Maintaining US account as EU citizen abroad

Question

I'm an EU citizen. I've had a US bank account for the time I did my PhD, but after the program I've moved back to Europe. I have the option of keeping the account open, by keeping $2000 in the account to avoid fees. Is there any advantage or disadvantage of maintaining a US account, or should I close it?

I've seen this question answered online, but mostly for US citizens living abroad, so those answers don't necessarily apply.

Answer 1

Disadvantages:

• You have money sitting idle, earning little to no interest
• Account management might be an issue if you are not in the US and need to fix a problem or address a request
• Changes to minimum balances or fees may get missed

Advantages:

• If you receive payments in the US, you may avoid international transfer fees and hassles
• If you make payments in the US, you can just use a transfer or write a check.
• Avoid currency exchange fees if you deal in USD

Examples:

• Failed transfer of EUR to GBP and back to SEK - A failed international transfer induced TWO hits on currency exchange fees. If the money were held in the "local" currency this might have been avoided

Answer 2

I'm also in Europe and decided to have/keep a US bank account. It is not the general-purpose bank account I had when I was working in Canada, though.

Advantages

• I'm in North America (US + Canada) every so often and do think that this will also be the case in the foreseeable future. I'm self-employed scientist (German: Freiberufler) and occasionally am paid in US$, and/or via cheque. Cheques are basically unknown nowadays in Germany, and banks may charge insane fees, particularly if the cheque is not in €.
  As Freiberufler, I can legally use any of my personal banking accounts to receive money and thus avoid conversion fees and cheque processing fees (I've had a cheque for 100 US$ - German fees would have been roughly between 15 and 50 € depending on the bank/account type).

• Not only freelancers get cheques in North America: I've also gotten reimbursement via cheque from a conference in Canada. This happens to non-freelancing scientists as well. I've also gotten tax reimbursements which were sent by cheque.

• In terms of moving again to the US/Canada: Remembering the hassle to open a Canadian bank account when I was working there, I think it may be a good idea to keep one account in North America. And Canadian banks are far more used to handling US$ than the other way round...
  The account I have is not really suitable for every-day banking. But it would serve just fine for a research stay of a month or two or until a new "normal" account is in working order.

Disadvantages

• The hassle of having to look after another bank account.
• Taxation burocracy. I have to fill in US taxation related documents every so often (saying that I'm not US resident, and am subject to a double taxation treaty), and for my German income tax declaration I have to add another sheet dealing with relations to foreign banks and do a number of calculations myself that for German accounts the bank would do automatically.
• Not sure, but having a foreign bank account may trigger the duty to hand in income tax declaration (in Germany, if you are purely an employee you don't have to hand in a tax declaration).
  Doesn't matter for me: being freelancer I anyways have to do this. The additional amount of burocracy is not zero, but far from being the worst part of my tax declaration in terms of burocratic hassle.

Other Lessons Learned

• If you decide to keep an account, make doubly sure how to access it from Europe. Ask in detail how you can get money there and from there to your European account - and what the fees are. The US account I have now is managed by the "international" branch of that bank (as opposed to a local branch). It has "access points" to get money there and back in many countries, and the international branch people know how to get things done from overseas.
  The "normal" account I had when working in Canada failed on this although the Canadian bank officially cooperates with a number of foreign banks: when the ATM card expired they would not send a new card to an overseas address. And for some things they wanted me to show up in person at the local branch where my account was kept. They are also present in some European countries - but my suggestion to show up at one of the European offices didn't help, neither. Fortunately I was at least able to close that account from a branch in another Canadian city when I happened to be there.

• BTW, I went for an account that is connected with an online brokerage account, so the money is not just sitting idle and producing fees while waiting until some time a US account comes in handy.