Banking in the USA

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The Resource Center content, including all videos and other media, is for informational purposes only. You should not construe any such information or other material as legal, tax, investment, financial or other advice. The advice and information contained in the Resource Center is not a substitute for financial advice from a professional who is aware of the facts and circumstances of your individual situation


In this video, Advancial Credit Union provides fundamental knowledge and tips for those who have newly arrived to the US as foreign nationals, expatriates, or non residents. This presentation covers some very basic information about the US banking system, some useful money management tips and strategies, and best practices for making sound financial decisions.


Welcome everyone. We're happy you have tuned in today to learn more about banking in the US. This presentation is designed to provide fundamental knowledge and tips for those who have newly arrived to the US as foreign nationals, expatriates, or non residents. Even if you are already settled in, we do hope to provide you with some valuable information that will help you today and throughout the life cycle of your financial journey.

Today's video is for informational purposes only. If you have specific questions about your personal financial situation, we will be sharing contact information at the end of this presentation.

Our learning objectives for today include some very basic information about the US banking system, some useful money management tips and strategies, and best practices for making sound financial decisions.

There are many different types of financial institutions that exist in the US. Although other countries may have the same types of financial institutions, you may find differences based on availability, regulatory controls, and tax treatment with respect to how these financial institutions operate in each country. Let's discuss what each of these financial institutions do and the basic fundamental similarities and differences.

Starting with retail banks, they are probably the banks that you're most familiar with. Your checking and savings accounts are often kept with a retail bank with focuses on consumers or the general public as customers. These banks offer loans and may provide credit cards and offer numerous branch locations in populated areas.

There's commercial banks which focus on business customers.

Businesses need checking accounts just like individuals do, but they also need complex services and the dollar amounts and the number of transactions can be substantial.

Commercial banks, which are also called business banks or corporate banks, manage payments for customers. They provide lines of credit to manage cash flow, and they offer foreign exchange services for companies that do business overseas.

Credit unions are similar to banks. They offer products and services more or less identical to retail banks. The main difference is that credit union members share some characteristics in common where they live, their occupation, or an organization they may belong to, for example.

Online banks operate entirely online. There are no physical branch locations available to visit with a teller or a personal banker. Many brick and mortar banks also offer online services such as the ability to view accounts and pay bills online, but internet only banks are different.

Banks play a vital role in the US economy. Without these needed financial services, Americans would sometimes lack the ability to wisely and effectively spend, borrow, save, and protect, which are the cornerstones of financial help.

The most common two US banking institutions are banks and credit unions. You'll find US banks and credit unions both accept deposits, offer loans, and provide a wide array of other financial services.

However, there are fundamental differences you should know about.

Starting with profit structure.

Banks are for profit institutions.

Credit unions operate as a not for profit institution.

Banks use surplus earnings to provide substantial financial returns to their investors, the shareholders.

Credit unions, on the other hand, use surplus earnings to increase service offerings and returns while decreasing interest rates and fees. Profits made by credit unions are returned back to the members in the form of reduced fees, higher savings rates, and lower loan rates.

Customer versus member. At a bank, you are a customer. At a credit union, you are regarded as a member with a financial stake in the institution.

Every credit union requires a new member to deposit a small minimum amount into their savings account, also known as a share account.

The account is called a share account because it represents your financial stake in the credit union. You are a member as well as a shareholder.

Banks also have shareholders, but they are not required to be customers of the bank.

Guiding leadership.

Banks have a paid board of directors and are controlled by their public or private shareholders, who also own stock in the business.

Credit unions are governed by a board made up of current members who volunteer their time.

There's also eligibility requirements.

Anyone can open an account at a bank. But credit unions serve a specific population and have requirements for prospective members to join. For example, one may be able to join a credit union based on an employer sponsorship, a family member's affiliation, a geographic area that you may live work or worship in, or membership in a group, like a chamber of commerce, a homeowners association or maybe a labor union.

There's also service area. Banks range from smaller community banks to large global corporations.

Credit unions were mostly based in local and or regional areas. This means that credit unions have a stake in the community that they're located in. This is why credit unions often offer more community based services.

Which institution you choose is up to you, and it may depend on the type of product you need or how easy it is to work with the company. At a minimum, look for a safe place to save and borrow at reasonable rates and understand that while both are financial institutions, the way they operate and treat their customers are vastly different.

Think of a bank or credit union as a means to help you spend, save, borrow, and plan more efficiently and more affordably.

These four activities done well are basic indicators of our financial health. These are the most common products that you'll see offered at a bank or a credit union.

A checking account in the US is primarily used for daily purposes and is not meant for long term savings. It's very common to receive a debit card with your checking account. This debit card has multiple uses and is directly attached to your funds in your checking account.

Using your debit card, you may access your funds at ATM machines.

May be through point of sale purchases at most retail locations like the grocery store or department stores. You may also use your debit card for online purchases.

A credit card in the US is a distinctly separate product than a debit card. You may have to apply for a credit card because it is a loan called a line of credit. Your access to this line of credit is the same way that you use your debit card. You make purchases or payments anywhere the card is accepted.

Savings accounts are used for accumulating money for longer term goals. Also, the money in these accounts can be used in the event of an emergency, or to supply you with enough liquid cash to access in a pinch.

There are other savings tools designed to help you save even longer, like CDs.

A CD is a certificate of deposit. It's a fixed amount of money for a fixed amount of time, such as six months, a year or five years. In exchange, the issuing bank, pays interest. You may have a penalty for withdrawing your CD earlier.

Auto loans and home loans are also popular financing options since these tend to be the most expensive purchases in our lives. Loans have flexible financing terms and different rates as well as possible fees.

Banks and credit unions also provide planning resources, including retirement planning, and investment services.

Your funds in the US are safe and secure no matter which institution you bank with. A bank is insured by the FDIC where a credit union is insured by the NCUA.

The Federal Depository Insurance Corporation, or FDIC, is an independent agency of the US government.

The FDIC protects you against the loss of your deposits if an insured bank fails. Any person or entity can have FDIC coverage at an insured bank. A person does not have to be a US citizen or resident to have his or her deposits insured by the FDIC.

On the other hand, the National Credit Union Administration, or the NCUA, is the independent agency that administers the National Credit Union Share Insurance fund, or NCUSIF.

The NCUSIF ensures member savings and federally insured credit unions, which accounts for about 98% of all credit unions in the United States. Deposits at all federal credit unions and the vast majority of the state chartered credit unions are covered by NCUSIF protection.

Both the FDIC and the NCUSIF are backed by the full faith and credit of the United States government. No depositor has ever lost a penny of FDIC or NCUSIF cover deposits.

It may seem a little daunting, but there are options in the US to safely and secure your funds at a bank or a credit union. Let's review how to establish a banking relationship.

The US Patriot Act requires us to verify identification information in an effort to curb criminal activity.

Generally, to open a savings, checking account, or a loan, banks and credit unions need to be able to verify your name, your date of birth, and your address.

A financial institution may ask you to provide one or more of the following to verify your identity.

Some type of government issued identification.

For US citizens, this would be a state issued driver's license or identification card. For non US citizens, this could be a passport or a visa.

They may also ask for some type of government issued identification number.

For US citizens, this would be a Social Security number or an individual taxpayer identification number.

For non US citizens, this might be your passport or visa number.

The key is to find a bank or a credit union that streamlines these additional requirements and provides a specialized program that may offer a deposit account or a loan without requiring US credit or a Social Security number.

After gathering the necessary and required identification documents, you'll complete a few more steps before opening a savings or a checking account.

A short application can be completed in person, over the phone, or via email. Most US banks and credit unions will not offer a fully integrated online opening platform due to the challenges of verifying identity in that space.

You'll fund your savings or your checking account next. This is called an initial deposit requirement.

The amounts may range from 0 to 10,000 depending on the type of account you might be opening. You may fund your account several ways, a debit card, or cash if you're in person, a check from another US bank, an electronic transfer, a money order, or a cashier's check. It's recommended that you fund your account using a debit card to avoid any holds or freezes that temporarily restrict your access to a certain amount of your funds.

Additional forms of non traditional identification that might be required could be a birth certificate, a consular ID, a utility bill, or a lease agreement showing US current address, credit report, history, or credit score.

The overall US credit concept is discussed in detail during our understanding credit presentation.

But for now, just know that your credit history can be an integral part in applying for a loan. And because most expatriates coming into the US don't have credit established here yet, Advancial can help accommodate this to help allow for certain loan products. Let's overview the loan process involved when working with Advancial.

Number one, applying for a loan. This is the most time consuming part of the process, which includes gathering documentation, and investing time in completing the application, either online or in print. The loan could be for a credit card, a new or used auto, a home loan, or even a personal loan.

Applications submitted to Advancial is number two. And once that application is submitted to Advancial, it's gonna be thoroughly reviewed.

Step number three, the credit union will review the application.

If it's an applicant with a credit score, then the applicant will fall under traditional banking lending guidelines.

If it's an applicant with no credit score, that applicant will fall under our special inbound USA banking program.

Step number four, approval or denial of credit. So if approved, Advancial notifies the applicant and finalizes the loan. If denied, Advancial notifies the applicant and concludes the process.

Each applicant with or without a credit score is reviewed on an individual basis.

Now that we've touched on how Advancial can help you during the loan process, let's dig a little deeper on how our inbound USA program can help you with all of your banking needs.

Advancial is headquartered in Dallas, Texas with physical locations following that gas pipeline throughout Texas, Oklahoma, Louisiana, and Alaska. But if you happen to be outside of those areas, Advancial makes it super easy for you to access your accounts, no matter where you live, work, or travel with our shared branching network.

This shared branching network is just another way to give you access to your Advancial account pretty much wherever you go.

Think about it. When you bank with a traditional bank, you have to bank with just them. Whereas with us, You can visit one of our Advancial branches, or if one of those are not close by you can also access your accounts through other credit unions with our shared branching network. That co op gives you access to just over 5600 locations from coast to coast. You can find a branch near you by visiting co-opcreditunion.org, or your company's landing page, which will be shared at the end of the presentation.

Advancial specializes in helping inbound international assignees establish a banking relationship in the US, and secure financing prior to receiving your Social Security number or your individual taxpayer ID number. Key benefits of our special inbound USA checking account includes no monthly service fees, unlimited free ATMs, rebates on other banks ATM fees, debit card rewards, free online banking, and deposit, and much more.

We also offer a fantastic credit card loan product.

Our Visa rewards plus credit card has no annual fee, no foreign transaction fee, no cash advance fee, and no balance transfer fee. In addition to these benefits, for the first twelve months, there is a 0% intro APR on all purchases.

If you would like to learn more about specific products and services mentioned today, please visit advancial.org/passportusa or you can scan the QR code with your mobile device and click on request information.

Once you click that request information button, you will be directed to an information card. That information card should look like this one. Please fill out the information on this card and a member representative will be in contact with you shortly.

Thank you so much for tuning in today. We'd love for you to connect with us. If you have any questions please reach out via the information on your screen.

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The Resource Center content, including all videos and other media, is for informational purposes only. You should not construe any such information or other material as legal, tax, investment, financial or other advice. The advice and information contained in the Resource Center is not a substitute for financial advice from a professional who is aware of the facts and circumstances of your individual situation