USD salary payroll

[JadenQ]

Best bank account for USD salary payroll?

Hi all, due to the current COVID-19 situation, I am expecting to receive USD salary payroll into an SG bank account. As this is a temporary situation since I was supposed to relocate for my job in the US, I am looking for a SG bank account to hold USD as I will want the USD for when I eventually relocate (likely 6 months - 1 year down the road, depending on the COVID situation), and I do not need to convert the USD to SGD for the time being.

I have looked around a number of multi-currency accounts/USD savings/USD checking accounts, but still not too sure on which one is the best to go for. The main things I am concerned with are the inward and outward remittance fees (outward because I do eventually plan to move the USD to an actual US bank account when I relocate/IBKR for investing) and any interest rates that the account may have is a bonus.

Would appreciate any advise or recommendations from those who are familiar with this. Thanks!

 

[reddevil0728]

Dbs multiplier account

 

[JadenQ]

Dbs multiplier account

Any particular reasons why? I read up on DBS My Account, Multi-currency account and multiplier account but it was hard to find the differences (for my use case) and the reasons to pick one over the other.

Would help if you could provide more details, thanks!

 

[reddevil0728]

Any particular reasons why? I read up on DBS My Account, Multi-currency account and multiplier account but it was hard to find the differences (for my use case) and the reasons to pick one over the other.

Would help if you could provide more details, thanks!

If you have SGD you get higher interest.

Btw did you also check whether your income is taxable in Singapore based on your arrangement with your new employer?

 

[JadenQ]

If you have SGD you get higher interest.

Btw did you also check whether your income is taxable in Singapore based on your arrangement with your new employer?

Oic, do I get higher interest on the SGD or USD?

I have not checked whether the income is taxable in Singapore yet, but have a consult set up with a company tax advisor for some time next week. However, based on this guidance from IRAS (https://www.iras.gov.sg/irashome/CO...nd-Tax-Guidance/Tax-Guidance/For-Individuals/) it should not be taxable in Singapore until 30 Sept 2020 at least.

 

[reddevil0728]

Oic, do I get higher interest on the SGD or USD?

I have not checked whether the income is taxable in Singapore yet, but have a consult set up with a company tax advisor for some time next week. However, based on this guidance from IRAS (https://www.iras.gov.sg/irashome/CO...nd-Tax-Guidance/Tax-Guidance/For-Individuals/) it should not be taxable in Singapore until 30 Sept 2020 at least.

SGD............

 

[BBCWatcher]

Dbs multiplier account

DBS is likely going to charge inward telegraphic transfer fees (S$10 per inbound transfer), and that's not desirable. That's really too bad since they're quite good now in most other respects.

How about Citibank Singapore? If you already have some sort of relationship with Citibank, they could work pretty decently. (If not, it's a little harder as you'll see.) Citibank Singapore doesn't charge any inward telegraphic transfer fees, and they offer a U.S. dollar checking account with a minimum US$5,000 to open. Also, you must have a "Total Relationship Balance" of S$15,000 to avoid a fee. Those limits are a little steep, to be sure. And there's no interest on the account. (A common problem these days.)

However, once you land in the United States, IF you're in an area of the country where you can open a Citibank account then you can transfer those U.S. dollars free of charge from Citibank Singapore to Citibank U.S. via Citibank Global Transfer. Frankly Citibank U.S. is really not a good value otherwise, so this isn't the sort of U.S. bank account you'll want to keep for very long. There are much better deals available. But for fund transfer purposes to the U.S., Citibank is decent. The daily limit on Citibank Global Transfers is S$65,000 (the U.S. dollar equivalent in this case). Then you just have to make sure you tidy up both sides in timely fashion to avoid fees.

Another possible approach is a TransferWise Borderless Account. That's free to open with no minimum required. No interest paid again. You get a U.S. ACH routing number and account number to receive payments, so that's quite convenient for a U.S. employer. (Caution, though: the ACH doesn't seem to work with every U.S. bank or U.S. credit union. If your employer struggles with this, you'll likely have to switch to "Plan B.") When it's time to move the funds to your new U.S. bank or U.S. credit union account you can do that for a flat US$1.40 fee per transfer, it looks like. TransferWise's limit is US$1 million per transfer. There's an optional debit card you can get for S$10, and it's pretty decent.

Another caution is that U.S. dollar deposits at any of these institutions in Singapore (or in the U.K. in TransferWise's case since they're based there) are NOT protected by any deposit insurance. It won't be until your funds land in a U.S. bank or U.S. credit union account that they'll be FDIC insured.

Here's a speculative option: your U.S. employer might be affiliated with a U.S. credit union. If so, contact the U.S. credit union directly, explain the COVID-19 challenges, and ask if they can open an account for receiving payroll deposits from the affiliated employer. (They might want to contact your U.S. manager, for example.) You'll probably want your credit union account to be a savings or money market account -- something earning a bit of interest -- since it won't be transactional in nature yet. (Although if the account comes with a zero foreign transaction fee Mastercard or Visa debit card, that's great. Just bear in mind that unless it's a checking account you'll be limited to 6 withdrawals per calendar month, including debit card payments.) If they need to impose some reasonable restrictions on the account pending your arrival, that's probably fine. You might want to ask them also to open the account as a "Payable on Death" (POD) account if they offer that, meaning that you can specify a beneficiary (such as a spouse, sibling, etc.) to receive the funds in the event you should predecease the beneficiary. POD accounts are quite common in the U.S. albeit not universal.

 

[BBCWatcher]

I have not checked whether the income is taxable in Singapore yet, but have a consult set up with a company tax advisor for some time next week. However, based on this guidance from IRAS (https://www.iras.gov.sg/irashome/CO...nd-Tax-Guidance/Tax-Guidance/For-Individuals/) it should not be taxable in Singapore until 30 Sept 2020 at least.

No, I disagree with your interpretation (assuming you're a Singaporean citizen or Permanent Resident). You haven't started your employment physically in the U.S. yet, so you haven't returned from that job in the U.S. The tax waiver you're linking to relates to situations when you HAVE started work in the U.S. (or elsewhere overseas), you returned to Singapore (for a vacation here, as an example), you got stuck, and you continued working remotely for that same overseas employer.

 

[Garlic & Butter]

SCB will be good. presently no FX and TT fees. DBS/POSB lets you TT out with no svc charge, only spread

most banks charge S$10 incoming TT fee

 

[cscs3]

Oic, do I get higher interest on the SGD or USD?

I have not checked whether the income is taxable in Singapore yet, but have a consult set up with a company tax advisor for some time next week. However, based on this guidance from IRAS (https://www.iras.gov.sg/irashome/CO...nd-Tax-Guidance/Tax-Guidance/For-Individuals/) it should not be taxable in Singapore until 30 Sept 2020 at least.

1. USD interest rate higher.
2. Taxable in USA if employment contract is USA based.

 

[JadenQ]

DBS is likely going to charge inward telegraphic transfer fees (S$10 per inbound transfer), and that's not desirable. That's really too bad since they're quite good now in most other respects.

Yup, I have clarified with DBS and this is indeed the case.

How about Citibank Singapore? If you already have some sort of relationship with Citibank, they could work pretty decently. (If not, it's a little harder as you'll see.) Citibank Singapore doesn't charge any inward telegraphic transfer fees, and they offer a U.S. dollar checking account with a minimum US$5,000 to open. Also, you must have a "Total Relationship Balance" of S$15,000 to avoid a fee. Those limits are a little steep, to be sure. And there's no interest on the account. (A common problem these days.)

However, once you land in the United States, IF you're in an area of the country where you can open a Citibank account then you can transfer those U.S. dollars free of charge from Citibank Singapore to Citibank U.S. via Citibank Global Transfer. Frankly Citibank U.S. is really not a good value otherwise, so this isn't the sort of U.S. bank account you'll want to keep for very long. There are much better deals available. But for fund transfer purposes to the U.S., Citibank is decent. The daily limit on Citibank Global Transfers is S$65,000 (the U.S. dollar equivalent in this case). Then you just have to make sure you tidy up both sides in timely fashion to avoid fees.

That's quite a good idea. I do have an existing relationship with Citibank (Maxigain account which I plan to move funds out of eventually since their interest rates have become terrible). I am not currently holding any USD at the moment, what would you recommend be the best way to convert SGD to US$5000?

Another possible approach is a TransferWise Borderless Account. That's free to open with no minimum required. No interest paid again. You get a U.S. ACH routing number and account number to receive payments, so that's quite convenient for a U.S. employer. (Caution, though: the ACH doesn't seem to work with every U.S. bank or U.S. credit union. If your employer struggles with this, you'll likely have to switch to "Plan B.") When it's time to move the funds to your new U.S. bank or U.S. credit union account you can do that for a flat US$1.40 fee per transfer, it looks like. TransferWise's limit is US$1 million per transfer. There's an optional debit card you can get for S$10, and it's pretty decent.

Another caution is that U.S. dollar deposits at any of these institutions in Singapore (or in the U.K. in TransferWise's case since they're based there) are NOT protected by any deposit insurance. It won't be until your funds land in a U.S. bank or U.S. credit union account that they'll be FDIC insured.

Here's a speculative option: your U.S. employer might be affiliated with a U.S. credit union. If so, contact the U.S. credit union directly, explain the COVID-19 challenges, and ask if they can open an account for receiving payroll deposits from the affiliated employer. (They might want to contact your U.S. manager, for example.) You'll probably want your credit union account to be a savings or money market account -- something earning a bit of interest -- since it won't be transactional in nature yet. (Although if the account comes with a zero foreign transaction fee Mastercard or Visa debit card, that's great. Just bear in mind that unless it's a checking account you'll be limited to 6 withdrawals per calendar month, including debit card payments.) If they need to impose some reasonable restrictions on the account pending your arrival, that's probably fine. You might want to ask them also to open the account as a "Payable on Death" (POD) account if they offer that, meaning that you can specify a beneficiary (such as a spouse, sibling, etc.) to receive the funds in the event you should predecease the beneficiary. POD accounts are quite common in the U.S. albeit not universal.

Some good alternatives here but since I have an existing Citibank Maxigain account it seems like Citibank is the easiest route to go with. Will definitely explore these other options for international transfer in the future though.

No, I disagree with your interpretation (assuming you're a Singaporean citizen or Permanent Resident). You haven't started your employment physically in the U.S. yet, so you haven't returned from that job in the U.S. The tax waiver you're linking to relates to situations when you HAVE started work in the U.S. (or elsewhere overseas), you returned to Singapore (for a vacation here, as an example), you got stuck, and you continued working remotely for that same overseas employer.

Ah I see. I was not entirely sure if my scenario was applicable, but thanks for clarifying. I'll still bring it up with my company tax advisor to get confirmation. In the case whereby this IRAS guidance is not applicable, will I then be subjected to both the US and SG income tax? I'm fine with paying either country's income tax but as far as possible do not want to pay both.

 

[Twinsen]

I received USD for my pay for almost 5 years in a previous job.

All local banks will charge a incoming fee (Usually $10).
You can try to look at some foreign banks. CIMB doesn't charge me a fee for Aussie dollar coming in.
But frankly, you should try and ask your company to bear this as your pay is X and not X minus fees. And companies are used to paying fees...

After that, the main qn is do you plan to convert your USD to SGD or hold USD or half half etc?

If you plan to convert to SGD, you should do so almost immediately as USD is still pretty high now.

If you plan to hold USD, for 6 months to 1 year, find a bank that give you the best USD FD. I still have USD with CIMB as they give a decent of close to 1% interest for 3 months FD (previously). Else you leave your USD in any multi-currency, will be like 0.05% kind...

 

[JadenQ]

SCB will be good. presently no FX and TT fees. DBS/POSB lets you TT out with no svc charge, only spread

most banks charge S$10 incoming TT fee

I have checked with SCB, both their USD$aver and USD High accounts do have S$10 inward telegraphic fees. Do you have a link to information that states otherwise? I don't think I'm concerned with FX/spread fees since I am keeping USD all the way until I relocate to US right?

Yup DBS does allow TT out with no charges, only annoying thing is the inward telegraphic fees of S$10.

 

[JadenQ]

1. USD interest rate higher.
2. Taxable in USA if employment contract is USA based.

1. Hm there was some conflicting information from an earlier post stating that interest rate on my SGD will be higher, not USD. Do you have any link for confirmation? Else I will double check with DBS.

2. Will I end up in a scenario of paying double income tax? SG and US?

 

[BBCWatcher]

That's quite a good idea. I do have an existing relationship with Citibank (Maxigain account which I plan to move funds out of eventually since their interest rates have become terrible). I am not currently holding any USD at the moment, what would you recommend be the best way to convert SGD to US$5000?

That’s the tricky part. I would ask Citibank if they can still open the account for you if you can get it funded within 30 days (for example) without penalty. That’ll allow you to get some combination of your employer’s deposit and/or, for example, a U.S. dollar wire deposit from Interactive Brokers to hit the US$5,000 minimum. If you have some status with Citibank they might even waive the initial deposit requirement completely.

I like the U.S. credit union idea better if you can pull that off.

In the case whereby this IRAS guidance is not applicable, will I then be subjected to both the US and SG income tax? I'm fine with paying either country's income tax but as far as possible do not want to pay both.

I don’t think so. I’m not sure why the other poster suggested you would be subject to U.S. income or payroll tax yet for work you’re performing in Singapore and prior to any U.S. personhood. (I’d like to understand that argument.) Note that you will have CPF contributions to make, minimally MediSave.

If for some strange reason your employer withholds U.S. taxes you should (a) correct that, and (b) claw back any overwithholding by filing a tax return (IRS Form 1040NR) early next year.

Bear in mind that Singapore’s income taxes are paid in arrears, preferably via GIRO since that stretches out the payments on an interest free basis. So when you do start work in the U.S. you’ll have U.S. taxes withheld from your paychecks AND be paying some Singapore income tax from your past work in Singapore. But that won’t be tax on the same work. It’s just a cashflow quirk.

In terms of compensation levels, if you’re getting well compensated in a way that reflects U.S. tax rates, congratulations, your after tax compensation will be that much higher while you’re still stuck in Singapore. (IRAS’s tax rates are lower.) However, you might not be able to participate in your employer’s 401(k) plan yet — not sure about that, but I think that’s right. Any Employee Stock Purchase Plan should be open to you (and worth doing if it’s a reasonable company and you get a discount), but bear in mind you’ll pay 30% dividend withholding tax and those shares are U.S. estate taxable. So you’ll probably want to sell shares as they vest (as they become “qualified”).

There’s much more that could be said about the U.S. tax system, but one step at a time.

 

[bright_84]

That’s the tricky part. I would ask Citibank if they can still open the account for you if you can get it funded within 30 days (for example) without penalty. That’ll allow you to get some combination of your employer’s deposit and/or, for example, a U.S. dollar wire deposit from Interactive Brokers to hit the US$5,000 minimum. If you have some status with Citibank they might even waive the initial deposit requirement completely.

I like the U.S. credit union idea better if you can pull that off.


I don’t think so. I’m not sure why the other poster suggested you would be subject to U.S. income or payroll tax yet for work you’re performing in Singapore and prior to any U.S. personhood. (I’d like to understand that argument.) Note that you will have CPF contributions to make, minimally MediSave.

If for some strange reason your employer withholds U.S. taxes you should (a) correct that, and (b) claw back any overwithholding by filing a tax return (IRS Form 1040NR) early next year.

Bear in mind that Singapore’s income taxes are paid in arrears, preferably via GIRO since that stretches out the payments on an interest free basis. So when you do start work in the U.S. you’ll have U.S. taxes withheld from your paychecks AND be paying some Singapore income tax from your past work in Singapore. But that won’t be tax on the same work. It’s just a cashflow quirk.

In terms of compensation levels, if you’re getting well compensated in a way that reflects U.S. tax rates, congratulations, your after tax compensation will be that much higher while you’re still stuck in Singapore. (IRAS’s tax rates are lower.) However, you might not be able to participate in your employer’s 401(k) plan yet — not sure about that, but I think that’s right. Any Employee Stock Purchase Plan should be open to you (and worth doing if it’s a reasonable company and you get a discount), but bear in mind you’ll pay 30% dividend withholding tax and those shares are U.S. estate taxable. So you’ll probably want to sell shares as they vest (as they become “qualified”).

There’s much more that could be said about the U.S. tax system, but one step at a time.

Agreed. In any case if you're double taxes, just apply for unilateral tax credit.

 

[celtosaxon]

I’ve been monitoring Citibank in the US and they have been getting more competitive with their accounts. Last November they introduced this new Elevate account that will reimburse all out-of-network ATM fees on an unlimited basis.

https://www.citigroup.com/citi/news/2019/191119a.htm

 

[BBCWatcher]

I’ve been monitoring Citibank in the US and they have been getting more competitive with their accounts.

That's damning them with faint praise.

Last November they introduced this new Elevate account that will reimburse all out-of-network ATM fees on an unlimited basis.
https://www.citigroup.com/citi/news/2019/191119a.htm

But note the major caveats. That particular account isn't offered nationwide. It's only offered in areas where Citibank doesn't have branches. Also, that account's minimum balance requirement is US$5,000 to avoid a stiff US$15 monthly fee. And the interest wasn't terrific when it was introduced, and I'm sure it's even less terrific now.

Fortunately you don't have to keep a Citibank U.S. account for these purposes (Citibank Global Transfer) very long if it isn't a keeper.

 

[JadenQ]

That’s the tricky part. I would ask Citibank if they can still open the account for you if you can get it funded within 30 days (for example) without penalty. That’ll allow you to get some combination of your employer’s deposit and/or, for example, a U.S. dollar wire deposit from Interactive Brokers to hit the US$5,000 minimum. If you have some status with Citibank they might even waive the initial deposit requirement completely.

I like the U.S. credit union idea better if you can pull that off.

Actually funding it isnt a huge problem for me, but I was concerned with the FX spread/charges since I'm only holding SGD now. I suppose from what you're saying the best way is to convert SGD to USD via Interactive Brokers for the lowest spreads then wire into the Citibank USD account? I'll definitely see if I can get a delay or waiver for the initial deposit requirement as well.

What makes the US credit union idea better? I'm actually pretty unsure of how I should even go about finding out my employer's credit union and how to contact them directly. Would definitely prefer to go with the simpler and hassle free methods.

Another question on bank accounts, if I go with DBS and I am able to get my employer to pay for the S$10 inward telegraphic fees, would that be a better option than Citibank? As far as I have clarified, DBS does not have any fees for outward TT which means I can freely transfer out to a US bank account/IBKR when needed.

In terms of compensation levels, if you’re getting well compensated in a way that reflects U.S. tax rates, congratulations, your after tax compensation will be that much higher while you’re still stuck in Singapore. (IRAS’s tax rates are lower.) However, you might not be able to participate in your employer’s 401(k) plan yet — not sure about that, but I think that’s right. Any Employee Stock Purchase Plan should be open to you (and worth doing if it’s a reasonable company and you get a discount), but bear in mind you’ll pay 30% dividend withholding tax and those shares are U.S. estate taxable. So you’ll probably want to sell shares as they vest (as they become “qualified”).

There’s much more that could be said about the U.S. tax system, but one step at a time.

Good thing you brought up the issue on stocks. My employment entitles me to Restricted Stock Units (RSUs), not quite exactly stock options. Are they also liable for taxes in the same way as stock options? I understood the 30% dividend withholding tax, but I didn't quite understand what is meant by US estate taxable. The only thing I could find regarding estate tax is a tax on the transfer of the estate of a deceased person.

 

[celtosaxon]

Actually funding it isnt a huge problem for me, but I was concerned with the FX spread/charges since I'm only holding SGD now. I suppose from what you're saying the best way is to convert SGD to USD via Interactive Brokers for the lowest spreads then wire into the Citibank USD account? I'll definitely see if I can get a delay or waiver for the initial deposit requirement as well.

What makes the US credit union idea better? I'm actually pretty unsure of how I should even go about finding out my employer's credit union and how to contact them directly.

Would definitely prefer to go with the simpler and hassle free methods.

Another question on bank accounts, if I go with DBS and I am able to get my employer to pay for the S$10 inward telegraphic fees, would that be a better option than Citibank? As far as I have clarified, DBS does not have any fees for outward TT which means I can freely transfer out to a US bank account/IBKR when needed.

If you want easy and hassle free, I would just go with whatever banking facilities you’ve already got. Unless you are exchanging a lot of SGD, it may not be worth messing around setting up new facilities.

The main area you will get whacked is on the exchange rate. For DBS their board rates for USD are around 0.6% from spot. Compare that to a decent money changer which is 0.3% from spot. For Citibank, their board rate is closer to 1.2% from spot, unless you are doing at least at least a 5 figure sum - then go through their exchange desk, which will then be more like 0.5-0.6% from spot.

IBKR is as good as it gets - better than a money changer, but you’ve got to get an account set up and possibly pay a monthly fee depending on your balance with them. If you are doing larger amounts, it’ll be worth it.

If you decide to wire USD funds into US accounts, beware of inbound wire fees. Most brokerage accounts and some credit unions do not charge for inbound wires.