Can a Canadian Open a Bank Account in the USA?

It is possible for Canadians to open a bank account in the United States. This can be a practical decision for individuals who frequently travel across the border, earn income in the U.S., own property there, or seek to simplify cross-border financial transactions. Having a U.S. bank account can help avoid foreign transaction fees, streamline bill payments for U.S. properties, and enable direct receipt of U.S. dollar income.

Eligibility and General Considerations

While opening a U.S. bank account as a Canadian is feasible, eligibility criteria vary among financial institutions. Not all U.S. banks offer accounts to non-residents, and some have more stringent requirements. Most banks require a legitimate reason for opening an account, indicating actual financial activity in the U.S.

A U.S. mailing address is often required, with approximately 74% of U.S. banks needing one. This address does not need to be a primary residence; it can be a friend’s address, a property owned in the U.S., or a mail forwarding service. Some banks serving Canadian clients may have more flexible policies regarding the U.S. address.

Required Documentation and Information

Canadians must gather specific documents and information to open a U.S. bank account. A valid Canadian passport is required, often along with a second form of photo ID such as a driver’s license. Proof of Canadian address, like a utility bill or bank statement, is also required.

A U.S. mailing address is frequently required, and proof can include a utility bill, a lease agreement, or a letter from a U.S. resident confirming a shared address. A P.O. Box is generally not sufficient for initial account opening.

For tax identification, a U.S. Individual Taxpayer Identification Number (ITIN) or Social Security Number (SSN) may be necessary, especially if the account will earn interest. An ITIN is issued by the IRS for tax reporting purposes to individuals who do not qualify for an SSN. To apply for an ITIN, individuals must complete IRS Form W-7, providing supporting documents such as a passport or other national identification. Applicants must attach Form W-7 to a U.S. federal tax return, unless an exception applies, and submit original documents or certified copies.

Banks require a Form W-8BEN, known as the “Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals).” This form certifies foreign status for U.S. tax purposes and helps prevent the mandatory 30% U.S. tax withholding on certain U.S.-sourced income, such as interest earned on a savings account. The Form W-8BEN confirms that the individual is a foreign person and may be eligible for reduced tax withholding under an income tax treaty between Canada and the U.S.. This form is valid for three years and must be updated.

Selecting the Right Account

When selecting a U.S. bank account, Canadians should consider account types and features. Checking accounts are suitable for daily transactions, while savings accounts are for holding funds and earning interest. Some banks also offer money market accounts, which may provide higher interest rates.

Minimum balance requirements can vary, with some banks imposing higher thresholds for non-resident accounts. Fees, such as monthly maintenance fees, foreign transaction fees, and ATM fees, should also be reviewed. For instance, the RBC U.S. Direct Checking account has a $39.50 annual charge and a $50 deposit requirement to open, with a limit of 10 debits per month.

Accessibility is an important consideration, including online banking, mobile banking, and the bank’s branch network. The ease and cost of transferring funds between U.S. and Canadian accounts are also important. Some major Canadian banks, such as TD Bank, RBC Bank USA, and BMO Harris, have U.S. branches or partnerships that simplify cross-border banking for their Canadian clients. These banks often offer features like instant transfers between linked Canadian and U.S. accounts.

The Account Opening Process

Canadians can proceed with opening their U.S. bank account once documentation is gathered and an account type is chosen. While some banks offer remote account opening, in-person visits are often required for non-residents. Many banks, including Bank of America and Chase, may require an in-person visit. However, some Canadian banks with U.S. branches facilitate remote opening.

Contact the chosen bank in advance to schedule an appointment and confirm their requirements for non-residents. During the appointment, the applicant will complete the bank’s application forms. The bank will verify the provided identity and address documents. An initial deposit is required to open the account, with amounts varying by bank and account type. After approval, the bank will provide information on debit card issuance and online banking setup.

Managing Your US Bank Account

After opening a U.S. bank account, understanding ongoing responsibilities is important. Tax compliance is a consideration. The Form W-8BEN, which certifies foreign status, is important to avoid U.S. tax withholding on interest income. This form needs to be updated periodically, every three years, to ensure continued exemption from U.S. tax withholding on interest.

Canadians with U.S. bank accounts should also be aware of the Foreign Bank and Financial Accounts (FBAR) reporting requirement. While primarily for U.S. persons, Canadians should determine if their financial situation, including U.S. accounts, triggers this requirement if the aggregate value of foreign financial accounts exceeds $10,000 U.S. dollars at any time during a calendar year. Interest earned in U.S. accounts must be reported on Canadian tax returns.

Ongoing fees and charges, such as monthly maintenance fees and potential foreign exchange fees, should be monitored. Most banks offer online and mobile banking platforms, allowing for remote management. Funding the U.S. account and transferring money between Canadian and U.S. accounts can be done through various methods, including wire transfers or online services. Also, keep contact information, including the U.S. address, updated with the bank to ensure smooth account operation.