Why are banks closing US expats' brokerage accounts? (2024)

FAQs

Why are banks closing US expats' brokerage accounts? ›

Why Are Expat Brokerage Accounts Being Closed? The global financial regulatory landscape is changing dramatically. FATCA imposes significant new compliance burdens on non-U.S. financial institutions with U.S. clients. As a result, many non-U.S. financial institutions now simply refuse to service U.S. persons.

In principle once again, U.S. expatriates may keep their US brokerage accounts and related investment accounts, such as 401k's, Individual Retirement accounts and so on. In fact, we recommend that US citizens living abroad should keep their liquid investments in the United States.

Just because you live overseas does not automatically mean that your account will be closed. Usually it comes down to the country you reside. The majority of US-domiciled brokers have a list of countries in which they will allow a US Expat to open an account or maintain an existing account.

The decision to freeze an expat account is an internal financial institution policy. Rather than complying with new international regulations, many U.S.-based brokers (such as UBS, Wells Fargo, Merrill Lynch and Morgan Stanley) decide it is easier to close or freeze American expat brokerage accounts.

Global bank Barclays are set to close bank accounts belonging to expats in certain countries if they don't deposit £100,000 into their account. The news came to light as the bank has sent letters to a number of British expat most at risk from the account closures in certain countries.

Best Brokers for Expats

Due to the complicated rules that can surround cross-border trading, many brokers simply stay away from working with customers who have foreign addresses. However, Charles Schwab and Interactive Brokers are two companies that have strongly positioned themselves as expat-friendly.

Support for expatriates

That's why we aim to make your financial transition as smooth as possible. We can help you invest in U.S. markets while living abroad, access U.S. dollar–based accounts, and provide reporting for U.S. tax filing.

U.S. expat brokerage account restrictions vary between brokerage firms. Some firms let clients keep their existing brokerage account once they have moved overseas but will not permit clients to open a new brokerage account due to residency in a foreign country.

No. Unfortunately, we do not open accounts for any new customers residing outside the United States. Q.

Some brokerages will work with expats, but with some limitations. For example, according to Fidelity's website, you cannot purchase new mutual funds while living abroad, and if you don't have an existing brokerage account before you move abroad, you cannot open a new one.

Which banks are closing expat accounts? ›

This means the IRS may possibly reach the overseas bank account. Even without a branch in the US, the foreign bank account is not immune from seizure by the US government.

There are many reasons why a bank may close your account, including fraud, inactivity or too many overdrafts. When a bank closes an account, it sends a notice in the mail detailing the reason for closure and what actions you must take to have the account reopened.

Benefits of Keeping Your Bank Account When Moving Abroad:

Enables you to manage any financial obligations in your home country. Reduces the difficulty of re-opening an account if you're to return from abroad. Makes it easier to send money to family in your home country. Keeps your credit history active.

Tell us about your new address so you can continue to bank with Nationwide and manage your money overseas. You can update your address in the Internet Bank and Banking app or by visiting us in branch.

If your address is outside the UK, we'll be in touch to let you know that we're closing your current or savings account. This will only affect your current or savings accounts listed in the letter we've sent you – any account, product or service provided by another part of the Barclays Group will stay open.

There is no citizenship requirement for owning stocks of American companies. While U.S. investment securities are regulated by U.S. law, there are no specific provisions that forbid individuals who are not citizens of the U.S. from participating in the U.S. stock market.

A. Regardless of where you move, the following applies: Fidelity does not provide discretionary asset management services to customers who reside outside the United States. The services provided by our representatives are limited to those that are ministerial or administrative in nature.

Unfortunately, we do not open accounts for any new customers residing outside the United States.