FAQ: Sub-accounts for banking across borders

Adam Rust

I want to establish an account for my son. I want to link it to my
existing bank account. My son is fourteen. Can I do that? If so, will I need to
provide his birth date and a Social Security number?

While your son cannot open an
account in his name until he is eighteen, you can get an account for him
through your bank account. To do so, you will sign up for a “sub-account.” The sub-account
can still have a separate card with his name on it. However, there will be some
limitations. The only source of funding for the account will be from an
electronic transfer made from inside your full-service bank account. Your son
will not be able to load cash on to the card, nor will he be able to deposit a
check by remote photo deposit capture. You will still have to provide a
date-of-birth for your son because the bank will most likely want to make sure
that your son is at least thirteen years old.

My daughter is twelve. Can I set up a sub-account for
her as well?

No. Your daughter must be at
least thirteen years old. This rule stems from conditions associated with the
Child Online Privacy Protection Act (“COPPA”). COPPA requires that a bank be
able to shut down an account immediately if so requested by the parent. Banks
do not want to make that promise, as it may be difficult to close an account in
such short order if it still holds funds.

I am a citizen of Mexico, but my fifteen-year-old
daughter is a legal resident of the US. Currently, she lives in the US, but I
am back in Mexico. I have chosen a person to act as her guardian. My daughter
receives a government benefit payment. Could she accept that payment through a
sub-account, provided that the primary account was opened in the name of the
guardian, even if this guardian is not a relative?

Yes. The benefit payment
would have to go the guardian first, however. Then the guardian would transfer
the funds from his account into the sub-account held by your daughter.

I work in the United States through the H-2A program.
Can I get a bank account?

The answer is yes, but it depends.

H2-A workers have social security numbers, so documentation is not a problem.

If you have a permanent or semi-permanent address, then you will qualify for any of the prepaid debit
cards listed on WiseWage. However, you will have to provide documentation that
demonstrates your residence. If you live in a dorm where you do not have any
bills in your name, then this could be difficult. At the very minimum, you need
a secure place to receive mail. After all, the bank sends the card in the mail.

If you do not have a permanent address, then you will not be able to get an account. However, your employer
(farmer) could establish an account with a payroll card, the bank verifies the identity of the farmer.

I want to use a sub-account to transfer money to my mother who lives in
Guatemala. Can I do that?

Yes, you can. You could open
an account in your name and then set up a sub-account in the name of your
mother. However, a bank will only mail cards to US addresses. You will have to
send the card to your mother. You can then transfer money from your account to
a sub-account for free. The funds will be sent as US dollars, so for your
mother to use it in Guatemala, she will have to exchange those dollars for pesos.
Most banks will charge her an international transaction fee. WiseWage’s
Waleteros card is the exception to the rule. Waleteros does not impose a fee on
transactions made outside of the United States.

The benefit of a transfer to
a sub-account is that avoids the costs of a remittance. Moreover, the transfer takes
place immediately – there is no waiting for funds to settle.

Picture of card
Mexico City village

Can I use a phone with a number from a foreign country? For example, if my phone and my phone plan are from Mexico, can I get an app-based bank account in the United States?

Yes. However, a caveat is that you would have to be in the United States at the time that you applied for the account? Presumably, your application would occur at the moment when you downloaded the app. You could do this because a bank could geolocate the phone. The bank would then have verification that the applicant was in the United States. Of course, other rules would still apply: you would need an address in the United States where you could receive the card, and you would have to meet the bank’s standards for documentation.

Using a geolocation service to verify an account application is a fairly common practice. Many people keep the same phone number when they move to a new part of the country. A bank would detect that the area code for the related phone number is not consistent with the address given on the application. However, because the bank can detect the location of a smartphone by GPS, there is no uncertainty.


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