Fidelity’s checking account is also an excellent ATM card for international cash withdrawals. This checking account reimburses ATM fees worldwide, so you can withdraw local currency for free from virtually any ATM in the U.S. or abroad, with no fees at all. Even better, it has an advantage over Charles Schwab because opening the account does not require a Hard Pull. The only inconvenience is that opening a Fidelity account can be a bit tricky for Non-Resident Alien students. If you are not careful, Fidelity may shut down the account almost immediately. I personally ended up having to open more than one account because of this. We’ll explain the right way to open the account below.
[Application Link] Apply online for a Fidelity checking account or visit a Fidelity branch
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Stock Trading Fees
Although it is called a cash management account, this account can actually be used to trade stocks and mutual funds directly. However, it does not allow margin trading or other more complex derivatives. If you need those features, you can open a separate Fidelity brokerage account.
Trading stocks in this account is also commission-free.
Advantages of the Fidelity Cash Management Account
- ATM withdrawals are fee-free at all ATMs worldwide. Any surcharge charged by the ATM operator is reimbursed with no cap. In practice, Fidelity also does not charge a Visa fee, so ATM withdrawals are completely fee-free.
- No Hard Pull when opening the account.
- The debit card supports the standard Visa network, as well as the Interlink, Plus, and Star ATM networks. It works at basically any ATM worldwide, except in North Korea and Japan.
- No monthly account maintenance fee, and there is no need to keep a minimum balance in the account.
- Free checks, Bill Pay, mobile check deposit, and other standard banking features are all included.
Disadvantages of the Fidelity Cash Management Account
- Opening the account can be somewhat complicated, especially for tax-status Non-Resident Aliens. We’ll explain in detail below.
- The cash withdrawal limit is relatively low: only $500 per day. The limit resets at midnight Eastern Time. If you are in mainland China, that means 12:00 noon during U.S. daylight saving time or 13:00 during U.S. standard time. If you are in Europe, it resets early in the morning.
- There are no branches where you can deposit cash or request a cashier's check, and Zelle transfers are not supported. So you should still keep a traditional bank account as a backup.
1% Foreign Transaction Fee?
At the bottom of the application page, Fidelity includes the following language, which appears to indicate a 1% foreign transaction fee:
Please note, there is a foreign transaction fee of one percent that is not waived, which will be included in the amount charged to your account.
Taken literally, this would seem to mean that while overseas ATM withdrawals have no cash withdrawal fee and ATM surcharges are reimbursed, you would still be charged a 1% Visa foreign transaction fee. However, based on our testing and the reports of many users online, ATM withdrawals do not incur this fee. The 1% fee applies only to purchases made abroad with the card (and you probably would not use this card for purchases anyway). So in practice, this card works the same as Charles Schwab’s debit card, and testing shows the exchange rate is identical as well.
My Account Opening Experience
Opening this account is definitely the biggest pain point. If you are a Non-Resident Alien and there happens to be a Fidelity branch nearby, I recommend opening the account in person. Bring your passport and I-94. That reduces the chance of mistakes.
If there is no branch nearby, you can still apply online. First, click the link above to start the application on the Fidelity website. You can choose whether to open a brokerage account at the same time. Then fill in your basic personal information as usual.
The key part comes here:
For nationality, select China. (If you are a U.S. citizen, you can ignore this entire section. If you select that you are a U.S. citizen, none of the complications below apply.) Then, for "Country of Tax Residence," select the United States. Of course, if you are on F1 status and are a Non-Resident Alien, the technically correct answer should be China. But if you fill it out that way, Fidelity may quietly close your account soon after opening it, and there is usually no way to fix it. So you have to fill it out this way first, and then change it back shortly afterward. If you are a Resident Alien, then the United States is the correct answer here anyway. After that, continue entering your address and other personal information, and set up your Fidelity online username and password. At the end, you will be asked to sign a W9. If you are a Non-Resident Alien, you can change it to W-8Ben immediately after opening the account, so there is no need to worry too much.
After the account is opened, look around the site a bit. If you are a Non-Resident Alien, you must click this Fidelity W-8Ben online form link and submit a W-8Ben online. Once that is done, you should be all set.
Enable Online Transfers
After opening the account, you need to fill out this form here to enable online ACH transfers, which Fidelity calls "Electronic Fund Transfer." If you are not in a rush, Fidelity will also mail this form to you together with an envelope and the debit card. You can use their prepaid return envelope to mail the form back to Fidelity for free.
Conclusion
Overall, even though opening a Fidelity account can be relatively troublesome for a Non-Resident Alien, I think it is still worth it compared with paying the price of a Hard Pull to open a Charles Schwab account. That said, several of the steps can take a while, so you will need some patience. Try not to wait until right before a trip to apply, or you may end up very short on time.
Do you have a Fidelity Cash Management account? Share your experience using it for international ATM withdrawals!