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Banking in the USA: Advice for International Students

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U.S. bankerHaving money available for school expenses, living costs and fun activities is important for international students studying in the United States. However, keeping large amounts of cash is not advisable.  Especially when entering the U.S. There are many problems that you can encounter if you enter the U.S. with large amounts of cash.  Not only is it vulnerable to theft, but it also could be confiscated by the U.S. government upon entering the U.S.   We recommend wiring your first semester/quarter's tuition and fees directly from your home country to the school's bank account.  Then, soon after arriving to the U.S., we recommend you open up a bank account so you can have the remainder of your funds wired to your new bank.  When first arriving in the United States, many schools recommend students bring with them around $2,000 so they have funds for immediate costs, such as housing, food, books, and personal expenses. For security reasons, using travelers' cheques, certified checks/demand drafts,  or a foreign bank card that will work in U.S. cash machines, are much safer options than bringing cash.

How to open a bank account:

For some students, our banking system is very similar to yours.  So, this article is not for you! However, for many countries our banking systems are completely different. 

Some universities will have a partnership established with a local bank, which can be especially helpful for international students. However, you can open a bank account with any bank or credit union using the following tips:

Compare services provided by local banks or credit unions

Be sure to compare interest payments for checking and savings accounts, as well as any fees that might be applied to those accounts. Look for no-fee accounts that also offer you online banking services. Also look for banks that offer student accounts, which might be a better service for your needs. Ask the bank about money transfer costs, because most likely you will be sending or receiving money during your schooling in the states, or want to transfer money back to your home country when you've graduated and are ready to leave.

You can use the Internet to find out how much each of the banks are charging for their services.

 Open an Account

When you decide which bank to use and you are ready to open you account, visit the bank with your passport, funds you wish to deposit (at least $100), your I-20 form and I-94 form.  You will need all of these to open an account. If you have a student ID card, then bring that as well.  This will prove you are a student, which may qualify you for student specials.  

There is a special desk or area where you set up an account.  Most banks will have signs that will direct you in the correct area for new accounts. If there are no signs, or you are not sure where to go to set up the account, then ask one of the bank tellers. 

Type of Account

There are a few different types of bank accounts.  You can find more information about the best type of account for your needs, either online or speaking with the new account bank representative.  The two most common types of accounts are checking and savings.  Most likely you will want to have a checking account so you can write checks for your bills, such as tuition, rent and utilities.  Most people have both a checking and a savings account.  The benefit of having a savings account is you can earn interest for any money that is in the savings account, while most checking accounts do not pay interest on the funds in the account. 

Online Banking

Online banking is a convienent way to handle your money.  It makes it easier to keep track of how much money you have in the bank, as well as, paying your monthly bills.  You can set up bill payment and have checks sent out automatically, so you are not late on any invoice or bill.  Of course, you will have to have funds in the bank to cover these payments or they won't be sent out.  When you are setting up your account, have the bank representative assist you in setting up your online banking credentials. 

With online banking you can download monthly statements, pay bills, order checks, make "stop payments" on checks, transfer money, and many other banking services. 

How Safe is your Money in a Bank

If the bank is insured by the FDIC than your money is safe.  As the FDIC states, "The FDIC is an independent agency of the United States government that protects you against the loss of your deposits if an FDIC-insured bank or savings association fails. FDIC insurance is backed by the full faith and credit of the United States government. Since the FDIC's creation in 1933, no depositor has ever lost even one penny of FDIC-insured deposits." This insurance covers up to $250,000 deposits in the event of a bank failure.   However, if someone hacks into your bank account and steals your money then you are not insured by FDIC.  So, our advice is to make sure you have a very strong password for your online account.  We also recommend that you do not do any banking on a public network, you have a good antivirus program protecting your computer, and you do not open any email attachments or click on any links in an email unless you know the sender and you were expecting an attachment.  This can be hard sometimes, because often the hackers can disguise their viruses or scams as emails that look like they are coming from your bank.  There are a few ways of recognizing that an email is indeed coming from your bank.  1) a bank will address the email to you by your name,  2) the return email or any links in the body of the email will have the URL of the bank, 3)the bank would not send you an attachment without alerting you first, and 4)the bank will never ask you for any personal information via an email. 

If you have any questions about the banking system in the U.S., you can always ask the career counselor at your school. They will be more than happy to answer your questions.

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