How To Open an International Bank Account

How To Open an International Bank Account (Even Online For Free)

Are you looking to open a foreign bank account online? Fortunately for you, the process has become increasingly accessible in recent years. These days, you'll be able to open a digital bank account from many countries worldwide to take advantage of low fees, flexible banking, and attractive exchange rates.

First, what we mean by "international" and "foreign" bank accounts in this article is quite specific. We're referring to accounts from banks (or similar financial services) that offer everyday banking services (i.e. checking and savings) in countries and currencies different from your own and cross-border payment services such as currency exchange, online payments abroad, and international bank cards.

This means that we'll not be exploring the related (but very different) subject of offshore investment banking and wealth management for the purposes of this guide.

When it comes to opening a foreign bank account online, you'll have two primary options, broadly speaking:

• Opening an account with an international digital bank;
• Opening an account with a high-street bank in another country.

Generally speaking, opening a bank account with a traditional high-street bank in another country will require you to be present in that country (for work or residency purposes, for example) and will usually also need you to present a fair amount of documentation, including passports, visas, and (sometimes) proof of residency.

On the other hand, opening an account with a digital-only bank is generally the more flexible option and one which won't require you to be present in a foreign country. However, it still comes with many of the perks and services offered by traditional banks, making it an attractive alternative for many people.

This article will explore both options and weigh their pros and cons to determine which might make sense for you.

Opening a Foreign Bank Account With a Digital Bank

There's no escaping the fact that digital-only banks are fast on the rise. In the EU and the UK, for example, a host of digital-only banks (also known as "challenger banks" or "neobanks") have been disrupting the financial services industry in recent years by offering lower fees, broader appeal, and more convenient online access than most high-street banks.

In Europe, these banks include N26, Revolut Bank (which is only a bank in certain EU countries, not in the UK), Monzo, bunq, Starling Bank, and many other smaller names.

Across the Atlantic, digital banking is also on the rise in the US and Canada, however, as of 2023, there isn't as much consumer choice in the North American market as in the European one. And while the story is similar in Asia and Australasia — where neobanks are also on the uptrend — and in the rest of the world, the trend has yet to get going fully.

Opening an online bank account with a challenger bank offers the following key advantages to you as a customer:

✔️ Cheaper: A lower cost structure than high-street banks means that users benefit from lower fees all-round;

✔️ Accessible: There's often less emphasis on being a resident of a particular country, and cross-border accounts are very common;

✔️ Savvy: Services are conveniently online, with online and mobile banking generally being well-designed and easy to navigate;

✔️ Transparent: Communication and consumer-facing language tends to be more simple, conversational, and clear;

✔️ Global: Many (although not all) digital banks tend to emphasise cross-border payments, international money transfers, and favourable exchange rates as part of their service package.

On the other hand, the following drawbacks mean that digital-only banks may not be cut out for everybody:

❌ Branchless: Digital banks rarely, if ever, have any physical branches of their own, meaning that face-to-face consultation isn't an option for those customers who value it;

❌ Limited: High-street banks tend to offer a wide range of financial services, while digital banks tend to be considerably more restricted in terms of their scope of service;

❌ Non-banks: Some (although not all) digital banks aren't, in fact, banks at all in the strict sense because they're organised as different legal entities entirely.

Opening a Foreign Bank Account With a High-Street Bank

The default option for most people when moving to a new country or searching for a foreign bank to open an account, opening a bank account with a traditional bank offers several key advantages.

While many high-street banks worldwide accept account applications from non-residents to their country, most will not. Even among those that will, you'll probably need to prove your eligibility to live and work in the country and sometimes even prove your residence there. (A notable exception is the EU, where EU bank accounts are eligible across the 27-member bloc and discrimination on this basis is illegal.)

As a result, this makes traditional banks considerably more restrictive than digital banks, complicated further by the fact that rules around application change considerably from country to country.

On the other hand, traditional banks carry a strong perception of stability and security. The fact that they have physical branches can be a significant advantage for many people.

What's Needed To Open A Foreign Bank Account Online?

The documents you'll need, and the steps you'll need to follow to open a bank account online can vary significantly depending on many factors. These include your country of origin, your bank of choice, your intended use of the account, and other factors.

In general, however, you can expect to present the following documents when opening a bank account online:

• Your passport or valid government-issued ID;
• Proof of address in your home country.

If you're looking to open a bank account at a traditional bank in a foreign country, the following documents will very often also be required:

• A visa for the country in question;
• Proof of address in the local country.

Types of Foreign Bank Accounts To Open Online

While names of accounts and broader account types may differ considerably from bank to bank, in general, you'll find the following three types of bank accounts available to you when banking at a foreign bank:

• Checking accounts: These accounts tend to be transactional and geared toward everyday use. They're sometimes known as "transactional accounts," "current accounts," or "chequing accounts," depending on the country.
• Savings accounts: These accounts accrue interest and tend to restrict withdrawals. They're geared toward safely storing away money that doesn't need to be used soon.
• Multi-currency/Foreign currency accounts: These accounts are denominated in any currency other than your home currency and are used for various purposes, including cross-border transacting, saving, and investing.

Online banks will likely offer you either multi-currency account options or checking account options with some cross-border functionality. Traditional banks, on the other hand, will likely offer you all three.

As we saw earlier, this is because the average traditional bank is more likely to offer a greater scope of service than the average online bank.

How To Open A Bank Account Online Without A Residence Permit

The nuts and bolts of opening a foreign bank account online can differ tremendously depending on where you're aiming to open an account. If you're using a digital bank, for example, chances are you won't face many restrictions in the way of needing to submit a residence permit beyond your home country. However, if you'd like to use a traditional bank, you usually (although not always) will have to show proof of residence.

As such, if you have a specific country in mind — whether you're moving there for work or whether you wish to own a bank account in that country's jurisdiction and currency — then we recommend you take a look at our in-depth guides for opening a bank account in the major countries below:

Digital or Traditional Banks: Which Is Best To Open a Foreign Bank Account Online?

While there's no hard and fast answer to whether you should choose a traditional or a digital bank account when opening an account abroad, there are most certainly situations in which one will make sense over the other.

For example, if you happen to have no option or desire to become a resident of a country in which you'd like to open an account, then a global digital account such as Wise or Revolut will suit your needs best, depending on their availability in your country. Similarly, if you're a newcomer to a foreign country, then we highly recommend you explore these options too, as they'll allow you to send and receive money in the local currency before you go through the process of opening a bank account.

Digital bank accounts also provide a convenient second bank account and can augment a traditional bank account very well. For example, one could use a conventional bank account for everyday use and then a digital account while travelling abroad. These services offer much more favourable exchange rates and cross-border fees than high-street banks.