Comparing Fees and Charges for Foreign Transactions and International Wire Transfers Across Us Banks. A Guide for Expats, Remote Business Owners, and Non-Resident Aliens.
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The average expat/ nomad can pay over $1000 annually just to use their card abroad.
International business owners can expect to pay over $40 in fees for each wire transfer.
You can avoid or minimize fees by choosing the right bank for your needs.
In this post we’ll compare different US banks and help you decide which one is the best option for you.
We’ll lay out the options for individuals and businesses. We’ll also recommend banking options for non-residents.
Keep reading to see which US Banks are the best for foreign and international transactions.
What are Foreign Transaction Fees?
Foreign transaction fees are fees set out by your bank for carrying out any transactions while abroad. This could include ATM withdrawals, purchases, and payments.
You might be an expat, or a digital nomad. Your bank is in the US. You’re not yet able to open a bank account in your chosen country. Or maybe you travel often and it doesn’t make sense to change your banking country.
Recommended Article: Expats Can Receive Their Mail 100% Remotely, Find Out How
While abroad, you’ll need to either withdraw cash or use your card to pay. Or both. Every time you use your card you’ll be charged fees. These are foreign transaction fees.
If you’re staying abroad for a week-long vacation, it doesn’t matter. However, if you’re an expat or a nomad, the fees will add up to a substantial amount. It makes sense to choose a bank that will save you money on fees in the long run.
Similarly, if you’re a non-resident alien receiving money into a US Bank account (for example for your LLC), you’re likely either using the credit card abroad or wiring your money to a foreign bank.
How Much are Foreign Transaction Fees?
Foreign transaction fees are around 3%. This can vary from bank to bank. But taking that as an example, if you spend an average of $3000 per month to cover your living costs, you’ll pay $90 in fees each month. That’s $1080 every year, just for using your card abroad.
What are International Transfer Fees?
International transfer fees are fees set out by your bank for wiring your money to a foreign bank account.
Many expats, digital nomads, business owners, and non-resident aliens are wiring money abroad frequently.
For example, if you’re an expat but receive your income/ pension to your U.S bank account, you might be regularly wiring your money to your foreign account. This way you can set up standing orders, and use your foreign card without fees in your country.
Same if you own an LLC in the USA, but are living somewhere else. You’re wiring your earnings to your home account for use in your country.
How Much are International Transfer Fees?
International wire transfer fees vary a lot between banks. The average cost is around $49, but you can pay as much as $80. It’s important to note that your receiving bank can also charge you a fee for an international wire transfer. The fee on the receiving end is usually lower, the average in the US is $15.
TIP: Make sure to check the fee for receiving an international wire transfer with your foreign bank.
Which Banks are Recommended for US Citizens?
If you’re a U.S resident that either travels a lot or is sending money abroad frequently, we recommend the following banks.
Capital One 360
Capital One 360 offers a special no fee account. This account doesn’t charge any fees on foreign transactions, but it does charge for international wire transfers. The fee is around $40.
This is a perfect account if you’re only using your US bank card/ account to withdraw cash at ATMs and make card purchases.
Charles Schwab Bank
Charles Schwab Bank also offers no foreign transaction fees, and they reimburse you for any ATM fees you’re charged while abroad.
This is especially useful because many ATM providers charge anywhere from $1 to $10 for withdrawal. Charles Schwab will cover this fee for you so that you can really enjoy no fee foreign withdrawals and transactions.
HSBC is an international bank which, unlike some other banks, will allow you to wire money internationally without fees. This is as long as both accounts are HSBC Premier accounts.
Since most wire transfers cost around $40, you’ll save yourself at least $500 per year. You’ll also be able to manage your international accounts from a single place.
Similarly to HSBC Bank, Citibank offers free international wire transfers to other Citibank accounts. And you don’t have to sign up for a Premier account like with HSCB Bank. Before opening this bank account, check if your designated country also has a Citibank account and if you meet the requirements to open the account.
Which Banks are Recommended for Non-resident Aliens with an LLC?
You can open a business account in the US even if you’re not a resident of the USA. The first step to opening a business bank account is to register your LLC in the USA.
This will make receiving payments from your US clients easier and more convenient.
Before opening a bank account for your LLC you need an EIN number. Read our guide to getting an EIN here.
Now that you have an EIN, here are the banks we recommend for you:
You can open a Mercury bank account without presenting yourself at a bank branch in the USA. This is especially useful for nomads and digital entrepreneurs. It will save you time and money. Most banks require that you open the bank account in person.
Mercury doesn’t charge for international wires or foreign transaction fees. It also doesn’t charge monthly fees. It’s a great option for business accounts.
Wise is another option if you don’t want to open a bank account in person. With Wise you can receive payments and easily transfer the money to different currency accounts. Wise is a multi currency account.
Wise fees are around 0.5% of the transaction + a small (approximately $0.4) fixed fee for transfers. This is a reasonable fee in comparison to normal bank fees.
Many banks offer accounts with low, or no transaction fees, on foreign and international transactions. Choosing the right bank can save you over $1000 each year.
Looking for a Way to Register an LLC in the USA?
Business Registration in the USA for Non-Resident Aliens
The easiest and most efficient way to register an LLC in the USA is through a business formation service. See more details here.