U.S. Bank Accounts for Americans Abroad

But keeping an account and keeping reliable access to it are two different things. A failed transfer, outdated contact information, or an identity-verification request can become much harder to resolve when you live thousands of miles from a branch.

There is also a separate question: How is the money in that account taxed when you live abroad?

How are U.S. bank accounts taxed for American expats?

U.S. citizens generally remain subject to U.S. tax on their worldwide income while living abroad. Moving overseas does not automatically end U.S. filing obligations.^[1]

For an ordinary checking or savings account, distinguish between the money you already own and the income it generates:

Existing savings: Keeping previously taxed savings in an account generally does not create a new federal income tax simply because the money remains there.
Bank interest: Interest earned in a U.S. or foreign bank account generally belongs on your U.S. return when you have a filing requirement.
Transfers between your own accounts: Moving your own savings between accounts generally does not itself create income. The underlying source of the money still matters.

For example, if you have $40,000 in previously taxed savings and earn $1,200 in bank interest, the interest is generally the income to consider—not the entire $41,200 balance.

The foreign earned income exclusion does not exclude bank interest. It applies to qualifying earned income, such as compensation for services, rather than interest or dividends.^{[2] [3]}

Your country of tax residence may also tax the interest. Whether a foreign tax credit or treaty provision provides relief depends on the countries involved and the applicable rules.

Does a U.S. account count toward the FBAR threshold?

An account maintained at a bank branch in the United States generally is not a foreign account for FBAR purposes simply because its owner lives abroad. The account’s location matters: an account at a foreign branch of a U.S. bank can be a foreign account.^[4]

For reportable foreign financial accounts, an FBAR is generally required when their combined value exceeds $10,000 at any point during the calendar year. That is an aggregate threshold across accounts, not a separate $10,000 allowance for each account.^[5]

Reporting an account and owing income tax are separate issues.

Why can banking access become difficult overseas?

An account restriction does not, by itself, establish that there is a tax problem.

Banks use identity checks and security controls to protect accounts. Bank of America, for example, describes using mobile subscriber information to help verify identity and prevent fraud.^[6] Losing access to your registered phone number can therefore complicate verification.

Potential issues to investigate include:

An expired identification document or outdated address.
Difficulty receiving security codes overseas.
A failed transfer or other activity requiring additional verification.
The bank’s policies for customers residing in your particular country.

The cause must be confirmed with the bank. A screenshot of an account lock cannot establish whether the issue involves security, residency policies, missing documentation, or another restriction.

What happens if an account becomes inactive?

An account with money in it can still become inactive.

Depending on the applicable state law and account terms, funds from an abandoned account may eventually be transferred to a state’s unclaimed-property program, a process commonly called escheatment.

Do not assume that automatic interest payments or recurring transactions will keep the account active. Bank of America’s published agreement explains that certain automatic transactions generally do not count as activity for this purpose.^[7]

If you receive an inactivity notice, contact the bank promptly and ask what specific action is required before the stated deadline.

What should Americans abroad do?

Before moving—or while you still have access—confirm that your bank supports customers residing in your destination country. Keep your residential address, tax information, identification, and contact details accurate.

If access is already restricted, ask the bank:

What exactly triggered the restriction?
Which documents or verification steps are required?
Is there a remote process for customers living overseas?
What action will prevent an inactivity-related transfer to the state?
Can the matter be escalated to a team that handles overseas customers?

Request a case number and written instructions. Do not assume that sending a small deposit will resolve either an identity restriction or an inactivity notice.

Banking access and tax compliance need separate attention

A functioning bank account does not confirm that your taxes are correct, and a locked account does not automatically mean you owe tax.

At Valoria Consulting, we help Americans abroad understand their U.S. tax filing obligations, report foreign accounts, and address complex international tax questions with support from our tax attorney and CPA team.

Living abroad with U.S. and foreign accounts? Schedule a consultation to review your tax and reporting obligations.

Explore Valoria’s expat tax preparation services

Sources

General educational information; tax treatment, reporting requirements, and bank policies depend on the facts and the account terms. Sources checked October 29, 2026.

U.S. Bank Accounts for Americans Abroad: Taxes, Account Locks, and Inactivity