Can I Keep My US Bank Account After Moving to India?

Moving to a new country involves navigating various financial considerations, including retaining existing United States bank accounts. Maintaining a US bank account is generally possible, though it requires attention to banking policies and regulatory compliance in both the US and India.

Retaining Your US Bank Accounts

Retaining a US bank account after relocating to India is often feasible, depending on your bank’s policies. Many financial institutions permit non-residents to maintain accounts, though services or terms might change. Consult directly with your bank to understand their specific requirements for customers residing outside the United States.

A primary consideration involves updating your contact information. Some US banks may require a physical US address for correspondence, even if you are no longer a resident. If your bank does not allow an international address, options such as using a trusted family member’s address or a mail forwarding service can provide a consistent US mailing address. These services can receive mail on your behalf and forward it digitally or physically to your location in India.

A change in residency status from a US resident to a non-resident can affect the types of accounts and services available to you. Some banks might offer specific non-resident account types or impose different minimum balance requirements to waive monthly fees. While a Social Security Number (SSN) is commonly requested to open accounts, non-residents who do not have one can often use an Individual Taxpayer Identification Number (ITIN) for tax reporting purposes. Providing government-issued photo identification, such as a passport, is typically required for identity verification.

US Reporting Obligations for Foreign Accounts

US citizens and green card holders residing abroad have ongoing tax and financial reporting obligations, regardless of where their income is earned. This includes reporting certain foreign financial accounts to US authorities.

One significant obligation is the Foreign Bank Account Report (FBAR), filed electronically with FinCEN Form 114. US persons, including citizens and green card holders, must file an FBAR if the aggregate maximum value of all foreign financial accounts exceeds $10,000 at any point during the calendar year. This threshold applies to the total value across all accounts, not per individual account. The FBAR is due by April 15, with an automatic extension granted until October 15.

Another reporting requirement falls under the Foreign Account Tax Compliance Act (FATCA), specifically Form 8938, Statement of Specified Foreign Financial Assets, which is filed with the IRS. The thresholds for filing Form 8938 vary based on residency and filing status. For US individuals living abroad, a single filer must file Form 8938 if their specified foreign financial assets exceed $200,000 on the last day of the tax year or $300,000 at any time during the year. For married individuals filing jointly who live abroad, the thresholds are higher, at $400,000 on the last day of the tax year or $600,000 at any time during the year.

Beyond these specific forms, US citizens and green card holders must continue to file US income tax returns annually, reporting their worldwide income. Income earned from US bank accounts, such as interest, is considered taxable income in the US. While living abroad, individuals may be eligible for certain exclusions or credits, such as the Foreign Earned Income Exclusion, which can reduce their US tax liability on foreign-earned income.

Indian Regulatory Framework for Foreign Accounts

Upon becoming a resident of India, individuals are subject to India’s financial regulations, including those governing foreign assets. The Foreign Exchange Management Act (FEMA) broadly governs foreign exchange transactions and the holding of foreign assets by Indian residents. Indian law generally permits residents to hold foreign bank accounts, particularly if the funds were earned while they were non-residents.

Income generated from these foreign accounts, such as interest income from a US bank account, is typically taxable in India for Indian residents. The Prevention of Money Laundering Act (PMLA) also plays a role in ensuring that financial transactions, including those involving foreign accounts, comply with anti-money laundering regulations.

To mitigate instances of double taxation on income, India has Double Taxation Avoidance Agreements (DTAAs) with various countries, including the United States. Under the India-US DTAA, interest income arising in one country but paid to a resident of the other country may be taxed in both states, with specific limits. These agreements provide mechanisms to avoid or reduce the burden of paying taxes on the same income in both countries.

Managing Your US Accounts From India

Effectively managing a US bank account from India requires leveraging digital tools and understanding international transaction processes. Online banking platforms are essential, providing remote access to view statements, pay bills, and monitor account activity. It is advisable to enable multi-factor authentication and use strong, unique passwords to enhance security for online access. Avoiding public Wi-Fi networks for sensitive transactions and using secure, trusted websites or official banking applications can further protect your financial information.

Transferring funds between US and Indian accounts can be done through several methods. Wire transfers are a common option, though they can incur various fees from sending, receiving, and intermediary banks.

Specialized online money transfer services, such as Wise, Remitly, Ria, and MoneyGram, offer alternative solutions for international fund transfers. These services often provide competitive exchange rates and may have lower fees compared to traditional banks. When selecting a service, it is important to compare exchange rates, transfer fees, and delivery times to choose the most cost-effective and convenient option.