Banking problems immigrants in USA face

Banking problems immigrants in USA face

A substantial number of immigrant families do not use banks. Rather, they exist solely within a cash economy. That makes it expensive — in terms of time and money — to make most payments in modern society. Take, for example, a simple utility bill. Where a native-born resident can make an electronic payment from their checking account (probably automatically), an immigrant family with no bank would need to either make cash payment in person or purchase a money order. Multiply this by the dozens of similar transactions you make every day.

Also, staying out of the banking system further exacerbates the credit problem mentioned above. It slows the accumulation of credit, making loans more difficult to attain and more expensive to carry.

If an immigrant cannot open a bank account because a bank or credit union doesn’t want to accept their identification, that immigrant may also have trouble accessing other financial services that require a banking account, such as a mortgage or credit card. It can be hard to get a cell phone without a bank account or a credit card, too.

Here’s a related problem: Without a bank account, and absent an employer program that deposits workers’ pay to a prepaid debit card, some immigrants are forced to cash their paychecks. Unbanked immigrants not only risk losing their money but also risk being victims of physical violence.

How long does it take to open a bank account in the US?

Well, it depends! And so does the complexity of the process. It may take anywhere from a few hours to a few weeks. It depends on the Bank you have chosen, your personal history, documentation and location. Some banks even require a couple of visits to the local bank branch.

How long it takes to open a US bank account depends on the following:

·       The type of US Bank Account you are applying for

·       Whether you have a US identity (an SSN)

·       Whether you are a resident or non-resident & proof of residence

·       Whether you want to open your account online or in-person

·       Documentation

·       Processing time (this can vary)

You need to know several things before opening a US bank account as an immigrant;

Process to get a US Bank Account with timeline

Step 1: Gather your Documents

The first and foremost of your tasks at hand is knowing what documents will be required to open a US Bank Account and then getting them ahead of time. You don’t necessarily have to have an SSN to open a US Bank Account. You can get a basic account opened for all your purposes using your Indian passport and Visa details. You may check the list of documents required in our guide to opening a US bank account. If you already have the required documents, then proceed to the next step, if not, the time taken to open your US Bank Account will have to factor in the time taken to apply for / get your documents.

Step 2: Select a US Bank and choose the type of account

This is one of the most critical steps because you have to select a US Bank that offers services that best cater to your needs. E.g., a checking account is suitable for making a large number of transactions, but isn’t used for saving your money as it doesn’t pay any interest. If you are a student in the US, the interest rate will not make much of a difference. Most accounts for everyday use are checking accounts and if you are opening your first bank account in the US, you are most likely looking for a checking account.

 Look for indicators whether the US Bank you are looking to open an account with is immigrant friendly. Broadly, look for the following aspects when selecting a US bank account:

·       Security deposits (if any)

·       Transaction limits & fees

·       Minimum balance requirement

·       Penalty Charges

·       Cross border transactions (Required for any payments you might want to make in India)

·       FDIC insured

·       Good Reviews

·       Do they offer affiliated products like a Credit Card?

Try to complete this step, before you move to the US so that your paperwork is done, and you can open your US bank account from India itself and start to operate it as soon as you land there.

Many traditional US Banks need you to have an SSN and have a minimum balance requirement. They may also have yearly maintenance charges. Moreover, they might not be as flexible to your needs as you’d want them to. They have apps which are not as advanced or flexible as many other new players. So, you may want to look at Neobanks that have features that cater to your needs and give you access to your US bank account – e.g. with minimum annual charges, no minimum balance requirement, and even interest on your savings. With the right Bank, you may be able to do this even before you fly to the US so that you can focus on more important things once you land, essentially reducing the time to open a US bank account.

 Step 3: Contact your bank

Once you have selected the bank and the type of account, you should contact the bank to start the process to open your account. Depending on the bank, this can be a completely online process. Some banks may ask you to physically visit a branch, which increases the net time taken to open your US Bank Account. Many banks allow you to open a US bank account as a non-resident, but they ask for your social security number/ITIN and proof of address. Since you have no credit history, there may be some restrictions on your account for the initial few months, and you would be required to make an initial deposit. If you don’t have proof of residency, you may have to contact the local bank branch and understand their requirements properly, as it is tough to open a US bank account without it. Also, these requirements are slightly different for people who are temporary residents (like students) and those who are permanent residents.

If you have selected a US bank with its branch in India, you can contact the local branch, and they’ll facilitate the whole process. But this is a slow and lengthy process.

As mentioned before, try to opt for a Bank which has a completely online process and can be completed from India.

Step 4: Submit the US Bank Account Application form

If you decide to go with a traditional bank, once you are in the US, you may visit the bank and start your process. This is a time taking process, and you may have to get an appointment beforehand. You’ll need to fill the application form and submit the relevant documents. The time taken to process your application for an account and allot an account number varies from bank to bank, but typically takes a few days. And for your debit/credit card, you may have to wait up to 10 days to get your physical card.

What if my US bank account application is denied?

The US laws and regulations forbid banks to discriminate based on immigration status. U.S. banks may treat you as a risky customer because of the lack of your financial history in the country. To understand why your request was rejected, you may ask for the analysis report and request for revaluation.

In that case, you may opt for “second-chance banking accounts” provided by some major players like Wells Fargo, BBVA, etc. These accounts help you build your banking history and credibility in the US banking system but come at the cost of high monthly charges, minimum deposit requirements, and other restrictions

  Solution

If you want to open a U.S. Bank Account in India, you can apply for the same with Zolve. With a completely online process and minimal documentation, you can set up your U.S. account in as little as 5 minutes. You don’t need an SSN, no minimum balance, and no monthly fees, and all this can be done online, from the comfort of your home. You can also apply for a credit card to make your move to the U.S. even easier.

Mubashir Jani

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