Leaving the US permanently. What to do with my savings? (non-US citizen)
September 4, 2014 10:27 AM   Subscribe

I'm a french citizen, I've lived in the US for the past 10 months (leaving in a month) and I have ~10k on my savings account. What should I do with the money?

I'll be moving back (permanently) to France in about a month and I'm not sure what to do with my 10k in savings. I'd like to keep them on a US account, but I also want this money to at least keep up with inflation. My current bank (Chase) savings rate is 0.01%, which is way below inflation.

Brownie points if there isn't too much red tape, as it'll be quite challenging to manage that from France (e.g., paying taxes in the US as non-citizen living in another country doesn't sound like a simple mission). I value lower risks over higher interest rates.

It I can't find anything interesting, I'll just transfer it to euros in my french account, but the euro isn't that strong these days.
posted by eta to Work & Money (13 answers total) 4 users marked this as a favorite
 
I don't know how complicated this is, especially for non-citizens who live abroad, but you might want to consider investing it in Vanguard (specifically, in the Total Index Fund). It basically tracks the stock market. Obviously, like the stock market in general, there is no guarantee of it going up in the short term (or, well, ever), but historically it has done well over the long term. If you don't anticipate needing the money in the near future, might be a good idea. I recommend Vanguard in particular because index funds are central to their philosophy and their managing fees are very low. Again, I have no idea how difficult this would be to manage once you go abroad, but I have found their personalized online investing site to be very user-friendly.
posted by ClaireBear at 10:31 AM on September 4, 2014


I do not know the legalities with regard to your tax liability, etc, BUT in terms of what might make this easier for you:

Barclays has an online-only savings account with a competitive interest rate. Since Barclays is a bank with an EU presence, it might make things logistically easier for you depending on where you want to access the money in the future.

I have found their customer service team to be very capable (relative to say, Chase's somewhat lousy customer service) so it may be worth calling them to talk about the options available to you.
posted by phunniemee at 10:33 AM on September 4, 2014 [1 favorite]


Do you know of any French investment firms which could keep that money in US dollars and invest it in US stocks and mutual funds? It seems that that situation would be easier to manage from France than any account located at a US-based institution.
posted by tckma at 10:33 AM on September 4, 2014


On lack of preview: if you do decide to invest it, I will heartily back up ClaireBear's suggestion of both Vanguard (they are wonderful) and VTSMX.
posted by phunniemee at 10:34 AM on September 4, 2014


Thanks for the helpful replies!

tckma, I didn't think of that and that'd indeed be the easiest option. I'll look into it, especially if they offer services like Vanguard's.

(that or I go all in on bitcoins)
posted by eta at 11:28 AM on September 4, 2014


I believe if you invest in something US domiciled you will have to file a return with the US although only dividends are taxable, but unfortunately you'll need to claim back what you actually owe because the withholding is 30%. Interest payments aren't taxable, but you'll still need to file a return I believe - I don't know what the minimum size is for that. Basically its a pain in the ass for little to no benefit.

There are more tax efficient ways to do but at 10k you don't have enough assets to be worth it.

Honestly the best thing for you to do is bring the money back into France if repatriating it is non-taxable, or at least research something cheap and offshore if it would be taxable. Either way if you wanted to you could keep the money in Dollars.

The IRS is a huge PIA for non-resident aliens.
posted by JPD at 11:29 AM on September 4, 2014


Also I'd be surprised if Vanguard is interested in having non-resident aliens as customers of their US business.
posted by JPD at 11:38 AM on September 4, 2014


I'd be surprised if Vanguard is interested in having non-resident aliens as customers of their US business.

Yeah, which is why you'd want to set this up *before* you left the country.

As a non-resident, the dividend income on a $10K investment is not going to require filing tax returns. JPD is right that you'll (probably) get hit with 30% withholding - but that's only on the dividend income. Say you make a 5% return - that's $500 per year, with $150 withheld. Up to you whether claiming back (some fraction of) the $150 is worth filing taxes for, but I'd guess not.

The only problem I can see is if you sign up for dividend re-investment, which may be conflict with the withholding requirement.

Alternatively, an online-only savings account like Capital One 360 (formerly ING) offers 0.75% interest, which isn't much, but better than 0.01%... (And yes, probably the same 30% of 0.75% withholding applies to that too.)
posted by RedOrGreen at 12:27 PM on September 4, 2014


I think you'd need a green card to qualify as a resident alien. I don't thing a time limited visa qualifies?
posted by JPD at 12:40 PM on September 4, 2014


If I can't find anything interesting, I'll just transfer it to euros in my french account, but the euro isn't that strong these days.

Keep in mind that if you're taking dollars out and converting them to Euros, you want to do that when the Euro is at a low against the dollar (like today), because that way you get more Euros!
posted by RedOrGreen at 12:43 PM on September 4, 2014


I think you'd need a green card to qualify as a resident alien. I don't thing a time limited visa qualifies?

As long as you have a Social Security number - which you do if you've lived in the US for a while and paid taxes - that's all that matters to someone like Vanguard. (AFAIK; IANATax adviser; etc etc.)
posted by RedOrGreen at 12:45 PM on September 4, 2014


The Vanguard suggestion works: I know non-citizens who have done this before they move out. Of course, you could just open an account with TDAmeritrade, Fidelity, e-Trade, or Charles Schwab, and do the same.

The biggest question should be: what do you want the money for?
- Just a short term holding pattern? (in that case, keep more liquid)
- Just a short term holding pattern because you need absolutely all the money to exist in X amount of time? (In that case, keep it more liquid, like a low yield savings account)
- Want to invest it and make it grow? (tracker funds, baby!)
- Are you going to move back to the US (any likelihood at all?)

I would open an account with on of the big trading companies, and book an appointment to talk to a financial adviser there. They won't give you earth shattering advice, but can help you manage risk and figure out your options.

If you do decide to move it back to France (I have no idea what is the best investment option in France), you can use something like TransferWise - to transfer money, and is very low cost compared to most bank.
posted by troytroy at 1:42 AM on September 5, 2014


Thanks for the transferwise tip, looks like a good option to move money back, if I can't make it work with vanguard.
As usual I'm impressed by the quality of answers on mefi, thanks guys!
posted by eta at 6:34 AM on September 5, 2014


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