Hi everyone
I spoke to my bank which has branches in the States regarding opening a savings account in the States using my Aust credit record.
They want to charge $200 for the application.
For those who are already investing the States, how did you get started without any credit history in the states?
Did your bank want to charge some extravagant application fee for a saving account?
Thank you all in advance.
Pierre
If you're talking HSBC, they do charge a standard $200 for an application to their basic banking account. It's a pain, I agree.
Because we Aussies don't have credit history there, you could possibly do some of the following:
1) Get an updated credit history from Australia (for free) to show them. They may not take it seriously or may even disregard it altogether, but at least it will show them how you are rated.
2) If you're paying cash for your properties, I don't think you'll need credit history as you won't be borrowing anything.
3) Transfer a large lump sum to the US bank account to show that you have some liquidity. Tell them you are prepared to put down a large deposit (perhaps 20-30%) and see if they can finance the rest. Perhaps start off with properties under 60K, which will lessen the risk to you and the bank.Best thing to do is pay for an airfare and 10 days accommodation in whichever area you are interested in, then open a bank account for free while you are there. Just take some ID plus some utility bills. That way you'll get to open a bank accont plus get to look around while you're there. Kill two birds with one stone, so to speak
It is by far the best idea to go to the States to open an account. You can then open with a large reputable bank like Wells Fargo, Bank of America, Wachovia (part of Wells Fargo) These usually have smaller fees and more services. To start getting a credit rating I have deposited funds into a term deposit as security, borrowed a similar amount which is being paid off over six months. I have also obtained a credit card of sorts. It is a fairly new product and will also help with a credit score. My Bank Manager is sure that I'll qualify for a loan in six months. I also own outright four properties in Florida. Before opening a bank account, set up your LLC so the account is in the correct name. Don't even think about buying a property in your private name. You are investors who act professionally with all things in place. Right!!
Thank you Bevk! Thank you Judith!
So i guess you did open a bank account by travelling to States?
How long does it take to set up LLC and the bank account?
ActToday wrote:It is by far the best idea to go to the States to open an account. You can then open with a large reputable bank like Wells Fargo, Bank of America, Wachovia (part of Wells Fargo) These usually have smaller fees and more services. To start getting a credit rating I have deposited funds into a term deposit as security, borrowed a similar amount which is being paid off over six months. I have also obtained a credit card of sorts. It is a fairly new product and will also help with a credit score. My Bank Manager is sure that I'll qualify for a loan in six months. I also own outright four properties in Florida. Before opening a bank account, set up your LLC so the account is in the correct name. Don't even think about buying a property in your private name. You are investors who act professionally with all things in place. Right!!If you go to the United States it is easy to open an account. The reason you cannot do it remotely is due to the patriot act. The Us government are concerned about terrorist opening accounts groups. HSBC will do it because you can go into a local branch. I opened an Chase account on the ground in Texas without any set up cost. The only rule is you have under $1500 it costs $6 per month.
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It seems that the best way to set up an account in the US is to go over there and do it yourself. However one thing I am curious about, how easy is it to link it to an Australian bank account.
One of my main concerns with investing in the US is the fees with exchanging currencies, I am not concerned about the currency flucuations, but more concerned with fees associated with transferring between currencies. I talked to HSBC and even between two HSBC accounts, there was a fee of 20 AUD to deposit money into the US account, and a similar fee to deposit it into the Aus account (however there was no fee if you have a premier account, but you need to have 200,000 AUD in the account for this)
I asked similar questions to CitiBank and they seemed to have a fee free transaction between currencies so I will look into this a bit further, still need to set up the LLC though.
Another possibility to consider is Paypal.
Many people have a PP account which is linked to their Aus bank account.
Once you have a US bank account, set up another PP account linked to this and send money from one PP account to another.
Send it as Personal/Gift so there are no fees.
You then draw it down into your US bank account.You might have to check with them how much you can send without raising any red flags
I have some family members overseas who have PP accounts. If I want to send them money, I just send it through Paypal as a gift. They get a message telling them that there are funds available (it's instant) and then they draw the money down into their personal bank account. Just remember to look at the exchange rate offered by PP to see if it's competitive.
Be very careful of taxation obligations. You can get a Visa and make purchases in Australia direct from your US account using your Visa debit card but again make sure you look to your legal obligations. I can't stress enough that any investment where ever undertaken must have the proper structure and the cost of a visit to a good Accountant or Lawyer is money well spent.
You can also look into getting a USD account with Citi Bank in Australia. I really like using the fully automated Currency Online to convert money from AUD to USD or AUD to CAD.. since I'm Canadian I often move money to pay down mortgages in Canada.
http://www.currencyonline.com/ef/1324/default.aspx for those that are interested. Great program.. they have been around for a long time and more efficient than their live broker version HiFx.
Impressive exchange rate Globaltraveller. I know of a number who have tried to open accounts through Citibank and are finding a brick wall. If you have opened one recently, would you share which Branch you did it through?
Hi Judith,
I'm in Sydney. The one I would recommend is
Pitt Street
55-57 Pitt Street
Sydney NSW 2000
Tel: (02) 8225 3663Call them before you visit the branch to make sure you have everything they need to complete the application.
Yes, the rates at Currency Online: http://www.currencyonline.com/ef/1324/default.aspx have been better than all the major banks… and I can do it without leaving my home.. or waiting in line.. Having been raised in N. America I am use to online transactions and I like it alot…
Hi Globaltraveller,
I’m not sure if I’m missing the point or not ?? What’s the use of having a USD$ bank account with a bank in Australia ? I appreciate that your dealing in USD$ if your rent is coming in USD$ but the fact still is that the account is based in Australia…..regardless of being with a major bank like Citibank…..Most using this forum would be wanting a bank account for rental income to be deposited. If your property manager was depositing rental income from your US property….any deposit would still be classed as a international transfer and subject to additional fee’s as it has to come to Australia first to be able to be deposited.
Hi Speedy
Your response sounds a bit aggressive.. not sure if it is just online forum messages affecting the tone of messages. So, forgive me if I have misread your tone, but in my view it is a bit aggresive to accuse me of missing the point instead of requesting clarification on how it saves money.
Why would it be worthwhile to have a bank account in Australia in USD when the property is in the US.
Well, it is more cost effective to have a global bank account say with Citi since fees are waived up to 10,000 as quoted on their website:
"Citibank Global Transfers
Transfer money around the world in a blink of an eye with Citibank Global TransfersNow Citibank account holders can transfer money to another Citibank account at participating branches around the world.
- Citibank Global Transfers has no transfer fees
- Payee's (account being credited) account balances is updated almost immediately
- Receive funds from participating branches around the world
It is so easy to use. First, simply add your payee and then activate it. Then go to the Bill Payments and Transfers tab and follow these steps
- Select your destination/payee
- Select the account you wish to transfer from
- Enter the transaction details
- Review and then confirm the transaction
Citibank Global Transfers can be made to:
Bahrain
Belgium
Canada
China
Colombia
Egypt
Germany
GreeceGuam
India
Indonesia
Jersey
Mexico
Pakistan
PhillipinesPoland
Puerto Rico
Singapore
Spain
Turkey
United Arab Emirates
United Kingdom
United StatesHi Ray,
My apologies…..no aggression intended on my behalf…..I did question if it were ME missing the point…not yourself but again sorry if my tone came across wrong.
Do you mind if I again clarify…….if my property manager based in Houston Texas for example wanted to deposit rent into my account…..the Citibank option would only prove useful if the Property Manager and myself both banked with Citibank ??
globaltraveller wrote:Hi Speedy
Your response sounds a bit aggressive.. not sure if it is just online forum messages affecting the tone of messages. So, forgive me if I have misread your tone, but in my view it is a bit aggresive to accuse me of missing the point instead of requesting clarification on how it saves money.
Why would it be worthwhile to have a bank account in Australia in USD when the property is in the US.
Well, it is more cost effective to have a global bank account say with Citi since fees are waived up to 10,000 as quoted on their website:
"Citibank Global Transfers
Transfer money around the world in a blink of an eye with Citibank Global TransfersNow Citibank account holders can transfer money to another Citibank account at participating branches around the world.
- Citibank Global Transfers has no transfer fees
- Payee's (account being credited) account balances is updated almost immediately
- Receive funds from participating branches around the world
It is so easy to use. First, simply add your payee and then activate it. Then go to the Bill Payments and Transfers tab and follow these steps
- Select your destination/payee
- Select the account you wish to transfer from
- Enter the transaction details
- Review and then confirm the transaction
Citibank Global Transfers can be made to:
Bahrain
Belgium
Canada
China
Colombia
Egypt
Germany
GreeceGuam
India
Indonesia
Jersey
Mexico
Pakistan
PhillipinesPoland
Puerto Rico
Singapore
Spain
Turkey
United Arab Emirates
United Kingdom
United StatesGlobal Traveller,
I use a company in Sydney called Oz Forex, they transfer funds for about $15, over 10K nothing and the money is there in a flash.
You don’t need to open a bank account to deal with them, you need a bank account to be able to transfer the funds into there account.
You can also purchase a forward contract on the US dollar if one is going to purchase property in the US, you can lock in your dollar based on today’s rate, even if you will be purchasing in 6 months.
Does this help.
Jeff
Hi Jeff,
Yes, similar to Currency Online you can lock in forward rates. Same deal with trades over 10,000.. there are no fees. I like it because it is online and you can do spot trades at any time.
Speedy, in North America.. both Canada and US allows you to have others deposit money into your account as long as they know your account details. They will not be able to take out money, but provided you give them your check account number.. your property manager will be able to deposit rents for you into a Citi account without charge for you to instantly see it on your account. Your property manager does not even need to have a Citi account. I am guessing there is a citi bank near him. If not, he can post you the checks and you can deposit them yourself into your USD account.. For me, my property managers hold back rent if there are expenses so money only flows one way.. to me net expenses.
You can then use currency online which allows BSB transfers.. (FREE in OZ) to convert to AUD if you feel like it and deposit it back into your AUD account at a better exchange rate than the major banks.. since it is a low cost automated solution you get better rates than the Aussie banks..
hope that answers both questions..
It would appear that you still need an account here in the US for Property Managers to deposit funds as to deposit the funds directly to an AU account would incur fees.
Ray, I am currently in the US and have everything set up but thought the information of a Citibank option would be helpful to others.
Jeff, The rates for funds transfer through Ray's option would have given $274 odd dollars more on a $20,000 yesterday than OzForex, who I currently use.
Depositing money to a USD account for Citi requires fees? That could be because the USD account is still and Australia account. In that case Judith.. you are right the property manager would have to have an account or do what I did in the beginning of my investing career… get property managers to post checks and you can deposit them into the account when it gets to Australia.
Oh.. Yes.. $274 in my mind is still significant.. even after years of investing.. wasting money is still a bad idea especially when another option is available that takes the same amount of time..
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