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Everyone needs a bank account and phone number for modern life. Anyone who doesn't have a physical address, whether forced by poverty or by lifestyle choice, faces the challenge of maintaining a bank account in the face of banking regulations which require a physical address. Three USA states offer a solution giving full time travelers residency without requiring a normal physical address.
Normally, people maintain accounts with banks, investment brokerages, credit cards, and other financial institutions, through normal living arrangements. Living in a regular house or apartment while maintaining accounts with utility companies serves as proof of domicile, a.k.a. proof of residency. With those documents, in the USA, a person goes to their state drivers licensing bureau (e.g. Division of Motor Vehicles) for either a drivers license or identity card.
For example, California's new Real ID requirements to get a drivers license or ID card are:
- A document proving identity, such as a passport, naturalization card, birth certificate, etc.
- Two documents showing financial commitments like utility bills, cell phone bills, medical documents. At least one must show a physical address.
Together these demonstrates who someone is, and where they live, and probably guard against identity theft and the like. The legal concept of domicile, as we discuss later, includes financial commitments to living in a place where your intent is to return to that physical location after traveling. In all states in the USA, getting a drivers license or ID card requires demonstrating this sort of commitment.
But, what about those whose life does not allow them a regular "normal" living arrangement? A traveling nurse, traveling salesman, long-haul trucker, humanitarian aid worker, digital nomad, travel vlogger, retired folks visiting relatives or sight-seeing full time, or others, may be traveling 365 days out of a year. If one never visits their "home" then it is a waste of money to own or rent a home or apartment.
Having a drivers license or ID card, bank account(s), cell phone(s), and the like, are all parts of normal life in the modern age. But, current requirements for all these are now tied owning or renting a house or apartment which gives one a permanent physical address. What about those whose life requires they do not have a physical address?
My life has given me a period of digital nomad living and traveling in Eastern Europe. The trip started by moving out of the house my partner and I rented in California, putting all our stuff into storage, and not moving into another house anywhere else. We flew to South Dakota to establish residency before flying to Europe. We do not have a home of any kind in the USA, and do not have a fixed abode in Europe. How are we to maintain bank accounts, phone numbers, etc in the USA?
Let's pick that apart a little. I established residency in South Dakota without owning or renting a house or apartment anywhere in the USA. Not having a home usually means being homeless living on the street. But, no, we're living comfortably in Eastern Europe while maintaining financial institutions, and a drivers license, in the USA.
How are we maintaining bank accounts without a fixed physical address? It has to do with the side trip to South Dakota.
Unfortunately there is a difficulty we've faced with maintaining bank accounts. Governments, in the name of fighting money laundering, require everyone holding an account with a financial institution to have a physical address. It's not enough to have a drivers license, but to have a physical address. The forums for full-time travelers are full of stories of closed bank accounts when the bank realized their customer didn't have a fixed address.
This article discusses how to use residency in South Dakota with banks, cell phones, and the like, and what to do if/when you get a Know YouR Customer letter.
Residency and Domicile
Most of us can live an entire lifetime without knowing about domicile as a legal term. We go about life, renting or owning a home or apartment, plus having a contract with a utility company, or cell phone service, and little do we know that through this combination of actions we automatically gain domicile. Having that status automatically opens the door to a normally functioning life of jobs, buying groceries, paying bills, and the like. To have normalcy without having a physical home requires gaining the domicile legal status through other means.
Domicile is related to which set of laws applying to an individual. A person with domicile in locality USA, can travel to locality GB, and while they'll be subject to GB laws, they're also subject to the laws of locality USA because that's where they have domicile. To demonstrate their status with locality USA, the person carries a passport, from which locality GB can determine whether to allow entry to the person. This person, traveling in another country, does not lose his/her legal status with locality USA. For certain issues, that person is subject to locality USA laws, as well as the laws of the country where s/he is located.
In the USA, someone with citizenship with the USA is an American citizen, but their domicile might be in Kentucky.
A person can have only one domicile at a time. It is their legal anchor in the world. Ones domicile is the place to which they intend to return after a trip. Domicile is also connected to financial ties anchoring a person to their specific place in the world.
Residency, on the other hand, is where a person resides, and can change from week to week. The factors just described for domicile do not apply to ones residence.
For example, an American with USA citizenship, domiciled in South Dakota, could travel to France, establish a residency permit in France, and still have their South Dakota domicile.
Establishing domicile in the USA when lacking a physical address
A full time traveler does not have domicile when they do not own or rent a home or apartment in any locality anywhere. They do not have utility bills, nor can they demonstrate an intention to return to any given location. They cannot get a drivers license or ID card, and will find it difficult to set up or maintain bank accounts, credit cards, phone service, or the like.
What can such people do?
Three states in the USA have lax requirements for establishing domicile: South Dakota, Florida, and Texas. Nevada is also sometimes named as having lax requirements.
We have set up this status in South Dakota. The following is based on our experiences.
Establishing domicile in South Dakota as a full time traveler
The South Dakota Department of Public Safety website has a page listing
drivers license requirements for full-time travelers. This page describes how one gets a drivers license (or ID card), and the result of taking those steps grants domicile in South Dakota, according to my non-lawyerly opinion.
The identity requirements include:
- Establishing identity using a passport, or naturalization card, or the like
- Prove your social security number
- For full time travelers, prove:
- An overnight stay in South Dakota
- At least one piece of mail showing a personal mailbox address (PMB) at an approved mail fowarding service in South Dakota
- Complete the residency affidavit
This is similar to the California requirements described earlier, but for one thing. In California, and most other states, your address must be a regular permanent physical address, and must not be a PO Box or PMB. In South Dakota, the physical address can be a hotel where you stayed overnight, and they allow use of a PMB from an approved service.
To implement these requirements required several preparatory steps, listed here, which required a couple months.
- Establishing an account with a mail forwarding service that is recognized by South Dakota. This gives you a physical address. (see below)
- Establish a cell phone number in South Dakota. See Using USA regular phone numbers while traveling abroad
- Configuring all your financial institutions (banks, investment brokerages, credit cards, loans) to use the new address and new cell phone number.
- Wait for enough time to receive new statements from those institutions, at the mailbox service. Ensure your PMB address is correctly shown on these statements. This can take 1-2 months. You're required to show at least one such statement at the DPS office.
- Pack up your worldly belongings in your current residence, and put them in storage or sell them. We used the U-Haul UBox service because of the ease of delivering everything to a new address elsewhere.
- File a Change of Address with the US Postal Service from your current residence to the mail forwarding service.
- Change or cancel health insurance plans.
- Move out of your current residence, handing it back to the landlord or selling it. It's required by South Dakota that you not have any rented or owned home or apartment anywhere. You're becoming a full time traveler, and are not moving from one location to another.
- Travel to South Dakota, staying overnight in a hotel. It is required to get a receipt from the hotel giving your address as the hotel. Most hotels in South Dakota know about this and will do it correctly. It can help to call the hotel ahead of time to make sure they can accommodate this request.
- Go to the DPS office and be prepared to spend a few hours filling out forms and other legal stuff required to get a drivers license or ID card. You will be required to surrender your current card. The DPS recommends making an appointment, but in my experience simply showing up is sufficient.
- If you have a vehicle to register in South Dakota, find the Department of Revenue office to
reregister your vehicle(s) in South Dakota.
- Register to vote in South Dakota.
In summary, you must accomplish two things - Ending your legal/financial relationship with your previous residency state - Starting a complete legal/financial relationship with South Dakota.
It is best to make this a complete switch. What if a government agency decides to audit you? Any tie you've maintained with your old state could call into question your motivation or commitment.
I completely ended financial and legal ties with California, while establishing equivalent ones in South Dakota. I even sold my car and bicycles before handing the house to the landlord. My only significant remaining tie to California is a cell phone number. I canceled health insurance, car insurance, and changed every bank, investment brokerage, loan program, and credit card, over to the address in South Dakota.
South Dakota requires signing an affidavit with the following statements:
By signing this affidavit, I agree the below statements are true and correct to the best of my knowledge:
- I am a South Dakota resident, and I live in a RV/camper/hotel, or I travel full time for work.
- South Dakota is my state of residence, and I will return after being absent.
- I do not stay, live in, or maintain a residence in any another state.
- My personal mailbox service (PMB) is a mail forwarding service, and not a virtual only mail service.
Lying on this affidavit is subject to perjury (2 years jail time). It affirms that you've ended your previous residency, do not have a fixed address, and that your legal address is the mailbox leased from the mail forwarding service.
The requirements for Florida and Texas are similar. Since I have no experience with those states, I cannot advise what to do.
Does the South Dakota full time traveler program grant domicile?
Recall that domicile is a combination of a physical location, an intent to return to that location, and financial ties demonstrating your commitment.
I am not a lawyer, but South Dakota's requirements look like domicile. They require having bank accounts and phone numbers based in South Dakota, and to sign an affidavit saying you will return to South Dakota after being absent. Those are the characteristics of domicile.
Mail forwarding services versus Virtual Mail
Look back at the requirements in South Dakota. You must have an address with a mail forwarding provider, not a virtual mail provider, that gives you an address with a personal mailbox (PMB) number.
You may not be familiar with such services, but you've probably seen "mailbox stores" in strip malls all across the USA. Those are either virtual mail or mail forwarding services and provide one with an address containing a PMB number.
According to the US Postal Service, these businesses are Certified Mail Receiving Agencies (CMRA). As the name implies, a CMRA is certified to receive your mail and hold it for you. To sign up for service with a CMRA, the customer must fill out USPS form 1583, and to have it notarized. This form authorizes the CMRA to receive mail on behalf of the customer. This in turn requires filling out a notarized form with the mailbox provider which they send to the USPS.
A PMB address looks like this:
John Smith
4242 S. Mary Ave, PMB 12345
Anytown, MA 01234
The first part of the 2nd line is the physical address, in this case 4242 S. Mary Ave. Typically this will be a mailbox store, such as PostalAnnex or POSTNET. The portion starting with PMB is the mailbox number at the location. Therefore anyone looking up the address on a map application will see a store typically in a strip mall.
Many people use these services for safety or convenience. They can pick up their mail any time they like, automatically screen out junk mail, and have certainty that neighbors won't steal packages off their porch.
South Dakota is curiously strict about the difference between a virtual mailbox service and a mail forwarding service. It is a mystery what distinction they draw between the two.
Through repeated phone calls to the DPS I learned that South Dakota does not recognize every mailbox provider as a mail forwarding service. This means selecting a mailbox provider recognized by South Dakota, but the DPS does not publish a list of approved providers.
For example, iPostal1 and Anytime Mailbox are two nationwide mailbox providers. Most locations for either service in South Dakota are not recognized as mail forwarding services, however. The Postal Annex location in Sioux Falls on South Louise Ave provides both iPostal1 and Anytime Mailbox service, and is recognized by DPS as a mail forwarding service. Another service, Traveling Mailbox, does not operate in strip malls but is otherwise similar. There are three mail forwarding services that explicitly service South Dakota, America's Mailbox, Escapees, and Dakota Post. Each of these are recognized by DPS as mail forwarding services.
The company I chose, Traveling Mailbox, was unfortunately not recognized by DPS as a mail forwarding service. The plan nearly failed due to that. See: Getting a South Dakota full time traveler ID using Traveling Mailbox
In my case, we'd just spent a month packing our stuff into UBoxes, handing the house back to the landlord, selling my car and bicycles, disposing of lots of stuff, made lots of legal arrangements, then traveled to South Dakota to be told by the DPS agent that the mailbox service I'd chosen was a virtual mailbox provider rather than a mail forwarding provider, and because of that they were denying my application to get a full time travelers card. We had tickets for a flight to Europe leaving in a couple days, and had given ourselves 2-3 days in Sioux Falls. While I managed to work it out, this could have gone south very badly.
Try to avoid that situation. Carefully choose a mailbox provider which the DPS recognizes as a mail forwarding service.
Is a full time travelers drivers license any different from regular drivers licenses?
No. The South Dakota drivers license I received is just like any other drivers license. The address shown on my license is for the Traveling Mailbox location in Sioux Falls. It has all the digital identity markings on the back, all the security features, and even includes Real ID features.
Filing USA taxes with the IRS while not having a physical residence in the USA
The IRS form 1040 has a space where you must enter your physical residence address. It says that PO Box addresses are not allowed. But, the instructions allow a PO Box address to be used if you have no other address to receive mail.
My situation is as a full time traveler with a PMB address. I've now used that address twice in filing taxes. So far the IRS and the California Franchise Tax Board accepted that address and has not said anything.
Why a bank might not accept a PMB address and threaten to cancel your account
It turns out that when you change your address to your PMB address, and your bank accepts that change of address, that might not be the end of the story.
Banks do not make a distinction between POB and PMB addresses. For example, Ally Bank explicitly prohibits accounts with either a PO Box address, or what it called a "maildrop account" which is a rather condescending description of a PMB address.
Financial institutions have Know Your Customer (KYC) requirements, which is where the requirement for a physical address comes from. These requirements come from The Patriot Act - that law Congress passed in a rush immediately after the Sept. 11, 2001 attack - as well as anti-money-laundering regulations. Bottom line is that financial institutions require knowing your physical address, that a mailing address is not good enough, and neither are PO Box or PMB addresses acceptable.
A
Reddit discussion thread goes over the risk that banks will do KYC Reviews. Many people on that thread gave an experience like mine - that they had an existing account with a financial institution, changed the address to a PMB address, and it seemed fine until it wasn't.
In my case I received a letter requiring that I call the bank. It's called a "KYC Review", meaning the bank might be triggered by some activity that causes a review of your account. The bank might then realize it do not have enough information about you, or it might be concerned about your PMB address.
The KYC Review might involve a phone call. Because I use "WiFi Calling" while traveling (Using USA regular phone numbers while traveling abroad), I can place a USA phone call using a USA phone number even from 10,000 miles away. It's good not just for calling your mom, but for appearing to your bank as if you're actually in the USA.
But, the serious issue is that the financial institution might balk during the KYC review over the PMB address.
In my KYC review, I pointed out that the PMB address is what's printed on my South Dakota drivers license. South Dakota see's that PMB address as my residence. Initially, the bank took that explanation, but a few weeks later they contacted me again this time insisting that the PMB address was unacceptable.
I ended up asking my brother to let me use his house address with the bank. That works and I could keep the account. But, what about the people who cannot find such an address to use?
Financial institutions that are likely to accept PMB addresses
We see in the Reddit thread linked earlier folks recommending certain banks as being friendly to using PMB addresses or supporting people living abroad. In the following sections we'll analyze some of those recommendations.
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Wise (did not mention Revolut)
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State Department Federal Credit Union (SDFCU)
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Charles Schwab
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Interactive Brokers (IB) - An investment service, or brokerage,
Using Wise (or Revolut) as a US Citizen living abroad
Wise is formerly known as Transferwise. I have a Wise account, and it is extremely useful for retrieving money from my USA bank and converting it to local currency at a local ATM or Point of Sale. Another service, Revolut, is extremely similar to Wise and should work equally well. It is an excellent service for exchanging money between different currencies at a low cost.
The core service is holding money in several currencies and low-cost currency exchange with complete a transparent fee structure. You can easily/quickly exchanging money between a long list of currencies.
Wise offers a Debit Card for use at ATMs pretty much anywhere around the world. This card automatically does currency exchange at Wise's exchange rate/fees. That means you do not have to go to a currency exchange store which might rip you off with obtuse fees. You simply go to an ATM, withdraw in the local currency, skipping any currency exchange in the ATM.
Wise accounts can be used by individual persons, and by businesses. I own a small business, and therefore use it as my personal account and for the business.
Recently Wise started paying a high interest rate for money held in the account. That makes it an attractive place to park cash.
Wise account holders configure their account to hold currencies of interest. For example, my account is configured to hold US Dollars, Euros, and the currency of the country where I reside.
For each currency, Wise sets up electronic banking identifiers corresponding to the currency. For US Dollars that means ACH routing and account numbers, and in Europe that means IBAN numbers.
Because you have ACH or IBAN numbers, you can easily link the Wise account to regular bank accounts, and even PayPal. That enables transferring money between each as needed.
Wise is not a bank. I see it more as an adjunct to your regular bank, in that it's an excellent tool for accessing your cash while traveling abroad.
Using the State Department Federal Credit Union as a US Citizen living abroad
SDFCU is interesting because its primary clients, State Department employees, are serving all around the world. But, membership is only open to State Department employees, their families, and affiliate organizations. Which initially seems it is not useful for the general population. Except, membership is also open to members of the American Consumers Council (ACC).
The ACC seems to advocate for credit unions and financial literacy. Membership in ACC seems to be one way to qualify for many credit union, not just SDFCU. Membership requires a $15 (lifetime) fee for individuals.
ACC membership might not guarantee the ability to create an SDFCU account. On the SDFCU website it says:
American Consumer Council members may be eligible to join SDFCU. Applicants will need to choose ACC on their application when opening their account.
SDFCU, like other banks, requires a physical address. Under the requirements to join, they list possible documents including a rental or mortgage agreement, or utility bills. Those documents can only be obtained by having a regular living arrangement in a home or apartment.
Where SDFCU is of interest is that they allow folks to open an account if living abroad. Since their primary customer base is State Department employes, many of whom are living abroad, they have a clear motive to do this.
This is handled through another 3rd party organization, American Citizens Abroad (ACA). ACA is an advocacy group which lobbies US Government officials on issues faced by Americans living outside the USA. The
ACA-Members/SDFCU Account: Description and FAQs information | Washington, DC | page describes the program under which ACA helps folks to establish SDFCU accounts.
You're still required to have a physical address, albeit one in a country other than the USA.
With SDFCU you can use a foreign address to open your account as long as it is your residential address where you live.
You must first be an ACA member before proceeding to setting up an SDFCU account. As of this writing, membership costs $70/year for folks less than 65 years old.
Charles Schwab's support for US expatriates living abroad
As for Charles Schwab - The only advice I found is to convert a Schwab account into an "international brokerage account". This web page may be of assistance:
https://international.schwab.com/expatriate-essentials
It's a brokerage account, but it also contains a fully functional bank account, and a top-of-the-line debit card. Does not require a US address, but would require an address somewhere. It is covered by SPIC which has similar insurance coverage to FDIC.
Their debit card offers 0% forex fees, and refunds any ATM fees. This makes it as attractive as the Wise/Revolut debit cards for international travel, except that this is Charles Schwab meaning it is backed up by an institution that's 100x bigger (or more).
Interactive Brokers
https://www.interactivebrokers.com/ - This is a brokerage which makes it easy to invest in a wide variety of investment vehicles from many countries. They do not seem to offer banking services. The company is based in the USA and therefore falls under USA rules.
I have applied for an account using my PMB address. During the application process, a message said this address is not a recognized address. However, the process allowed me to continue using that address and complete the application. Afterward, a message was displayed saying they would review the application to decide whether I am allowed to have an account.
A couple hours later an email arrived saying:
Thank you for your application.
Based on the information provided, it appears the address given is a commercial address. Please review and update your application to ensure a valid residential address has been provided.
Your application has been reset to allow you to make the appropriate change. Please note, your application information is saved, however, you will need to click continue through each page, making changes where necessary until you reach the end.
We look forward to having you as an approved trading client.
The Traveling Mailbox location in Sioux Falls is, indeed, in a commercial building. Their system correctly identified this, and insists I as an individual person must provide a residential address.
How does a bank know whether an address is a commercial address, or a CMRA address?
You tell the bank that such-and-so is your address. How does the bank know whether or not it is a CMRA address?
My application to Interactive Brokers was filed late on a Friday night. It's unlikely any humans were around to check what I'd submitted. How did their system automatically and accurately determine my home address was at a commercial location?
A company named
Smarty has a comprehensive database of USA addresses and their characteristics. From a personal privacy standpoint it is disturbing to look at the Smarty report and see all the details they've collected. In any case, their website allows anyone to create an account (for free) and query the characteristics of an address.
For this purpose the Smarty report contains two indicators:
- Whether the address is commercial or residential
- Whether the address is a CMRA
If either or both are true it is not a regular residence address.
This means anyone can test whether a given CMRA provider is likely to trigger a KYC review. Sign up with Smarty, and query the address you'd be using.
All CMRA's I've studied list their service locations on their website. For example, iPostal1 has this address in Louisville KY, 6844 Bardstown Rd, Louisville, KY 40291, as one of its service locations. Hence, in Smarty you could enter that address along with PMB 12345 to see whether a PMB address at that location will be seen as a commercial or CMRA address. Indeed, Smarty does correctly identify it as a commercial CMRA address.
Any address shown to be a commercial address and/or a CMRA is likely to trigger a KYC review from a bank. I've checked several CMRA addresses, and Smarty has not identified every CMRA location as a CMRA. Hence, some CMRA operators are currently "safe" in regard to being detectable as a CMRA operation. So far.
Opening US Bank account(s) and credit cards without being a resident nor having a social security number
A video,
How to Open a US Bank Account as a Non-Resident Without SSN (2024) is targeted at folks who aren't USA citizens, do not have USA residency, nor have a social security number, but who want to open bank accounts and credit cards in the USA. Even though this is a different target, there's enough overlap that the recommendations are useful for us.
Puerto Rico Banks -- Since Puerto Rico is part of the USA, its banks are part of the USA banking system. But, there is a huge problem in that these banks are not protected by FDIC, and therefore are not safe places to store money. Check this carefully before taking that route.
Wise (and Revolut) -- As noted earlier, these have many useful banking features such as ACH or SWIFT numbers. But, they are not banks, they are electronic money institutions, and lack things like FDIC.
What Wise says about this is that Wise functions differently from regular banks lend out your money. The bank earns its revenue by using some of your money to make investments or loans. That revenue gives the bank its profit, and whatever dividends it pays comes out of that revenue. Wise, by contrast, does not loan out your money, and always keeps it safely separated from Wise's money and that of any other Wise customer. The FDIC insurance ensures that even if a bank loses badly on its investment pool, that FDIC insurance will make sure you can retrieve your money (up to a limit). Because Wise is not lending your money, it is always available for withdrawal, no need for insurance.
But, where does the hefty dividend paid by Wise come from?
According to Wise, they use "some" customer money in government bonds. Bonds issued by large stable governments are safer than other investments. And, US Dollar funds which are receiving interest is covered by FDIC insurance.
Business bank accounts with Mercury (https://mercury.com/) or RelayFi (https://relayfi.com/). These allow folks to open accounts online with no physical presence required, and are very convenient. They only serve for business accounts, not personal accounts. Both require having a corporate entity, such as a USA Limited Liability Corporation (LLC), and an existing or planned business operation in the USA. Passports or US Government IDs for each company founder are required.
Charles Schwab International Brokerage Account is discussed earlier.
For other banks the video gives generalized instructions based on the presenters experience of opening some bank accounts.
Opening a bank account requires showing up in person to a bank branch. This will turn into one human convincing another human, the bank worker, to allow a non-resident-non-American to open a bank account. It's suggested this will have a greater chance of success in a region with a lot of immigrants, especially undocumented aliens.
As he points out (ahem) there are undocumented aliens in the USA who are opening bank accounts. Obviously some banks are open to doing this.
He claims that having a USA Address is not always required. Given the rest of the discussion in this article, I find that claim to be very strange.
CLAIM "It is completely legal for non-residents to open a bank account in the USA." This has to be referring to folks who do not have citizenship or other residency status.
CLAIM "Individual banks have different preferences based on their target customer base." This gets to his recommendation to try opening an account in a region with lots of immigrants.
CLAIM "It is up to the individual banker in the branch to approve the account or not." In other words, it is one human convincing another human that it is safe and correct to support opening the account.
For the case of a rejection due to not having a social security number, the IRS issues ITIN numbers which can serve the same purpose as an SSN.
Summary
The bottom line is that the full time traveler's can get a government-issued drivers license (or ID card) showing a PMB address from a CMRA. Two years ago I started out thinking that would be enough to go traveling in Europe. But, it turns out that address cannot be used for maintaining an account with a financial institution.
Of my three financial accounts (one bank, two brokerages), two still have my PMB address as my residence. What I've learned is it's only a matter of time before those will realize my address is not conforming with regulations. I expect each to send a KYC letter threatening to close my account.
Time is ticking for any full time traveler who currently has given a PMB address to their financial institution. It seems the financial institutions are screening their customer addresses and threatening to close accounts where the account holder cannot provide a physical address.
The only solution is to arrange with a friend or family member to use their physical address, and to use electronic document delivery. But, isn't that a lie? I'm not living in my brothers house, so why should I use his address to keep my bank account active?
What if there's actually a problem with the laws?
There are legitimate reasons, not involving money laundering or forced homelessness, in which some people do not own or rent a home or apartment. Why are such people prevented from having bank accounts and drivers licenses?
