Worried About the Future of the Dollar? Bank in Ireland

I just opened a bank account in Ireland… and it’s likely you can, too.

That’s great news for anyone who wants to protect their wealth by storing some of it overseas in a stable, reputable European country.

As Americans, opening a foreign bank account can be as difficult as spotting a Leprechaun riding a unicorn.

These days, banks and brokerage firms in most overseas countries quickly shoo away would-be American clients. They want nothing to do with us because of onerous rules that Uncle Sam imposes on foreign financial institutions.

Those rules are known as the Foreign Account Tax Compliance Act, or FATCA.

This bedeviling piece of legislation from the early Obama years mandates that any financial institution anywhere in the world that caters to an American client must divulge the name and tax ID number of that American to the IRS. If they refuse, the U.S. can levy penalties against that institution or even cut them off from the dollar-based global financial system.

Clearly, that’s a big stick to wield.

Most of the world’s trade occurs in greenbacks, so foreign banks need access to dollars to manage their operations. Without it, they cannot service local businesses that have to convert local money into dollars to buy goods and commodities elsewhere in the world.

So, rather than risk running afoul of the U.S., most foreign financial institutions simply find it easier to tell American account-seekers to take a hike.

I say “most” because overseas banks will almost always welcome an American client who lives locally and can prove it. Since I live full time in Prague and have a longterm residence visa for the Czech Republic, I can walk into any local bank and open an account—as I’ve done with two Czech banks—without an iota of problem.

But I can’t just walk into a bank in, say, Italy or Finland or wherever and do the same with my U.S. passport unless I can prove I live locally.

All of which is why my new Irish bank account is so joyfully surprising to me…

Why Would You Want an Account in Ireland?

My personal reasons for pursuing an Irish account are somewhat goofy: I want to get a new smartphone to replace my aging, cracked, physically abused iPhone X from 2018.

I got my current phone through a pay-as-you-go plan with an Irish telecom company.

You see, Ireland was my first stop for a month or so when I moved to Europe in 2018, and I’ve kept my Irish mobile plan because for €20 ($22) a month I get unlimited data when I’m in Ireland, and a ton of data elsewhere in Europe, including the Czech Republic. That’s an all-around better deal than I can find in Prague.

To upgrade my phone, however, I need to transition to a bill-pay plan, and that demands an Irish bank account.

Frankly, I was expecting Irish banks to politely tell me to get lost. I’ve grown accustomed to that in this age of FATCA.

So, I was shocked when all three Irish banks I approached said, “Sure thing! We can open an account for you.”

Now, while my reason for seeking an Irish bank account is admittedly unusual, the fact I can open an account in Ireland is cause for a small celebration among Americans. It means you too can likely open an account at an Irish bank.

And the reason you might want to, is to diversify your financial exposure.

When you live, bank, and invest solely in America—when your paycheck, savings, life insurance, and investment and retirement plans are all held exclusively in dollars and in the U.S.—you assume a level of financial and monetary risk.

For all its power, and for all the strength of the dollar and U.S. Treasury debt, America is not a risk-free financial environment.

As we saw this past spring, the U.S. banking industry is more frail than many of us might want to believe.

Several banks failed in March, including Silicon Valley Bank and Signature Bank, and First Republic in April. Some reporting has found that nearly 200 other banks suffer from weak balance sheets. Even investment demigod Warren Buffett has begun warning about the U.S. banking industry, telling CNBC that “we’re not over bank failures.”

In a crisis, do you really want to have all your money locked into the U.S. financial system?

Beyond immediate banking concerns, the U.S government faces an increasing likelihood that it will have to confront its debt demons.

Uncle Sam owes $31.7 trillion, up from just $5.6 trillion in 2000. That’s an unfathomably vast mountain of debt—130% the size of the U.S. economy, and more than a third the size of the entire world’s economy—and it’s growing every year.

The U.S. is now paying more in interest payments on its debt than ever before. And those payments are only going to rise because interest rates have jumped sharply over the past year or so from 0.25% to 5% (the fastest increase in percentage terms in U.S. history).

It’s entirely possible, if not likely, that the U.S. will face a debt crisis sometime this decade that slams the economy and sees the value of the dollar plummet relative to other currencies.

Then there are risks tied to the actions of the Federal Reserve, Congress, and other countries.

The U.S. federal government, businesses, consumers, and state and local economies have more debt than at any point in history—a combined $200 trillion or so. As interest rates rise, it puts each group under increasing pressure.

So, the Fed finds itself between a rock and an asphalt path to hell as it tries to battle inflation while stopping short of sending the government and American families into a debt spiral. It could easily miscalculate.

Congress, meanwhile, faces a looming fight over the debt ceiling. If that gets ugly (and that seems likely), international investors could lose confidence in the U.S., which would see demand for U.S. debt fall, which would slam the value of the dollar.

Finally, all over the world these days, countries are beginning to back away from their nearly 80-year acceptance of King Dollar as the medium of global trade.

Brazil and China are now trading directly in China’s currency, the yuan. Russia and China, along with Brazil, India, and South Africa (the so-called BRICS nations), are planning to launch a new global currency to rival the dollar. And in late March, France’s TotalEnergies and China’s national oil company completed the firstever yuan-settled trade for natural gas.

Little by little, such moves erode the value of the dollar, which in turn erodes the value of your savings and investments because it increases your cost of living.

Every time the dollar slides, the cost of buying foreign-sourced products—such as avocados from Mexico or oil from Canada—rises, too.

By having a bank account overseas that holds euro or some other non-dollar currency, you’re mitigating some of those risks.

You’re effectively diversifying your wealth. You’re operating in a different legal jurisdiction, a different central bank jurisdiction, and a different political environment. And you’re subject to the tides of a different economy.

If the dollar is trapped in a long-term decline, as I believe it is, then as it falls the other currency you own—let’s say euros—rises out of necessity. As one currency goes down, another currency must be going up by definition. So, by owning euros in Ireland, you’re putting your money on both sides of the currency seesaw.

How Do You Open an Irish Bank Account?

The process of opening an Irish bank account is a lot easier than you might think. As I noted, I contacted three Irish banks, before ultimately choosing Allied Irish Bank, or AIB as it’s known locally.

My initial mistake was walking into a branch in Waterford City, in southern Ireland, expecting I could just show my documents and open an account on the spot. Not so.

The Irish seem to like appointments. So, I had to wait until I knew I’d be back in Ireland again, which arrived in April when I was on assignment for an upcoming International Living magazine story about how you can play some of the world’s top golf courses for less. (Keep an eye out for that article in a future issue.)

I checked AIB’s website and found I could make an appointment online, which I did. A day later, Chloe from a branch in County Kildare (where I’d be traveling) emailed with timing options and a list of what I needed to bring.

The only requirements: My passport and two documents that prove my address—either a bank statement, a utility bill, or some kind of government correspondence (from a tax agency or the like). I used a recent bank statement and a letter addressed to me from the Czech state healthcare agency.

That’s all. Honestly, it was refreshing in its simplicity.

I popped into the branch at 1:50 p.m. on a Thursday, presented all my documents and filled out two very short forms—an application and a document stating that I am a U.S. citizen, and that my tax residency is the U.S. (because all Americans are tax residents of the U.S., no matter where we live), and listing my Social Security number. All that is necessary because of FATCA.

I left at 2:19 p.m. with a brand new Irish bank account.

It really was that quick and simple to open an Irish bank account as an American. And, no, you don’t have to be a resident of a European Union country, as I am. I specifically asked Chloe if an American who lives in, say, Iowa and is not an EU resident could just pop in and open an account.

“Bring your passport and two proofs of address—yes,” she told me.

So, there you have it… a path to a bank account in the European Union.

I imagine it’s far easier to complete this process in person while visiting Ireland (which should be on everyone’s bucket list anyway). But it may also be possible to sign up online.

Fair warning though: Irish banks can be inconsistent in their processes. And different banks have varying application procedures. (You can find those for AIB’s here and Bank of Ireland’s here.)

Another point to note if you are a U.S. citizen: Once you have a foreign bank account, you will have to report it to the U.S. Treasury Department annually if the account balance exceeds $10,000 at any point in the year.

That’s a simple process, though. And it’s a negligible price to pay for having legal access to an overseas bank account in a country like Ireland.