The Financial Checklist for Indians Moving to the US for the First Time

By AM Wealth Management | Financial Planning for Indians in America

You have your visa. You have your offer letter. You have a flight booked and a suitcase that is somehow supposed to contain your entire life.

The last thing on your mind is a financial checklist.

But here is the truth: the financial decisions you make in your first few months in the United States — and the ones you should have made before you left India — will follow you for years. Some of them are irreversible. Some of them come with penalties if you get them wrong.

This guide is for Indians arriving in the US for the first time, whether on an H-1B, L-1, O-1, or any other work visa. We have written it in plain language because the US financial system is complicated enough without jargon making it worse.

Let us start before you board the plane.

Before You Leave India

1. Understand What Happens to Your Indian Accounts

You do not need to close your Indian bank accounts when you move to the US. But you do need to understand how they change.

If you are leaving India on a work visa with the intent to stay in the US for an extended period, you are likely becoming an NRI — a Non-Resident Indian — under Indian tax law. This matters because:

• Your existing savings account should technically be converted to an NRO (Non-Resident Ordinary) account. You cannot continue operating a regular resident savings account once you become an NRI.
• Your NRE (Non-Resident External) account is designed for NRIs and is where you can park money repatriated from abroad. Interest earned in NRE accounts is tax-free in India.
• Your NRO account is for income earned in India — rent, dividends, pension. Interest in NRO accounts is taxable in India.

Talk to your bank before you leave. The conversion is straightforward, but many people do not do it and end up with compliance issues later.

2. Think Carefully About Your PPF Account

Your Public Provident Fund (PPF) account is one of the best savings instruments India has ever created — 7.1% guaranteed interest, completely tax-free in India, with a 15-year lock-in.

Once you become an NRI, you are no longer allowed to make fresh contributions to your PPF account. You can let it run until maturity and then withdraw, but you cannot extend it beyond the original 15-year period as a non-resident.

From a US tax perspective, the treatment of PPF is still somewhat unsettled, but the IRS does not formally recognize PPF as a tax-exempt retirement account the way India does. The interest may be reportable as income on your US tax return.

The key action here: Do not make a PPF contribution just before leaving if your PPF account is close to maturity or if you are uncertain about how long you will be in the US. Get proper advice before making this decision.

3. Think About Your EPF Balance

Your Employee Provident Fund (EPF) is the employer-employee retirement contribution made throughout your career in India. When you leave your job to move abroad, you have a few options:

• Withdraw it — you can do this after two months of unemployment, but there is TDS (Tax Deducted at Source) on withdrawal if your account is less than five years old.
• Leave it — your EPF continues to earn interest at 8.25% (since 2023-24). However, interest stops accruing after three years of inactivity.
• Transfer it — if you have multiple employers, consolidate through the EPFO portal before leaving.

From a US tax perspective, if you are a US tax resident when you withdraw EPF, the withdrawal may be taxable income in the US. The India-US tax treaty does not provide clear relief on EPF withdrawals for US residents, so the timing of withdrawal matters.

The key action here: Do not make hasty EPF decisions based on what a colleague did. The right answer depends on how long you plan to be in the US, your India tax residency, and the size of your balance.

4. Make a List of Every Indian Financial Account You Have

This sounds obvious, but you would be surprised how many people arrive in the US and then spend months trying to reconstruct which accounts they hold and where.

Before you leave, make a list of:

• Every bank account (account number, bank name, branch IFSC code)
• Fixed deposits
• Demat account and stock portfolio
• Mutual fund folios (check your CAMS/KFintech statements)
• PPF account
• EPF account (UAN number)
• LIC or other insurance policies with cash value
• Any property you own or co-own

You will need this list. Here is why.

The US Financial Obligation Nobody Tells You About: FBAR

This is probably the most important section of this guide, because FBAR is the thing that catches the most Indians by surprise — sometimes years after they should have been filing.

What is FBAR?

FBAR stands for Foreign Bank and Financial Accounts Report. It is not a tax form. It is a disclosure form that you file with the US Treasury Department (specifically, a division called FinCEN) to report your foreign financial accounts.

Think of it as telling the US government: "I have these accounts outside the United States."

Who Has to File?

You must file an FBAR if:

1. You are a US person for tax purposes — this includes citizens, green card holders, and people who have met the Substantial Presence Test (more on this below), and
2. The aggregate maximum balance across all your foreign financial accounts exceeded $10,000 at any point during the calendar year.

That second point is critical and widely misunderstood. It is not $10,000 per account. It is $10,000 across all your accounts combined, measured at the highest point in the year — not the year-end balance.

Example: You have three Indian accounts. Your savings account peaked at ₹2,50,000 (~$3,000) in August, your NRO account peaked at ₹4,00,000 (~$4,800) in March, and your fixed deposit was ₹2,50,000 (~$3,000) throughout the year. Combined maximum: approximately $10,800. You must file FBAR.

What Counts as a "Foreign Financial Account"?

Most Indian account types are reportable, including:

• Bank accounts — savings, current, NRE, NRO
• Fixed deposits (FDs)
• Demat accounts holding Indian stocks or mutual funds
• PPF — this is debated, but many tax professionals recommend including it
• LIC and other insurance policies with a cash surrender value
• Any account where you have signature authority — including a parent's account you help manage

EPF treatment is more nuanced — some practitioners include it, some do not, based on how the IRS treats foreign pension accounts. This is an area where professional advice matters.

When is FBAR Due?

FBAR is due on April 15 each year for the previous calendar year. If you miss this date, there is an automatic extension to October 15 — no application needed, no form to file.

Important: FBAR is filed separately from your federal tax return. It is filed electronically through the FinCEN BSA E-Filing System (bsaefiling.fincen.treas.gov), not through the IRS or your tax software.

What Are the Penalties for Not Filing?

FBAR penalties are among the harshest in the US tax code, which is why we are spending so much time on this.

• Non-willful violation (you genuinely did not know) — up to $16,536 per report (2026 figure, inflation-adjusted)
• Willful violation (you knew and chose not to file) — the greater of $165,353 or 50% of the account balance

If you have been in the US for several years and have not been filing FBAR, do not panic. There are IRS amnesty programs — the Streamlined Filing Compliance Procedures — that allow you to catch up with significantly reduced or zero penalties if your non-compliance was non-willful and there was no tax due on the unreported income. Many people have successfully used these programs.

The key takeaway: From the first year you meet the Substantial Presence Test and have Indian accounts exceeding $10,000 aggregate, you have an FBAR obligation. Do not let this slip.

Understanding When You Become a US Tax Resident

This is important because your FBAR obligation, worldwide income reporting, and many other US tax rules only kick in once you are a US tax resident.

The Substantial Presence Test

The IRS uses a formula called the Substantial Presence Test to determine if a visa holder (not a green card holder — they are automatically US tax residents) is a US tax resident.

You meet the test if you are physically present in the US for:

• 31 days in the current year, AND
• 183 days when calculated as: (days this year) + (1/3 of days last year) + (1/6 of days two years ago)

In practice, most H-1B holders on a full-year assignment become US tax residents in their first year. But if you arrived partway through the year, you may be a dual-status alien — a non-resident for the part of the year before arrival and a resident for the part after. This makes your first tax year more complex.

What Changes When You Become a US Tax Resident

Once you are a US tax resident:

• You are taxed on your worldwide income — Indian salary, rental income, FD interest, everything
• You must report foreign accounts via FBAR as discussed above
• You may also need to file Form 8938 (FATCA) if your foreign financial assets exceed certain higher thresholds
• Your Indian income must be reported on your US tax return, though you may be able to claim a foreign tax credit for Indian taxes already paid, which prevents true double taxation

Setting Up Your US Financial Life

5. Open a US Bank Account Immediately

Without a US bank account, you cannot receive your salary, pay rent, or do much of anything. Most employers pay by direct deposit.

To open a bank account you will typically need:

• Your passport
• Your visa
• Your I-94 arrival record (downloadable from the CBP website)
• A US address (even a temporary one works for initial setup)
• Your Social Security Number (SSN) — or some banks will open a limited account while you wait for your SSN

Apply for your Social Security Number as soon as possible after arrival. You can do this at a Social Security Administration office. Your SSN is your primary identifier for the US financial system — you need it for your bank account, your employer payroll, your tax return, and almost everything else.

6. Understand Your 401k — Do Not Default to Zero

Your employer will likely ask you to enroll in a 401k — the US employer-sponsored retirement savings plan. If you do nothing, many employers default you to either zero contribution or a small automatic enrollment percentage.

Here is what you need to understand:

The basics: You contribute a percentage of your salary to your 401k pre-tax, reducing your taxable income today. Your employer often matches a portion of your contribution — this is free money and you should almost always take it.

The complication for visa holders: Your 401k money cannot be withdrawn penalty-free before age 59½. If you leave the US before retirement, you face a 10% early withdrawal penalty plus income tax on the amount withdrawn. Alternatively, you can leave your 401k in the US and take distributions in retirement from wherever you are living.

The tax treaty consideration: India and the US have a tax treaty, but it does not specifically address 401k distributions the same way some other country treaties do. If you retire to India, your 401k distributions will be taxable in the US and may also be taxable in India, depending on how India treats foreign pension income at that time.

What should you do? At minimum, contribute enough to get your full employer match. Whether to contribute beyond that — and whether to contribute to a Traditional or Roth 401k — depends on your expected timeline in the US, your Indian tax situation, and your retirement plans. This is genuinely a case where the right answer varies by person.

7. The Social Security Question

Every paycheck, you will see a deduction for Social Security and Medicare taxes. This is not optional.

To qualify for US Social Security retirement benefits, you generally need 40 credits — roughly 10 years of work in the US.

If you work in the US for fewer than 10 years and return to India, you will not qualify for US Social Security retirement benefits. India and the US do not have a totalization agreement — the bilateral arrangement that allows you to combine work credits from both countries. Most other major destination countries for Indians (Canada, UK, Australia) do have such agreements with the US. India does not.

This means the Social Security taxes you pay may provide no retirement benefit if you leave before 10 years. This is a real cost to factor into your financial planning if you are uncertain about how long you will stay.

8. Build Your US Credit History From Day One

When you arrive in the US, you have no credit history. This makes renting an apartment harder, getting a credit card harder, and eventually buying a car or home harder.

Start building your credit history as soon as possible:

• Apply for a secured credit card — you deposit money as collateral, and the card reports your payments to the credit bureaus
• Some banks offer credit cards to new immigrants without a credit history if you have a relationship with the bank
• Pay your balance in full every month — carrying a balance costs you interest and is not necessary to build credit
• Do not apply for too many cards at once — each application creates a hard inquiry that temporarily lowers your score

Within 12 to 18 months of consistent use, you should have a reasonable credit score that unlocks better financial products.

Insurance — The Safety Net You Cannot Ignore

9. Health Insurance Is Not Optional

The US healthcare system is expensive in ways that are genuinely shocking to most Indians. A single emergency room visit can cost several thousand dollars without insurance. A hospital stay can run into tens or hundreds of thousands.

Your employer will almost certainly offer health insurance. Enroll in it. Even if the premium feels high, it is almost always worth it.

If you have a family in India joining you later, understand how dependent coverage works under your plan before they arrive.

10. Disability and Life Insurance

Your employer may offer disability insurance that replaces a portion of your income if you cannot work due to illness or injury. If offered, consider enrolling.

Life insurance becomes important if you have dependents — in India or the US — who depend on your income. If your employer offers group life insurance, it is usually free or low-cost. Consider whether the coverage is sufficient.

The Bigger Picture: Your Financial Life Spans Two Countries

You have come to the US to build a better life. But your financial life does not start from zero — you have accounts, assets, and perhaps family obligations in India. These do not disappear when your flight lands.

The most common mistake we see is treating Indian and US finances as two separate, unrelated things. They are not. Your Indian FD interest is reportable on your US tax return. Your US 401k will be relevant when you eventually retire — wherever you retire. Your NRE account strategy affects how easily you can move money between countries.

Building a financial life that works across both countries requires someone who understands both. That is what AM Wealth Management is here for.

The Checklist Summary

Before you leave India:

• Convert resident savings accounts to NRO accounts
• Understand your PPF options and make no hasty decisions
• Decide what to do with your EPF balance
• Make a comprehensive list of all Indian financial accounts
• Set up NRE account for repatriating US earnings to India

In your first weeks in the US:

• Apply for a Social Security Number
• Open a US bank account
• Enroll in employer health insurance during the open enrollment window
• Enroll in 401k — at minimum, capture the employer match

In your first year:

• Understand when you meet the Substantial Presence Test
• Determine your FBAR obligation and file if required (April 15 deadline, auto-extended to October 15)
• Check if Form 8938 (FATCA) applies to your situation
• Start building US credit history
• Keep records of the maximum balances in your Indian accounts throughout the year

Ongoing:

• File FBAR annually if your Indian account balances exceed $10,000 aggregate
• Report Indian income on your US tax return
• Review your NRE/NRO account strategy annually
• Revisit your India financial accounts and their US tax implications

A Final Note

This guide is written for general education. It is not tax advice, legal advice, or financial advice tailored to your specific situation. FBAR rules, tax residency rules, and India-US financial regulations are complex and change over time. Before making decisions about your 401k contributions, EPF withdrawal, PPF account, or FBAR filing, consult with a qualified professional who understands both Indian and US financial systems.

If you would like to talk through your specific situation, AM Wealth Management offers a free initial consultation. We work with Indians at every stage of the US journey — arriving, building, and eventually returning.

AM Wealth Management is a fee-only fiduciary financial advisor. This post is for general informational purposes only and does not constitute financial, tax, or legal advice. Please consult qualified professionals before making financial decisions.