Bank accounts for Americans living abroad?

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Dear Dr. Don,
I just read your advice about how to open a euro-denominated account in the United States. My question is similar but I would like more clarification as well as your advice on the best path forward

I will likely be stationed in Paris for the next three years and will need a euro-denominated account to pay local bills and other expenses. I will also be paid in euros. Given the complexity of the new laws about declaring foreign bank accounts, I’m wondering if it is possible to simply open a euro-denominated account in the U.S. that I could use as a normal checking or ATM account when I am living in France. Is that a good approach? Or, would it be better to file all of the required documents and open a foreign account?

— Ken Compte

Dear Ken,
Three years in the City of Light sounds like fun, along with your work. How’s your French?

I don’t believe the new laws concerning foreign bank accounts are onerous. A U.S. citizen with a financial interest in or signature authority over foreign financial accounts must file a Report of Foreign Bank and Financial Accounts. This is also known as Internal Revenue Service Form TD F 90-22.1. You need that if the aggregate value of the foreign financial accounts exceeds $10,000 at any time during the calendar year. The form can be filed electronically but must be filed by June 30 of the following year after the account holder meets the $10,000 threshold. There are exceptions and exclusions to this reporting requirement.

To help answer your question, I got in touch with a representative at EverBank. He explained that EverBank does not offer euro-denominated checking accounts. It does, however, offer what they call an open-access money market account for euro depositors.

His suggestion is since you will be in Paris for three years, you will need an easy-to-use banking account denominated in euros. You should open a local bank account that will enable you to do all of your personal business abroad in euros.

What if you amass assets in euros while in Paris and want a savings vehicle that offers ease of use and low execution fees? That’s when the bank recommends a euro-denominated money market account. Then, after you return home to the U.S., you can chose to maintain the account in euros. The funds could be exchanged at any time, of course, into U.S. dollars. Exchange fees would apply.

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