A guide on how to legitimately open a US Bank account as a Foreigner (Canadians can use this method, or this method without having to leave Canada).
This is a guide for a real US Bank account, not a Canadian Bank Account in US Dollars or an expensive real US Bank account through a Canadian bank. A real US Bank Account will let you transfer US$ freely to/from Paypal, write cheques to Americans that won't be on hold for forever, accept USPS Domestic money orders and save you greatly on other currency conversion fees. All for no monthly fees!
Why I, a Canadian, Setup a US Bank Account
Having all of my Google Adsense Earnings in US Dollars, I figured that I should start banking with a US Bank account. I do have some US Dollar Transactions, like my Telcan Toll Free Number and my DealExtreme purchases. I also buy and sell items on Paypal, and I hate having Paypal's currency exchange fees when I buy, or transfer funds to my Canadian bank account. I'd rather keep it in US Currency than get dinged on the exchange only to get dinged again when I need to buy something with a credit card in US$.
So, I set out to get an American Bank Account in the US. The US Banking Industry is far more competitive than the Canadian banking industry. I was able to get a free checking/chequing account with a free order of cheques and a US$ Debit Visa card with no monthly fees, unlimited transactions and with no minimum balance requirements. My main requirement is to make sure I do at least 1 debit or credit transaction every six months. Good luck trying to find this kind of offer in Canada.
So how do I get a US Personal Bank Account as a Canadian?
You MUST apply in person. This is probably the hardest part. You should be able to get most any chequing/checking account that a regular US Citizen/resident can get, but many banks aren't really aware of how to sign up a Canadian. For this reason, I suggest going to a bank in a major border town if possible, since they've likely done this before. Also, you should call beforehand and even ask to speak to the branch manager(s) to determine their familiarity with foreigner bank accounts, and perhaps ask them to do a bit of research with their own information systems, since it should be possible with any of the major US Banks.
What documentation do I need to bring?
I believe what is required is a proof of citizenship (I used my Canadian Passport), and another piece of government issued ID (I used my driver's license). I'll update this list when I can find the list of acceptable ID again.
Also, make sure you bring some US$ cash, as there is usually a small account opening minimum deposit. Mine was US$50, Bank of America's is US$25.
Who did I go through?
I started my account with National City, a regional bank based in Cleveland Ohio. I was lucky in that the branch manager that I spoke with was knowledgeable with setting up accounts for Canadians, so he knew which forms to have me fill out etc. etc. Their Free Checking Account had the features that I needed, had no monthly fees and was okay with only periodic activity. If they are in your area of interest, I'd recommend them based on my experiences so far.
Which Bank Should I try to get an account with?
The US Retail Banking industry is very fractioned. In other words, companies with a big presence in one part of the country may be non-existant and unknown in another. There are lots of regional and local banks, as well as some somewhat national banks, like Bank of America. So, do your research online to find accounts that meet your needs, but first take a look at the branch locator, since it may not do you much good if it is hundreds of miles from where you will be (say, you shop in Buffalo, but winter in Florida). Bank of America has a presence in both Buffalo and in Seattle Washington, for those Toronto and Vancouver people visiting this site.
How do I get money in my account?
The obvious: Deposit US Cash into the account. Beware that Canadian cash isn't as well-accepted in the US. My branch said that their's did not handle foreign currency bills/coins. If you deposit a cheque from another country, even if it is in US Dollars, a long hold will probably be placed on the funds, in my case, 45 days. Wire transfers are expensive in North America and subject to problems.
Quite possibly the best method that I've found, though I have yet to try, is to use XEtrade. They will allow you to transfer money to them from your Canadian account, exchange it at a good rate, and then transfer it to the US account as an e-cheque. XETrade is run by Xe.net , a currency conversion rate site that I've used for a decade now to monitor exchange rates.
I may never have online access to my account, I'm not super sure why. As well, when I tried calling their telephone service, the first prompt was for my social security number (which I obviously did not have), and the system would not process without one. The branch manager that set up my account asked that I call him back in a few days to see what might be necessary to have these set up. He also stated that I might end up having to call the branch itself for updates as required, which I would be okay with. I think it either has to do with laws that have changed limiting foreigner's control over accounts (like the Patriot Act requiring account openings to be done in person), or just their system's dependency on SSNs as a unique identifier (which is a terrible practice really).
US Debit Card System Compared to Canadian Interac:
The US Debit card systems is different than Interac. The US system runs over the existing Visa/Mastercard system with a Visa/Mastercard card and the money is indeed directly taken out of one's chequing account upon purchase. I also believe if you try to make a purchase over your balance, the transaction probably will go through and you will be charged a (very large NSF-esque) overdraft fee, instead of having the transaction declined. I believe my US "Debit" Visa card will work like any other Visa card in Canada, but I haven't tried that yet.