

Common Scams Targeting Immigrants
Scams aimed at accessing people’s financial information are increasingly common. Phishing attacks are the most common type of cybercrime. A 2023 phishing report revealed a 47.2% increase in phishing attacks in 2022 compared to 2021, showing that these attacks continue to rise.

Rather than hacking into computers to access sensitive information, phishing attacks try to fool victims into willingly offering their personally identifiable information. This is typically done through emails, email attachments, or text messages disguising themselves as reputable organizations, such as your bank.

There are many other methods that criminals use to try and steal your information as well, ranging from posing as a shipping carriers, government agencies, charities, and more.

This post highlights some of the most common methods aimed at using your personal information to gain access to your finances, with details about how to keep yourself secure.

How to Protect Yourself
There’s no way to prevent phishing attacks. But if you do become a target of them, you can control whether you are affected.

Keep a watchful eye for suspicious emails and text messages and don’t provide any private information to those who may not seem trustworthy.

Here are a few specifics signs to watch out for:

Typos and grammatical errors
Questionable subject lines
Logos that don’t match the official website
Website links or addresses that are a series of random letters and numbers
Incorrect information, like your name not matching your account
Email addresses and phone numbers that don’t match those of the organization

Banking and Financial Literacy Hub for Immigrants