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https://www.americansabroad.org/aca/sdfcuaccounts-description-and-faqs/

ACA-Members/SDFCU Accounts: Description and FAQs

American Citizens Abroad  (ACA) has formed a partnership with State Department Federal Credit Union (SDFCU) in order to provide its members with a US Banking solution.  This partnership was in response to problems that many overseas Americans have experienced with their US-based banking relationships. 

In the wake of changes in US and foreign securities laws and regulations, including the Foreign Account Tax Compliance Act (FATCA) rules, many US banks are pushing away Americans who reside abroad. US and foreign securities and other regulatory rules make it very difficult for banks to service this market and, frankly, many US banks are not intimately familiar with this type of customer.

ACA teamed up with the State Department Federal Credit Union (SDFCU) to provide accounts for Americans residing abroad. This is the same account used by Americans working at US embassies as well as many other people living around the world. You can reside full-time or part-time abroad and still qualify. You don’t have to have an address in the US. You certainly don’t have to go to the trouble of creating a US Limited Liability Corporation.

 

ACA-MEMBERS/SDFCU ACCOUNTS / FREQUENTLY ASKED QUESTIONS

 

GETTING STARTED

 

HOW TO OPEN AN ACA-MEMBERS/SDFCU ACCOUNT?

To open an ACA-Members/SDFCU Account, you will need to provide the usual due diligence information that you would need to open a bank account anywhere. If you reside overseas, provide your unexpired US passport. Also provide proof of address such as your lease agreement, or a utility bill in your name.  We recommend you also provide a copy of your Social Security Card if available. You may be asked to give a signed Form W-9 showing that you are a US taxpayer. You must be a member of ACA, which costs only $70 per year – $55 per year if you’re over 65.

You do not have to live in a foreign country to join, you just need to be a member of ACA. ACA has many members who reside in the US. 

 

IF YOU ARE ALREADY A MEMBER OF ACA, GREAT!

To open your ACA-Members/SDFCU account, go directly to the SDFCU website here to join and select the green "Join" button.  Proceed to join by choosing American Citizens Abroad (ACA) under the eligibility "I qualify through my relationship with one of your organizational affiliates".

 

IF YOU'RE NOT ALREADY A MEMBER OF ACA, JOIN NOW

To join ACA, go to "Join Now" on the ACA website and Membership Levels and Benefits are explained there. You will receive a confirmation email upon completion of your ACA membership. Then, to open your ACA-Members/SDFCU account, go directly to the SDFCU website here to join and select the green "Join" button.  Proceed to join by choosing American Citizens Abroad (ACA) under the eligibility "I qualify through my relationship with one of your organizational affiliates

 

WHAT INFORMATION DO I NEED TO PROVIDE TO OPEN AN ACCOUNT WITH THE SDFCU?

If you reside overseas, the information that will be required includes:

  • a copy of the individual’s unexpired US passport
  • a copy of a document which provides proof of residence, such as a lease agreement or utility bill in the individuals name
  • a copy of the individual’s Social Security Card (if available)

Other information might be requested by SDFCU depending upon the individual situation of the person, or the place of residence overseas. Please, also make sure you have joined ACA prior to opening your SDFCU account. 

 

IS MY PERSONAL FINANCIAL INFORMATION DISCLOSED TO ACA?

No. As an account holder, your details and your financial information are not disclosed to ACA. ACA is introducing you; you alone, without any further involvement by ACA, deal with the details of opening and maintaining your account. The only information that ACA transmits to SDFCU is a confirmation of your status as an ACA member. SDFCU does not transmit information about an SDFCU member/account holder to any unaffiliated third party.  Detailed information about privacy can be found on the SDFCU website. 

 

CAN I OPEN AN ACCOUNT AT SDFCU EVEN IF I LIVE ABROAD?

Yes, this is one of the greatest advantages of ACA working with SDFCU. SDFCU is one of the few credit unions in the United States which accepts members who live outside the country. Dues-paying members of American Citizens Abroad, Inc. are able to take advantage of this because ACA has been approved as an associated group by SDFCU and by the relevant supervisory body, the National Credit Union Administration. 

 

CAN MY NON-US SPOUSE OPEN AN ACCOUNT, OR BE A JOINT OWNER OF MY ACCOUNT? CAN I OPEN AN ACCOUNT FOR MY CHILDREN?

A non-US spouse can be a joint owner of the account of the American member, but cannot hold his or her own account. A child 17 or older can open his or her own account. SDFCU also has custodian and minor accounts available for children. 

 

WHAT CAN I DO WITH MY ACCOUNT?

  • Pay electronically federal and state taxes
  • Receive electronically tax refunds
  • Receive electronically Social Security payments
  • With the debit card or prepaid card, make funds available to children and household helpers; and monitor activity 24/7
  • Maintain cash balances while getting most favourable returns
  • Use "Bill Pay" to make payments with respect to a property or an elderly relative
  • Pay school fees or tuition
  • Finance purchase of a car – even one garaged overseas

 

SDFCU PRODUCTS and SERVICES INFORMATION

 

DOES SDFCU PROVIDE FINANCIAL COUNSELING AND CAN I USE MY OWN INVESTMENT ADVISOR?

SDFCU offers the opportunity to work with a certified financial counselor, if you like. This is a free service and you can find more information here http://www.sdfcuinvest.org/.

 

You can appoint your own investment advisor, using a power of attorney. What this costs is a matter for you and your investment advisor to agree. 

 

CAN I HAVE AN IRA OR ROTH IRA ACCOUNT OR A 401(k) ACCOUNT?

SDFCU does offer IRA accounts. SDFCU does not offer 401(k) accounts but does have financial consultants available to discuss retirement options through a partnership with Securities America. 

 

CAN I DO ONLINE AND MOBILE BANKING WITH SDFCU FROM MY RESIDENCE OUTSIDE OF THE UNITED STATES?

Yes, you can do online banking at www.sdfcu.org and download the SDFCU app. 

 

DOES SDFCU ISSUE CREDIT AND DEBIT CARDS? WILL MY SDFCU CREDIT OR DEBIT CARD BE ACCEPTED OUTSIDE OF THE UNITED STATES?

SDFCU issues both credit and debit cards. The cards are accepted anywhere that accepts VISA outside of the United States. 

 

CAN I GET A MORTGAGE FROM SDFCU TO BUY A PROPERTY? CAN THE PROPERTY BE OVERSEAS?

SDFCU provides mortgages to buy property, but the property must be in the United States. As a member of SDFCU through ACA, you may be able to qualify your home in the United States as a primary residence even if you live overseas and are not currently occupying the property. This qualifies you for better terms on the loan, but there are regulatory restrictions so not everyone may qualify. SDFCU will help you understand your ability to qualify based on individual circumstances.  In addition, SDFCU offers mortgages on second properties, again in the US, at the same rate as first properties, rather than a higher investment property rate. 

 

CAN I GET A LOAN FROM THE SDFCU TO PAY FOR MY CHILDREN’S COLLEGE EXPENSES?

Yes, SDFCU offers personal loans that may be used for educational costs. These are not run through any federal loan program. 

 

IS THE SDFCU CONSIDERED A FOREIGN ACCOUNT OR A US ACCOUNT FOR FATCA AND FBAR REPORTING?

SDFCU accounts are not included in your Foreign Bank Account Report (FBAR/FinCEN Form 1124) or Form 8938 (Statement of Foreign Financial Assets, which is attached to your regular Form 1040). It is US dollar denominated. You can “marry it up” with your financial planning including savings, retirement and college/school fees planning. Study the free information and consult your advisors. But remember, this account is a new thing and he or she may need to do a little homework.

SDFCU will introduce you to a financial counselor if you like or you can appoint your own financial advisor or investment manager. You do not have to say goodbye to your existing advisor/manager.

Many people will want to keep their local bank account wherever they live. The drycleaner in London may still want to debit your British Pound-denominated bank account down the street. 

 

CAN I HOLD ACCOUNTS WITH THE SDFCU IN CURRENCIES OTHER THAN US DOLLARS?

No, SDFCU offers accounts denominated only in US dollars. 

 

ARE FEES AND LOAN RATES THE SAME AT A CREDIT UNION AS THOSE CHARGED BY BANKS?

Because credit unions are non-profit organizations, they charge fees and loan rates which are generally lower than those charged by banks, and they pay deposit rates which are generally slightly higher than those in banks.  Checking is free. Credit cards currently have no annual fees. 

 

ABOUT SDFCU

 

HOW DID SDFCU GET STARTED?

SDFCU was chartered independently in 1935 by a group of eight State Department employees. By 1945, SDFCU had only 975 members. Thanks to the steady growth in membership and the addition of associated member groups, such as, American Citizens Abroad, SDFCU now has over 77,000 members worldwide. 

 

IS THE SDFCU CREDIT UNION MANAGED BY OR PART OF THE US STATE DEPARTMENT OF US GOVERNMENT?

No. The financial institution is the State Department Federal Credit Union. This is entirely separate from the US Department of State. The credit union is not owned by the US Government. It is owned by its members/account owners – including you when you join. It just so happens that its origins trace back to the need to provide banking services for State Department employees strewn around the world, who have the same problems as many Americans overseas.  Moreover, the SDFCU, while including in its name the term “Federal,” is not run by the Government or limited to Government employees. Simply put, it has opted to organize itself under federal credit union regulations instead of state banking laws. 

 

WHAT IS A CREDIT UNION? WHAT’S THE DIFFERENCE BETWEEN A CREDIT UNION AND A BANK?

In the United States, a credit union is a not-for-profit organization which is organized in order to provide financial services to its members. Banks, especially those quoted on a stock exchange, are by definition entities which aim to maximize corporate profits. Conversely, credit unions reinvest their "profits" in their member-owners through better dividend and loan rates. There are nearly 100 million members of credit unions in the United States. SDFCU alone has over 77,000 members worldwide. What makes SDFCU the perfect “partner” is that it is accustomed to dealing with account owners around the world, from developed countries like Germany, France and Switzerland to less-developed, less well-known countries. 

 

WHAT “BANKING-LIKE” FINANCIAL SERVICES DOES A CREDIT UNION PROVIDE?

Credit unions provide a full suite of financial products and services including: checking and savings accounts, credit and debit cards, money market and share certificates, mortgage and personal loans, online and mobile banking. 

 

IS MONEY IN AN ACA-MEMBERS/SDFCU ACCOUNT AS SAFE AS IT IS IN A BANK?

Yes. Member savings are federally insured to at least $250,000 and backed by the United States Government. SDFCU like other federally chartered credit unions in the United States, is regulated and supervised by the National Credit Union Administration, an independent federal agency.

 

READY TO GET AN ACA-MEBMER/SDFCU ACCOUNT?

 

IF YOU ARE ALREADY A MEMBER OF ACA, GREAT!

To open your ACA-Members/SDFCU account, go directly to the SDFCU website here to join and select the green "Join" button.  Proceed to join by choosing American Citizens Abroad (ACA) under the eligibility "I qualify through my relationship with one of your organizational affiliates".

 

IF YOU'RE NOT ALREADY A MEMBER OF ACA, JOIN NOW

To join ACA, go to "Join Now" on the ACA website and Membership Levels and Benefits are explained there. You will receive a confirmation email upon completion of your ACA membership. Then, to open your ACA-Members/SDFCU account, go directly to the SDFCU website here to join and select the green "Join" button.  Proceed to join by choosing American Citizens Abroad (ACA) under the eligibility "I qualify through my relationship with one of your organizational affiliates".