How to Compare Foreign and Domestic Bank Accounts

If you're thinking about opening up a bank account, chances are you've thought about a growing option in banking. Foreign bank account have become more popular as banking fees have gone down and internet baking has increased. Although foreign accounts function similarly to a domestic account, there are a few differences. Read on to compare the two types.

Difficulty: Moderate

Instructions

1. Research operating costs. Both American and foreign banks sometimes charge money for checks, yearly maintenance, or for going under the minimum balance. Foreign banks usually charge fees above and beyond that. There can be operating costs, currency conversion fees and more. Make sure you know exactly what you're getting in to.

2. Find out how your money is protected. If something were to happen to your money in a domestic bank, you are guaranteed by the federal government. If a bank defaults, you're protected. But in a foreign country that may not be the case. Security procedures may also be different in other countries. In either case, discussing your money's security with bank personnel is a must.

3. Consider domestic and foreign law. Interestingly, assets held in a foreign bank account are not subject to U.S. law, and so cannot be taken during divorce or other court proceedings. This is a good thing if you're worried about protecting your money from seizure.

4. Compare setup procedures. Foreign bank accounts require authorization documents from U.S. authorities, and often additional documentation. Domestic bank accounts can be set up at will with little more than your driver's license, social security number and a little cash. In addition, many foreign banks require large initial deposits.