The 9 best banks for U.S. expats living abroad

For American citizens abroad, known as expats, maintaining bank accounts in the US has several advantages. These include the convenience of paying bills and conducting transactions in the country, as well as the ease of receiving payroll or Social Security payments.

However, using these accounts abroad can be costly due to high bank fees. For example, using an ATM can charge anywhere from $1 to $5 per transaction if you choose the wrong bank. Without a reliable mobile platform and 24/7 support, accessing funds overseas can be difficult.

Below are nine of the best bank accounts for expats with a proven track record. Some of the banks listed have a large physical presence overseas, such as HSBC and Citi, while others, such as Ally Bank or Capital One, operate primarily online. All banks on the list have been selected with expats and travellers in mind.

Capital One 360

Expats can use the Capital One 360 interest-bearing checking account from Capital One Financial Corp (COF) without paying service fees, foreign transaction fees, or ATM usage fees. These account holders can set up direct deposits to get paid for work or Social Security. In addition, using a debit card overseas does not incur additional fees.

However, it's worth keeping in mind that if you plan to deposit cheques via a mobile app while abroad, there may be restrictions depending on the financial institution you're working with. For example, not all types of cheques may be accepted for deposit through the Capital One mobile app, including those not drawn in US currency or addressed to a financial institution in the US.

Citibank CitiGold

Citibank, a subsidiary of Citigroup Inc, offers its services to expats through its global ATM network available in over 40 countries. This provides customers with the convenience of accessing ATMs anywhere in the world. In addition, through the Citi International Personal Account Package and the Citigold Interest-Bearing Current Account, clients receive a wide range of banking services, including wealth management and financial planning.

In order to maximise the benefits of Citibank's services, clients are required to maintain a minimum aggregate average monthly balance of $200,000 in eligible bank, investment and retirement accounts. If this condition is met, customers are exempt from service fees and receive fee waivers for most banking services, as well as reimbursement of fees charged for the use of non-Citigold ATMs. In addition, depending on the type of Citigold account, wire transfer fees are either waived or reduced.

HSBC Premier

The global presence of HSBC Holdings PLC (HSBC) provides expats with a unique opportunity to benefit from a wide network of operations in 64 countries and territories. The HSBC Premier account offers a number of privileges including no annual fee (subject to certain conditions), no foreign transaction fees and Premier status for family members.

To open a Premier account, customers must maintain a minimum balance of $75,000 in linked accounts with the bank or have monthly direct third-party deposits of at least $5,000, or have an HSBC US residential mortgage of at least $500,000.

For those who cannot open a Premier account, there is an option to open an HSBC Choice or Advance account, which avoid ATM fees in certain countries.

HSBC is renowned for its customer-centric service and will help you open an overseas account before you move. You can also transfer between your HSBC accounts via the mobile app, which is convenient if you have accounts in different countries.

Alliant Credit Union

By opening a high-interest checking account with Alliant Credit Union, you can earn 0.25% APR without having to maintain a minimum balance or pay monthly service fees. Unlike many banks, credit unions typically don't charge transaction processing fees, which can save you money.

While ATM withdrawal and debit card purchase fees for foreigners are typically 1% of the total transaction, Alliant offers a discount on these fees of up to $20 per month.

Some financial institutions charge foreign transaction fees when customers withdraw money from foreign ATMs or make foreign currency purchases with an electronic payment card. These fees usually range from 1 to 3% of the transaction amount.

First Republic Bank

The ATM Rebate checking account from First Republic Bank (NYSE: FRC) offers the convenience of free withdrawals from ATMs around the world, reimbursement of ATM withdrawal fees from ATMs outside the bank's network, and cancellation of transaction fees when using a debit card. The account earns interest while maintaining a minimum amount of $3,500 during each monthly statement cycle. The minimum amount to open an ATM Rebate checking account is $500.

Ally Bank

Although Ally Bank provides services exclusively online, its interface is foreigner-friendly, offering free bill payment and no monthly service fees. Ally Bank also charges a standard foreign transaction fee of up to 1% of the transaction amount when withdrawing money from an ATM or using a debit card. However, additional fees may apply when using ATMs outside the US that are not part of the Allpoint network. It is important to note that a working mobile phone number in the US is required to access your Ally Bank account.

Fidelity Investments

For expats who have investment accounts with Fidelity Investments, the debit card included in the Cash Management Account allows you to withdraw cash from over a million ATMs around the world. However, there is a 1% fee per foreign transaction for transactions in currencies other than dollars, regardless of the availability of currency conversion. The account also offers travel and emergency assistance, as well as accident insurance and a rental car damage waiver.

Navy Federal Credit Union

For members of the armed forces, both active and retired, Navy Federal Credit Union offers additional benefits and services even if they live overseas. You will not be charged an access fee when using International Navy Federal and CO-OP ATMs.

However, it's worth keeping in mind that some CO-OP and other non-NFCU ATMs may charge additional fees. In response, the credit union will pay a reimbursement of up to $10 per statement period to cover ATM fees for direct deposit accounts. In addition, the flagship checking account offers tiered dividend rates with a maximum annual percentage rate (APY) of 0.45% for balances above $25,000.

State Dept. Federal Credit Union

If you or someone you love works for the U.S. Department of State, State Department Federal Credit Union offers a number of benefits to its members. You can choose a basic checking account (no minimum balance), an Advantage account with a $2,000 balance, or a Privilege account with a $25,000 balance. All accounts provide access to more than 30,000 surcharge-free ATMs. Credit union members also have access to a robust online banking system and a 24-hour call centre.

Advantage accounts provide monthly reimbursement of up to $15 for foreign ATM transaction fees, while Privilege accounts provide up to $25. The Advantage account earns a 0.35% dividend and the Privilege account earns a 0.40% dividend.

Remember: There is no one-size-fits-all ‘best’ bank account for expats. Choose the account that best suits your individual needs and circumstances.

Key findings

• US expats looking for the best checking account should decide whether they prefer a bank with a physical location, an online-only bank, or one that offers the best of both.
• You should also consider foreign transaction fees, which can eat up your balance every time you withdraw money from an ATM or make a purchase with a debit card.
• Some banks and credit unions offer reimbursement for foreign transaction fees.
• You may need to meet a minimum monthly balance or other requirements to receive fee reimbursement and other checking account benefits.
• Many of these banks require you to maintain a valid to US mailing address and phone number while living abroad.

FAQ

Q: Why is the right account important?
A: Saves money (low fees); Easy to manage money (online/mobile); Protects funds (security); Access to money everywhere (ATMs).

Q: What features should I look for?
A: Low/no fees; Wide ATM network; Convenient online platform; Mobile app; Native language support.

Q: How do I compare fees?
A: Make a list of important fees; Compare offers of different banks; Take into account hidden fees.

Q: What are the requirements to open an account?
A: Valid passport; Proof of address; Minimum deposit (in some cases); Foreign social security number (in some countries).

Q: How do I find the best account?
A: Determine your needs; Research options; Read reviews; Ask for advice.