Opening a bank account in New York City
In order to open a bank account at a New York based bank you usually have to complete an account opening form either online at the website of the bank or in person at a branch of the bank. Along with this account you have to furnish some documents which are used to verify your identity. The USA Patriot Act is a federal law that requires all financial institutions to obtain, verify and record information of each and every customer that opts to open an account with a bank. The act doesn’t specify a comprehensive list of the proofs accepted but the banks have to obtain proofs for the account holder’s name and date of birth and address. To this end the banks in New York City can ask for a variety of documents as proof of identity and address. These documents include:
- Passport of the individual seeking to open the account
- An alien registration card (green card) or in the case of students, a valid Student ID
- Driver License
- A utility bill which is used to verify the individual’s address
- Social Security Number or Tax ID Number (Tax Identification number – An Individual Taxpayer Identification Number (ITIN) is a tax processing number that is issued by the Internal Revenue Service. The IRS issues these ITINs to individuals who are required to have a U.S. taxpayer identification number but who are not eligible to obtain, a Social Security Number (SSN). These ITINs are issued regardless of immigration status because both resident and nonresident aliens may have U.S. tax return and payment responsibilities under the Internal Revenue Code. Individuals must have a filing requirement and file a valid federal income tax return to receive an ITIN).
As an expatriate in New York City, it is advisable for you to go to the branch of the bank where you want to open an account rather than try and open your account online. If you have an account in your home country with a global bank like HSBC, then a letter of introduction from your relationship manager at your home branch can prove to be extremely useful. You don’t usually have to make an appointment to open a bank account at a particular branch of a bank. Simply show up during banking hours in order to do so. At the time of opening the account it also helps if you can deposit a small amount into the account which is being opened as it facilitates the estabilshment of a relationship with that particular institution.
Once the bank has opened your account you usually receive a check card (ATM card) and check book which are essential tools that are needed to operate your account.
Types of Bank Accounts
Checking Accounts (Current Accounts)
A Checking Account is a simple bank account which typically doesn’t pay any interest. This account can be operated with an associated check book or ATM card. ATM cards are debit cards which are accepted as a form of payment at various different types of establishment. A Checking Account affords a quick, convenient access to your money for frequent transactions. Some banks impose fees for checking accounts and may even charge fees for the check books that you order. Sometimes the fees that the banks charge for Checking Accounts are driven by the balance that is maintained in the account. When opening a Checking Account it is prudent to ask about the fees associated with the account.
Savings Accounts are interest bearing accounts that allow you to make withdrawals but the number of withdrawals or transfers that you make in a month is limited and varies from bank to bank. Savings Accounts also sometimes often attract fees like minimum balance fees.
Money Market Accounts
Most banks also offer Money Market Accounts which are interest bearing accounts that allow you to write checks. These accounts usually pay a higher rate of interest than savings or checking accounts but also require a higher minimum balance. Withdrawals from money market accounts are not as convenient as from checking accounts. These accounts are also subject to fees that vary from bank to bank.
Certificates of Deposit
Term deposits are known as Certificate of Deposit or CDs in the USA. These deposits offer a guaranteed rate of interest for the specific period for which they created. These periods can range from several days to several months and years as well. You are expected to maintain your deposit with the bank until its maturity though sometimes you can withdraw the interest but not the principal. CD’s typically pay higher rates of interest than checking or saving accounts. If you choose to withdraw your funds before the maturity of the deposit you usually have to pay a penalty. The terms that govern CDs vary from bank to bank.
These are the main kinds of accounts available at most of the banks in New York City though each bank also has its unique variations ofthese accounts.