「Bank of America」 You should pay attention to this detail when opening a bank account in the United States

Time: 2023-01-31 14:17

To conduct business activities in the United States, opening a bank account is an essential part.
There are many commercial banks in the United States, and there are many banks to choose from. As an overseas seller, how can you choose a bank to open?
What kind of bank should we choose to ensure our own capital security?

1、 Why open a US bank account?

When the United States account receives money from the United States or North America, it is almost received in real time, and there is basically no handling fee; And the funds are not controlled, so there is no need to worry about the funds being frozen or sealed up without any reason.
In addition, opening a Bank of America account and collecting money with a Bank of America account are more conducive to establishing a brand image in the United States and facilitating listing and financing.
For cross-border sellers who want to settle in Amazon, opening a US bank account is one of the necessary conditions to settle in Amazon.
Therefore, it is very important for overseas sellers to carefully select a bank with high safety factor and guaranteed capital.
There are many commercial banks in the United States, and some sellers will choose to open accounts in digital banks in order to save costs.
Although the threshold for opening an account of a digital bank is low, its safety factor needs to be considered. There is the risk of funds being moved and once the digital bank goes bankrupt, it cannot compensate customers for their funds in the bank without deposit insurance.
Therefore, for overseas sellers who carry out activities in the United States, Ivan suggests:
Select a bank with FDIC deposit insurance to open an account.

2、 What is FDIC insurance?

FDIC (Federal Deposit Insurance Corporation), a US government company, aims to provide deposit insurance for depositors of US commercial banks and savings banks.
The biggest advantage of FDIC is that if a bank participating in FDIC insurance fails or goes bankrupt, FDIC will take over all the assets of the bank and pay the insured part.
Another advantage of FDIC is that it has access threshold. Whether the bank can participate and how much the premium is decided by the FDIC. If there is a change in the distribution of insured bank assets, leading to an increase in the risk of bank bankruptcy, depositors can also receive a warning from the FDIC.
However, FDIC does not guarantee all products of banks.
Generally speaking, FDIC will insure savings accounts:
checking account
savings account
Bank transferable withdrawal order (NOW) account
Money Market Deposit Account (MMDA)
Time deposit
Bank promissory notes, bills of exchange and other official vouchers issued by banks
Individual retirement account (IRA)
Some investment accounts are not protected by FDIC:
stock investment
Bond investment
mutual funds
Life insurance policy
Municipal bond
Safe or its contents
US Treasury bills, bonds or notes
Although there are restrictions on the items protected by FDIC, even if you are not a US citizen, as long as your account meets the FDIC insurance conditions, you can be protected in the event of bank bankruptcy.

3、 How to calculate the compensation amount of FDIC?

FDIC has an upper limit on the amount of compensation.
At the time of compensation, the part less than 250000 US dollars will be compensated 1:1, that is, the FDIC will compensate you as much as you lose.
The upper limit of compensation for the following six accounts is US $250000:
Independent account (including Checking&Saving)
Retirement account (i.e. IRA)
Joint accounts with the same rights
Revocable&Irrevocable trust accounts
Employee benefit account
Business accounts (including C-corporation, LLC, etc.)
Government accounts
It should be noted that the checking and saving accounts in the same bank are the same type of accounts, sharing the compensation limit of 250000 dollars; The IRA is another type of account, and the compensation of US $250000 is calculated separately.
That is to say, you have opened one checking account and one saving account in the same bank, but because they all belong to the same type of account, once the bank fails, you can only get 250000 dollars in compensation. The part exceeding US $250000 is not within the scope of claim settlement.
If you open a checking account in Bank A and a saving account in Bank B, the amount of compensation will be calculated separately.
In addition, for commercial accounts, FDIC will require companies that want to obtain insurance eligibility to have actual operations, rather than simply increase deposit insurance.
It should be noted that the situation of LLC will be special.
The deposit fund of LLC will be added to its personal account in the same bank, and the total amount of the insured will remain at US $250000.
When your situation is complex, you can directly use the insurance calculator provided by FDIC to calculate the amount of compensation you can get. 

How do we confirm whether our target bank is an FDIC insured bank before opening an account?
The most direct way is to enter the FDIC official website for query;
If you are overseas in the United States, you can also entrust a consulting agency to open the account of the insured bank.
As one of the top 25 FDIC insured banks listed in the United States, East West Bank has maintained a good cooperative relationship with Ivan Consulting.
So far, by virtue of the advantages of cross-regional offices between China and the United States, Ivan Consulting has helped dozens of cross-border e-commerce and brand overseas sellers to successfully open accounts with Huamei Bank, so as to save customers from unnecessary hardships.

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