Banking Services in the United States

Why should I open an account at a US bank?

Each student must open an account at a US bank in order to manage your finances. With a bank account, you receive your monthly salary and can manage your bill payments online. In addition, you’ll receive a debit card which allows you to use to make purchases and avoid carrying cash.

When should I open an account?

Accounts should be opened as soon as possible so that stipends can be wired without delay.

There are many banks in my area. How do I know which one to open an account with?

In the United States, there are many different types of banks. Some banks are large banks with have branches throughout the US, as well as some countries abroad. Other banks are local or regional banks, with branches only in some states or cities.

The benefit of a larger bank would be the convenience of finding branches in more places, as well as more services offered to customers. However, some larger banks may also charge more fees compared to smaller banks.

Smaller banks, on the other hand, may be more focused on the community they serve and be able to provide more specific services for the community. For example, some smaller banks are partnered with the university and may have a branch on campus, if not an Automatic Teller Machine (ATM) available to specifically serve students.

Types of Bank Accounts for wiring allowances to Students

Checking Accounts
A checking account is the account type used for regular and daily use.  A student may open a student checking account which typically does not have a minimum balance that the student must maintain each month, nor have many fees for most of the services that come with the account. Students usually will be given a monthly statement on paper, or can view them online. Money can be withdrawn at the bank or through ATM’s by using a debit card issued by the bank. Students are also given a book of paper checks to make payments.

In most cases checking accounts earn you no interest and are usually free to open, but many banks will charge you a monthly fee if the average monthly balance of the account will drop below a certain amount. These monthly fees are usually around $10.00/month. However some banks offer free checking accounts with no imposed limits called free checking accounts.

Savings Accounts
A student may also open a savings account along with a checking account. A savings account is the account type used for savings. Checking accounts do not earn interest, but savings accounts allow for balances to collect interest. For keeping your money in the savings account, the bank will pay you a monthly interest depending on the amount deposited (the interest is low, e.g. from 0.5% to 2% typically). Savings accounts are limited only to a few free transactions per month, they are not suitable for daily use such as checking accounts. 

Money Market Accounts
A money market account is the type of account usually pays a higher rate of interest than a checking or savings account does. A Money market accounts often requires a higher minimum balance to start earning interest. However, withdrawing funds from a money market account is not as convenient as doing so from a checking account. Each month, you are limited to six (6) transfers to another account or to other people, and only three of these transfers can be by check.

How to open a Bank Account? (Instructions)
  • Talk with friends, other students, or schools officials (the International Students Office) about where they have their accounts. Find out what they think and whether they are satisfied with their own banks.
  • Students may also go directly to banks to ask about their services such as student free checking accounts and fees such as minimum balance fees, withdrawal fees, and wire transfer fees. Students should know that they are not obligated to open an account at the bank after visiting them, and should instead open an account after they know that the bank can provide what they need. Students should ask for the list of specific documents they need to open an account during their visit to the bank.
  • Determine what type of account you want. The most typical accounts are checking and savings. A savings account allows you to deposit money and receive interest on the money held in the bank. A checking account generally does not generate interest, but allows you to write checks.
  • Determine what services are important for you – low prices, Automatic Teller Machine (ATM) access, and customer service by phone, internet banking or how close the bank is to your apartment or dorm.
  • Go to the bank of your choice to open the account.
What do I need to open an account?

This will vary depending on the bank and its location. Usually the following items are required:

  • Two pieces of photo identifications (ID), one of them must have photo (passport, driver’s license, etc.). The other one can be a non-photo ID, like another bank card, social security card, university identification card, etc.
  • Fill out an application.
  • Money to deposit at the moment of opening. Usually this is about $100 in cash or a checkbook, but for student checking accounts it can be as low as $25.
  • If is necessary, your Social Security Card. If you don't have a Social Security Number, shop around and find a bank which doesn't requires a SSN. There are lots of them. Students who just arrived from the UAE will not have a SSN as this number is only issued by the US Federal Government to students who have authorization for employment. In this case, some banks may be able to use student identification numbers issued by the university instead for opening new accounts.

Some banks will require a proof of local address, like a postmarked envelope addressed to the student.

If the bank requires any additional financial information regarding your scholarship program, please don’t hesitate to have them contact the Cultural Division.

Once your application is processed you will be given an account number as well as an ATM card if you choose that option. You will also be given a book of checks if you decided to open a checking account.

What do I get when I open an account?

Students will usually be offered a student checking account. A student checking account typically does not have a minimum balance that the student must maintain each month, nor have many fees for most of the services that come with the account. Students usually will be given a monthly statement on paper, or can view them online. Money can be withdrawn at the bank or through ATM’s by using a debit card issued by the bank. Students are also given a book of paper checks to make payments (hence the name checking account). A common feature at almost all US banks today is the issuing of debit cards by Visa or MasterCard, allowing students to directly use money from their checking account to make payments by using the debit card anywhere Visa or MasterCard cards are accepted. With clearance from the bank and for a fee after each use, students can also use their debit cards abroad anywhere Visa or MasterCard are accepted to make purchases or withdraw money from an ATM.

Depending on the bank, students may also open a savings account along with a checking account. Checking accounts do not earn interest, but savings accounts allow for balances to collect interest. Savings account also cannot be accessed for payment use through checks or debit cards, but may be withdrawn from through a visit to the bank or the ATM.

Students should also find out about the type of fees charged by banks. Most banks will charge a “wire transfer fee” anytime money is transferred by wire to their accounts by deducting a percentage from the total money sent. This fee will vary at different banks. A bank may also charge a few dollars for withdrawing money from ATM’s that do not belong to the bank. Also, students should verify whether their checking account has a minimum balance fee/maintenance fee, which charges students a fee for keeping less than a certain amount in their accounts.

Other services, fees, and conditions may apply, but will vary from bank to bank. It is best for the student to ask about the services at each bank that is being considered.

What account information should I give my Academic Advisor at the Cultural Division?

In order to process the disbursement of salaries, Academic Advisors will need students’ checking account number, bank routing number (which can be obtained by asking the bank teller), and student’s current address. This information should be passed to the respective Academic Advisors as soon as the student has an account opened.  The best way to send this information is by sending a copy of a check with the word “VOID” written across it in big letters.  It is not acceptable to send the information in the text of an email due to security and accuracy concerns.  If you make a typographical error in the email, your payment will be delayed.

Are US banks safe places for keeping my money?

For the most part, US banks are safe. Almost all US banks are insured by the Federal Deposit Insurance Corporation (FDIC), meaning that if customers have less than $100,000.00 dollars at the bank, the US Federal Government assures that customers will get their money back should the bank go out of business. Students can ask bank staff about this if they have further questions.

US banks also do their best to protect customers from fraud and identity theft. Identity theft is where another person assumes the identity of another person to access their money, whether through bank accounts or credit cards. It is almost standard today that banks provide secure websites for customers to view their accounts online. Banks may not release certain information through the telephone or email to avoid fraud. Some banks even let customers use their thumbprints to digitally sign in when they see a teller.

As a precaution, students should be aware of fraud and identity theft. As much as banks try on their part to prevent it, it is also the responsibility of students to protect their financial information against fraud. Students should never give out their Social Security number, bank account number, ATM personal identification number (PIN), and credit or debit card numbers to anyone who has no business knowing it, especially through the Internet (exception would be your MOHE academic advisor, who needs this information to process your stipend/salary). Students should also never loan out their debit or credit cards to anyone. Banks and other companies would NEVER ask for those numbers through email. Past banks statements should be shredded, as well as any credit card offers that come through the mail. Students are encouraged to have the habit of regularly checking their accounts to ensure that there are no mistakes in the amounts. More information about protecting against financial fraud can be obtained through the international student office as well as university police department.

Should I get Credit Cards?

This is a personal choice. Almost all banks now offer Visa or MasterCard credit cards through them. Other US credit cards exist, such as Discover and American Express. Large retail stores may also offer Visa or MasterCard credit cards that allow customers to use their cards anywhere, but give the extra perk of having discounts whenever they use their cards at their stores. There are also charge cards issued by petroleum companies and large stores that allow customers to use their cards for purchases specifically at their stores.

To open a credit card account, students must fill out an application and have a Social Security number as credit records are tied to that number. The application will typically ask for information like income, monthly bills, and any other debt that an applicant might have. This is to verify if the monthly credit card payments can be afforded. Applications may be rejected if the company has reason to believe that the application cannot afford to make the monthly payments. Students should further consult available financial advisors at their banks on this matter as there is certainly more information on this matter that cannot be completely discussed here.

Tips and Warnings
  • Consider how many ATMs the bank offers, whether they charge a fee and whether 24-hour customer service is available by phone.
  • Low prices do not always mean the best choice. Look into the services you are getting for your money. Do they meet your needs or will you have to spend extra to get those services.
  • Make sure that the bank with which you open an account is Federal Deposit Insurance Corporation (FDIC) -insured, which means your money is insured up to $100,000. FDIC-insured institutions must display an official sign at each teller window or teller station. You can also verify whether an institution is FDIC-insured by searching insured banks on the FDIC's website or calling the FDIC's Division of Compliance and Consumer Affairs (DCA) toll-free at 800-934-3342.