Author Topic: Direct Deposit for Relative Abroad  (Read 1236 times)


  • 5 O'Clock Shadow
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  • Location: Queens, NY
Direct Deposit for Relative Abroad
« on: July 28, 2016, 07:57:58 PM »
I have a relative who retired abroad. She is not a US citizen, but she was a legal resident and lived and worked here before retiring. She has a small pension that, until recently, was paid to her via a paper check which was deposited at a bank in her country. Her home bank now says they cannot deposit foreign checks. I've check with the the company that pays her pension here and they have said they cannot do a direct deposit to a foreign bank.

One solution we've been considering is opening an online account such as Capital One 360 checking. The pension could be direct deposited into this account and she could access it with an ATM card abroad. Of course she will have to pay some fees, but Capital One has no foreign transaction fee. It would just be a fee for use of the local ATM.

One wrinkle in this plan is that she is neither a US citizen or a resident. So she cannot open the account. If I opened the account in my name and her pension was deposited into it, would that present any tax issues for me? Would it be considered MY income? It would be a separate account from my own finances...essentially it would be hers, except in name.

Constructive thoughts and ideas welcome! Thanks!


  • 5 O'Clock Shadow
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  • Posts: 80
Re: Direct Deposit for Relative Abroad
« Reply #1 on: July 29, 2016, 09:30:13 PM »
I don't know, but you are about to fall off the bottom, so I bump.


  • Stubble
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Re: Direct Deposit for Relative Abroad
« Reply #2 on: July 31, 2016, 09:20:49 AM »
This is a problem that I deal with at work for Americans (or their dependents) abroad who get social security. I suspect the issue is a combination of them not wanting to deal with currency conversion fees and the fact that the American ACH system is not used world-wide, so there can be technical problems in making the transfer.

She needs to find in her home country a bank that will allow her to open a dollar denominated account that can take American ACH transfers. The best way to do that is probably to call the American Citizen Services section of the closest Embassy and ask for the person who handles federal benefits questions. Then ask them what banks they suggest that their pensioner use. There SHOULD be one... but given the FATCA tax compliance issues, it may be a complicated issue. The person at the Embassy will know the details.

Otherwise, you could look into becoming her authorized payee, and set up the account as a custodial account for her. That should take care of tax liabilities, but may create additional problems with the Patriot Act and Anti Money Laundering compliance. But ask your bank and see what the options are.