This Closes 90% of Non-Resident's U.S. Bank Accounts

Summary

In this video, the speaker discusses the challenges of maintaining bank accounts in the U.S., where banks can close accounts without explanation. They outline different types of banks—traditional, online, and fintech—while emphasizing that banks scrutinize outgoing transfers more than incoming ones. To avoid account closures, the speaker recommends using intermediaries for international transfers, maintaining multiple accounts, and gradually increasing transaction amounts to build a trustworthy banking history. The video concludes with practical strategies for business owners to navigate their banking relationships effectively.

Takeaways

• 😀 Banks in the US can close accounts without explanation, which can be frustrating for customers.
• 😀 There are different types of banks, including traditional banks, online banks, and fintech companies, each with unique features.
• 😀 Incoming funds are generally welcomed by banks, while outgoing transfers, especially large ones, can trigger scrutiny.
• 😀 Using intermediary services like Wise or Airwallex for international transfers can help avoid account closure risks.
• 😀 It’s advisable to maintain multiple bank accounts to minimize the impact of any single account being closed.
• 😀 Regularly transferring large sums out of an account without maintaining a balance can raise red flags with banks.
• 😀 Start with smaller transactions to build a relationship with new accounts, which helps in maintaining account longevity.
• 😀 Utilizing online accounts provides greater flexibility and can sometimes offer better services than traditional banks.
• 😀 Credit unions may offer better personalized service, making them a good option for those in the US.
• 😀 Consistent, moderate transaction levels and adherence to banking rules are crucial for keeping accounts open.

Q & A

Why can banks close accounts without providing a reason?

In the US, banks have the discretion to close accounts without disclosing the reasons. They simply notify the account holder through a letter.

What types of banks are mentioned in the video?

The video mentions three types of banks: traditional physical banks (like Chase, Bank of America, Wells Fargo), online banks (like Mercury and Relay), and fintech companies (like Wise and Airwallex) that serve as money transfer intermediaries.

What is the primary concern for banks regarding money transfers?

Banks generally have fewer concerns about money coming into accounts but scrutinize money going out. They assess the legitimacy and risk associated with outgoing transfers.

What workaround is suggested for international transfers?

Using intermediaries like Wise or Airwallex is recommended for international transfers instead of direct bank-to-bank wires, as it reduces the risk of account closure.

What is a common reason for account closures mentioned in the video?

One common reason for account closures is the pattern of large, rapid transfers or wires, especially to high-risk locations, which can elevate the account's risk profile.

How can account holders manage multiple bank accounts effectively?

Account holders are advised to have multiple accounts to mitigate risk. It’s recommended to use one account for sending wires to avoid drawing attention from the bank.

What is the importance of maintaining a balance in a bank account?

Banks prefer to see account holders maintain a balance rather than conducting a high volume of transactions with no retained funds, as it suggests stability and regular business activity.

What steps should be taken when warming up a new account?

New accounts should be warmed up by starting with smaller transactions and gradually increasing the volume to build a history with the bank and avoid triggering account closures.

What types of transactions are considered lower risk by banks?

Regular business transactions, such as ACH deposits and settlements from credit card processing, are typically seen as lower risk compared to large cash withdrawals or international wires.

What additional services do credit unions offer compared to traditional banks?

Credit unions often provide more personalized service and may have a better relationship with customers, which can be beneficial for account holders looking for support.