Ask a group of veterans who have lived overseas for a few years what caught them off guard, and banking comes up fast. Not the big stuff, the small stuff: a verification code texted to a U.S. number you cancelled, a debit card that expired while you were 8,000 miles from your mailbox, an account frozen because the bank noticed a foreign IP address.
This guide is about avoiding that. It covers why you still need a U.S. account, how to set it up before you go, how to move money overseas without getting burned, and the reporting rules that come with a foreign account. We don't recommend specific banks or transfer companies. The goal is to help you ask the right questions of whichever ones you use.
Why a U.S. account still matters
Federal payments are now electronic by default. Executive Order 14247 directed Treasury to stop issuing most federal paper checks starting September 30, 2025, with limited exceptions. That means your VA compensation, military retired pay and Social Security need to land somewhere electronically.
Some of that can go straight to a local bank. VA offers international direct deposit in a set list of countries (its FMP page lists 30), DFAS can deposit retired pay in countries that have an agreement with the U.S. Treasury, and Social Security has its own program. But the country lists are not the same, and some countries where veterans live are missing from one list or another. DFAS says it plainly: if the country you live in does not have an agreement with the U.S. Treasury, you can open an account at a financial institution in the U.S. to receive your payment and then transfer the funds internationally. See our guides to VA payments abroad and military retired pay abroad for the country lists.
A U.S. account also gives you:
- A backup if a local bank freezes your account during a visa change or compliance review.
- Self-service. VA.gov lets you change U.S. direct deposit yourself. Social Security's International Operations page notes that changing your direct deposit is one of the services not available online from outside the United States, so getting it right before you leave matters.
- A place for U.S. bills: credit cards, insurance, a storage unit, help for family back home.
If you don't have a U.S. account at all, VA's Veterans Benefits Banking Program can connect you with participating banks and credit unions that will work with veterans to open one. VA's direct deposit page links to it.
Set up your U.S. account before you leave
Most banking problems abroad trace back to something that was easy to fix stateside and hard to fix from overseas. Work through this list before you fly.
- Ask your bank about foreign addresses. Some U.S. banks restrict or close accounts when a customer lists a foreign residential address. Ask directly what their policy is, and get the answer in writing if you can. Keep your information honest. Hiding that you live abroad can cause bigger problems later.
- Fix two-factor authentication. If your codes come by text to a U.S. number you plan to cancel, you will lock yourself out. Switch to an authenticator app if the bank supports it, or keep a U.S. number that can receive texts abroad. Test it from a foreign network before you rely on it.
- Get a backup card. Carry two debit or credit cards from different accounts, and keep them in different places. Note each card's expiration date and ask how the bank delivers replacements overseas.
- Check the fees. Foreign transaction fees, ATM fees and incoming and outgoing wire fees vary a lot between institutions. A few percent on every withdrawal adds up over a year of living on a fixed income.
- Know how to send an international wire. Some banks require an in-person visit or a phone call the first time. Find out now, and set up any recipient accounts while you can still walk into a branch.
- Name someone you trust. A financial power of attorney, prepared with a lawyer, lets someone in the U.S. deal with your bank if you are sick or unreachable. Ask your bank whether it accepts general powers of attorney or requires its own form.
- Update every federal agency. When your mailing address changes, update it separately with DFAS, VA, Social Security and the IRS. One agency does not tell the others.
Opening a local account
Local requirements vary by country and change often. In many places you need a residence visa or permit, a local address and a local tax number before a bank will open an account. Ask the bank what it needs, and ask specifically whether it can receive incoming international payments from the U.S. Treasury, because some branches handle that poorly.
Expect to be asked about your U.S. tax status. Foreign banks commonly ask U.S. customers for tax forms because of U.S. reporting rules. That's normal, not a scam, as long as you are dealing with the bank directly.
Moving money overseas: know your rights
When you send money from the U.S. to another country, you are usually making what federal law calls a remittance transfer. The Consumer Financial Protection Bureau (CFPB) says federal protections cover most electronic transfers of more than $15 sent by consumers in the United States to people or businesses abroad through a remittance transfer provider. Banks, credit unions and money transmitters can all be providers. Consumer international wires are generally covered.
Under those rules, the CFPB says:
- You get disclosures before and after you pay, including fees, taxes, the exchange rate and the amount expected to be delivered. Use them to compare providers on the total cost, not just the advertised fee.
- You generally have 30 minutes to cancel at no charge, as long as the money has not already been picked up or deposited.
- You have 180 days to report an error, counted from the date the provider said the money would be available. Providers generally have 90 days to investigate.
Two limits to know. First, these rules apply to transfers sent from the United States. Money you send from a foreign bank falls under that country's rules. Second, the CFPB notes that companies that handled 500 or fewer transfers in both the prior and current year are not treated as providers, so federal protections may not apply to them. Keep every receipt until the money arrives.
Exchange rates are where the money goes
The fee is only part of the cost. The exchange rate a provider gives you is often worse than the market rate, and that spread is where much of the profit sits. Compare the amount that will actually arrive in local currency, which the disclosure must show. If your benefits qualify for international direct deposit, compare that too: VA's flyer says Treasury covers currency conversion fees on IDD payments, although your local bank may charge its own receiving fee.
Scam warning
Never send money to someone you have not met in person, especially someone you met online, and never send money to "unlock" a benefit, an inheritance or a visa. VA, DFAS and Social Security do not charge you to receive your own payments. If a message pressures you to act fast, stop and call the agency at a number you look up yourself.
Reporting your foreign accounts
Holding a foreign account is legal. Not reporting it when required is where people get hurt.
| Report | Who files | Threshold |
|---|---|---|
| FBAR (FinCEN Form 114) | U.S. persons with a financial interest in, or signature authority over, foreign accounts | Combined value of foreign financial accounts over $10,000 at any time during the calendar year |
| IRS Form 8938 (taxpayers living abroad) | Filed with your tax return | More than $200,000 on the last day of the year or more than $300,000 at any time ($400,000 and $600,000 if married filing jointly) |
The FBAR is filed electronically through FinCEN's BSA E-Filing System, separate from your tax return, and FinCEN says individuals can file their own FBAR without registering for an account. The FBAR threshold is low. Rent money, a car fund and a few months of deposited benefits can push you over $10,000 without your noticing. Track your highest balances each year.
The rules have more detail than we can cover here, so work with a tax professional who handles Americans abroad. See also taxes and voting abroad and our planned guide on FBAR and FATCA for veterans.
Joint accounts and what happens at a death
Many couples abroad run everything through one joint account. Understand the federal rule before you do. DFAS says retired pay ends on the date of the retiree's death, and if a payment was issued after that date, DFAS must ask the bank to reclaim the entire payment. If the retiree had a joint account, the whole amount is pulled back. DFAS also asks survivors not to use a joint account shared with the deceased for later payments, because banks return those payments.
The practical fix: make sure a surviving spouse has an account in their own name, with enough money in it to cover a month or two of expenses while paperwork is sorted out. Our guide to SBP and the paperwork every retiree abroad should finish covers the rest of that checklist.
Example (hypothetical): An Army retiree and his Filipino wife live in Iloilo. His retired pay and VA compensation go to his U.S. account, and he wires money monthly to their joint local account. After reading about the joint-account rule, they open a local account in her name only and keep a small cushion there. They also make sure she knows the login for his U.S. bank and has a copy of his power of attorney, so a sudden emergency does not leave her without cash.
A short checklist
- One U.S. account in good standing, with online access tested from abroad.
- Two-factor codes that work without a U.S. SIM card.
- Two cards from different accounts, with expiration dates on your calendar.
- A local account that can receive international payments, if you use one.
- Your highest foreign balance tracked for FBAR purposes.
- A spouse or partner with their own account and access to essential information.
- Current addresses on file with VA, DFAS and Social Security.
OCONUS Veterans is not affiliated with VA, DoD or any bank. This is general information, not financial, legal or tax advice. Confirm details with your bank and a licensed professional.
Common questions
Do I need to keep a U.S. bank account if I live overseas?
It is not required, but most veterans abroad keep one. Federal payments are electronic now, international direct deposit is not available in every country, and some changes, such as Social Security direct deposit, cannot be made online from abroad.
What protections do I have when I send money abroad?
For most electronic transfers over $15 sent from the U.S., the CFPB says you get cost and exchange rate disclosures, generally 30 minutes to cancel for free, and 180 days to report an error.
When do I have to file an FBAR?
FinCEN says a U.S. person must file an FBAR if the combined value of their foreign financial accounts exceeds $10,000 at any time during the calendar year.
Can my U.S. bank close my account if I move abroad?
Some U.S. banks restrict or close accounts for customers with foreign addresses. Ask your bank about its policy before you move, and keep your information accurate.
Is a joint account a problem for military retired pay?
It can be. DFAS says if retired pay is issued after a retiree's death, it reclaims the entire payment from the bank, including from a joint account. Make sure a spouse has an account in their own name.
Ask vets who have done it
Post your question in the free community. Members in your country have usually been through it.
Published August 26, 2026. Information only, not legal, tax, immigration or medical advice. Confirm with the official sources.
