How to create joint foreign currency account in Israel between US/Israeli citizens

Question

I live in the U.S. (American citizen) and my son in Israel (Israeli citizen).

I want to know if it's possible to open a joint foreign currency account which would permit me to lend him money and later to use the account for him to pay me back. A second reason is because some checks have surfaced which are meant for my son. After we get them reissued, it would simplify matters a lot if I could simply deposit them into a joint account on his behalf.

If that's not an option, can someone suggest an alternative which doesn't cost a lot in fees and keeps the money until it's needed in USDollars -- to hedge against inflation.

Thank you for any suggestions you are able to offer.

Answer 1

There's no need for joint accounts to transfer money between you. You can always transfer money to him in Israel to his Israeli account.

Having joint account will pose a couple of issues.

If the account is in Israel - you will be liable for FBAR/FATCA reports. If the account is in the US - your son will be liable for similar reports in Israel.

Joint account also means there's an ambiguity about what belongs to whom and is transferred in what direction. You'll have issues with gift tax reporting/liabilities.

Your son can open a USD account in Israel and you can wire money there or send him checks (that would take longer). Or, you can wire money directly to his ILS account.

Answer 2

I'm pretty sure that the banks here will only allow a joint account with either all citizens or all "foreign resident" or tourists. You may be able to do something with Leumi since they have a US branch in NYC.

What many people do (who are US citizens) is open a bank account either at a physical branch or online and then it can be managed all online. Make sure no monthly balance fees or atm fees etc.

If you need to transfer money most banks will "buy" a US check (I have done this with Leumi) or you can go to the ATM and pull out a few thousand shekel from the USA account and deposit it right back into the Israeli account.

My wife and I did this when we first arrived. Discount Bank seemed to have no fees for pulling money out and a good USD/ILS rate. Just make sure you don't have foreign transaction fees / high rates on the US account.

If you need to deposit checks for him you can use the remote deposit feature and just take a picture.

בהצלחה!