· Bernhard · blog · 3 min read
Banking
Foreign bank accounts for American citizens
When moving abroad, you probably want, or need, a local bank account. Alas, if you are a US citizen, you will soon find out that most non-US banks do not want you as a customer1. The reason is the rather onerous reporting requirements imposed on foreign banks doing business with US citizens.
Fortunately, in Switzerland at least, there are a few exceptions: UBS, Migros Bank, and a few others accept US nationals. However, the process is a bit more complicated and takes longer. I am still waiting for my account with Migros. Since I need banking sooner (for health insurance, rent, etc.), I started looking for alternatives. And indeed there are!
Wise.com2 is primarily known for converting currencies, but actually functions reasonably well as a bank account too. Creating an account online is easy. And since Wise is a registered Money Service Business (MSB) in the United States, the US treats it like another institution, at least as far as I understand.
Once you have the account, you transfer money into it from a US institution using a process called ACH. You set this up by giving your bank the account number and routing information of your Wise account and following their instructions. This takes a few days or weeks, but once set up, transferring money is typically instant and free.
Now, set up accounts in Wise for each currency you want to use. I found that converting large sums incurs smaller fees than many small conversions or relying on Wise to automatically convert funds.
In Europe, transfers go by IBAN or SWIFT. Typically, you just upload invoices to Wise and it finds the correct numbers and even the amount. If all looks good, you just hit submit. This type of transfer costs about USD 2; at least for small transfers, a local bank account should be more efficient.
As an added benefit, Wise offers a Visa debit card. The electronic version that you upload into the Apple Wallet is free. So are payments, provided you have the funds available in the required currency. I will test out this feature when traveling in the Eurozone and update this post if I encounter issues.
