(UNITED STATES) This practical guide helps you decide if you must file an FBAR for accounts outside the United States 🇺🇸. It explains what a Financial Account is, what counts as a Foreign Financial Account, how a Joint Account works, who has a financial interest or signature authority, and what exceptions apply. You’ll move through a clear checklist, gather what you need, spot common traps, and know your next steps to file FinCEN Form 114 (FBAR) online with confidence.
Who Should Use This Guide: Plain-Language Eligibility
Start here if you are a “United States person.” That includes:
- An individual (including a minor child)
- A legal entity such as a limited liability company, corporation, partnership, trust, or estate
In FBAR rules, “United States” includes the 50 States, the District of Columbia, and all U.S. territories and possessions (for example, American Samoa and the Commonwealth of the Northern Mariana Islands).
You may need to file if you have a financial interest in a Foreign Financial Account or if you have signature authority over one.
Key definitions:
– Foreign Financial Account = any Financial Account located outside the United States.
– If the account sits in a bank branch physically outside the U.S., it is foreign—even if the bank is a U.S. bank.
– If the account sits in a branch of a foreign bank that is physically inside the U.S., it is not foreign.
Financial interest exists in these situations:
– You are the owner of record or hold legal title (even if the account benefits someone else).
– Another person or entity holds title on your behalf (agent, nominee, attorney).
– You own >50% of a corporation’s shares or voting power.
– You own >50% of a partnership’s profits or capital.
– You hold certain grantor trust interests or >50% present beneficial interest in a trust’s income/assets for the year.
– You own >50% of another entity’s voting power, equity value, assets, or profits.
Children:
– Generally, a child is responsible for filing their own FBAR.
– If a child cannot file due to age or other reason, a parent, guardian, or legally responsible person must file for the child.
– If the child cannot sign, a parent or guardian must sign electronically.
Step-by-Step: Decide If You Need to File an FBAR
1) Identify your possible Financial Accounts
– Financial Account includes: securities, brokerage, savings, demand, checking, deposit, time deposit, or other accounts with a financial institution or a person acting like one.
– It also includes commodity futures/options accounts, insurance policies with a cash value (e.g., whole life), annuity policies with a cash value, and shares in mutual funds or similar pooled funds that are publicly available and offer regular NAV determinations and redemptions.
2) Determine if the account is foreign
– Ask: Where is the account physically located?
– If the branch is outside the U.S., the account is foreign.
– If the branch is inside the U.S., the account is not foreign—even if the bank is foreign.
3) Check whether you have a financial interest
– You have one if you hold title or are the owner of record.
– You also have one if a title holder acts as your agent, nominee, or attorney.
– Entity thresholds apply if you own >50% by shares, voting power, profits, capital, or present beneficial interest.
4) Check whether you have signature authority
– Signature authority means you can control how money moves in the account by giving instructions directly to the bank or institution, either alone or together with others.
– Some officers and employees of certain regulated or listed companies may be exempt from reporting signature authority (see the exceptions section).
5) Confirm whether any special exceptions apply
– Certain accounts do not need to be reported (for example, governmental accounts or bank-to-bank correspondent accounts). See the exceptions section below.
6) Pay attention to Joint Account ownership
– A Joint Account is any of the account types above owned by two or more people together.
– If you and your spouse have a Joint Account, both spouses generally must file separate FBARs, and each spouse must report the entire value of all jointly owned accounts—unless a specific combined-filing option applies. When in doubt, plan for separate filings and reporting of the full amount by each spouse.
7) Consider entity filing rules
– If a company is included on a consolidated FBAR filed by its owner (who holds >50%), the company itself typically does not need to file a separate FBAR.
8) If a trust is involved
– A trust beneficiary with a financial interest due to >50% present beneficial interest does not need to file if the trust, trustee, or agent who is a U.S. person files an FBAR that includes the trust’s foreign accounts.
9) If you are on a U.S. military installation
– An account at a financial institution located on a U.S. military base does not need to be reported, even if that base is outside the United States.
Note: VisaVerge.com reports that careful screening of ownership and authority—especially across family members, small businesses, and overseas policies with cash value—prevents errors that can trigger follow-up questions and delays.
What Counts as a Financial Account: Concrete Examples
The FBAR definition is broad and includes common bank products and investment vehicles:
- Securities accounts (stocks, bonds)
- Brokerage accounts
- Savings and demand accounts
- Checking and deposit accounts
- Time deposit accounts (e.g., some CDs held at a financial institution)
- Any other account kept with a financial institution or a person acting like one
Beyond bank accounts, also included:
– Commodity futures or options accounts
– Insurance policies with a cash value (such as whole life insurance)
– Annuity policies with a cash value
– Shares in a mutual fund or similar pooled fund that is available to the general public and provides regular NAV and redemptions
Two points often missed:
– Insurance or annuity policies with cash value are Financial Accounts. If the policy is foreign, it likely must be reported.
– Mutual funds or similar pooled funds that are public, with regular valuation and redemption, are Financial Accounts. If the fund is foreign, it fits the foreign definition.
When making your list:
– Include all accounts matching the items above.
– Then apply the “foreign” test (physical location).
What Makes an Account a Foreign Financial Account
Think location, not branding. A Foreign Financial Account is simply a Financial Account located outside the United States.
- Account with a branch of a U.S. bank that sits in another country = foreign.
- Account with a branch of a foreign bank that sits inside the U.S. = not foreign.
- The physical location of the account determines foreign status—not where the bank is headquartered.
This applies to policies and pooled funds too:
– If a whole life insurance policy with cash value is issued and maintained outside the U.S., treat it as a Foreign Financial Account.
– If a mutual fund is a foreign public fund offering regular valuation and redemption, it qualifies as a Foreign Financial Account.
Special Rules, Exemptions, and When You Don’t Report
Several special rules exclude certain accounts from FBAR reporting. Review these carefully.
- Correspondent/Nostro accounts
- Bank-to-bank settlement accounts maintained solely for settlement purposes are not required to be reported.
- Governmental entity accounts
- A foreign financial account owned by a U.S. governmental entity is not required to be reported by any person. This includes colleges/universities that are agencies or instrumentalities of a governmental entity, or employee retirement/welfare plans of a governmental entity.
- International financial institution accounts
- A foreign financial account of an international financial institution of which the United States government is a member is not required to be reported by any person.
- IRA owners and beneficiaries
- If you own or are a beneficiary of an IRA, you are not required to report a foreign financial account held in the IRA.
- Participants in and beneficiaries of certain retirement plans
- Participants/beneficiaries of plans described in IRC sections 401(a), 403(a), or 403(b) do not need to report a foreign financial account held by/on behalf of the plan.
- United States military banking facility
- An account at a financial institution on a U.S. military installation is not required to be reported—even if the installation is outside the U.S.
- Trust beneficiaries
- If your interest arises from being a trust beneficiary as described under the financial interest rules, you do not need to report the trust’s foreign accounts if a U.S. person who is the trust, trustee, or agent files an FBAR disclosing the trust’s foreign accounts.
- Consolidated FBAR for entities
- A U.S. entity named in a consolidated FBAR filed by an owner with >50% ownership does not have to file separately.
- Signature authority exceptions
- Signature authority exists when you can direct the bank to move funds. Some officers/employees are exempt from reporting signature authority when the account belongs to a regulated or listed company:
- Officers/employees of a bank examined by the OCC, Federal Reserve, FDIC, Office of Thrift Supervision, or NCUA, when the account is owned/maintained by that bank.
- Officers/employees of a financial institution registered with and examined by the SEC or CFTC, when the account is owned/maintained by that institution.
- Officers/employees of an Authorized Service Provider to an investment company registered with the SEC, when the account is owned/maintained by that investment company.
- Officers/employees of an entity whose equity securities (or ADRs) are listed on any U.S. national securities exchange, when the foreign account belongs to that entity.
- Officers/employees of a U.S. subsidiary, when the U.S. parent’s equity securities are listed on a U.S. national securities exchange and the subsidiary is included in the parent’s consolidated FBAR.
- Officers/employees of an entity with equity securities registered (or ADRs registered) under section 12(g) of the Securities Exchange Act, when the foreign account belongs to that entity.
These carve-outs focus on who must report signature authority when the account belongs to a regulated or listed company or related group. If your situation does not match an exception, and you can move funds by direct instruction, treat it as signature authority.
Important: If you have signature authority and no exception applies, you generally must report—even if you have no financial interest in the account.
Joint Account Rules, Spouses, and Children
- A Joint Account is any Financial Account (checking, savings, brokerage, mutual fund shares, cash-value insurance, annuity) owned by two or more people together.
- FBAR rules generally require both spouses to file separate FBARs, and each spouse reports the entire value of jointly owned accounts—unless a specific combined-filing option applies.
- Do not split the account value when reporting. Each spouse lists the full value of each jointly owned foreign account on their own FBAR.
Children:
– A child must file their own FBAR when required.
– If a child cannot file, a parent, guardian, or legally responsible person must file and sign electronically if needed.
– Reporting follows ownership, not age.
Family and entity overlap:
– If you own >50% of an entity that holds foreign accounts, you may have a financial interest through that entity and must report the entire account value, regardless of internal ownership splits among family members.
Filing Logistics: Where and How to File
The FBAR is filed electronically as FinCEN Form 114 (FBAR).
- Use the official FinCEN page to begin filing and to review instructions: Report of Foreign Bank and Financial Accounts (FBAR)
Before filing:
1. Confirm accounts are Financial Accounts.
2. Confirm each is a Foreign Financial Account (physical location test).
3. Confirm whether you have a financial interest or signature authority.
4. Review the exceptions in this guide, especially for family and business contexts.
5. When in doubt, gather information for all possibly reportable accounts and consult the FinCEN instructions linked above.
Common Pitfalls to Avoid
- Treat the account’s physical location as the deciding factor for “foreign,” not the bank’s headquarters.
- Don’t forget non-bank products: cash-value insurance, annuities, and public mutual funds can be Financial Accounts.
- For spouses with a Joint Account, unless a combined-filing option applies, each spouse files and reports the full value.
- If you can move funds by direct instruction, you likely have signature authority unless a specific exception applies.
- Screen ownership and authority carefully across family members and entities—errors often arise from overlooked agency, nominee, trust, or corporate ownership structures.
If you need a checklist or a printable worksheet to track accounts, owners, locations, and authority, consider creating a table listing:
– Account owner(s)
– Account type
– Financial institution and branch location
– Whether you have financial interest (Yes/No)
– Whether you have signature authority (Yes/No)
– Notes on exceptions or supporting documents
Use the FinCEN page linked above to complete the electronic filing when ready: Report of Foreign Bank and Financial Accounts (FBAR)
This Article in a Nutshell
This guide helps U.S. persons determine FBAR filing requirements for foreign financial accounts. It defines Financial Accounts—including securities, brokerage, cash-value insurance, annuities, and public mutual funds—and instructs readers to use the account’s physical location to decide foreign status. The guide explains when financial interest exists (owner of record, agent/nominee, or >50% ownership thresholds) and when signature authority triggers reporting. Special rules cover joint accounts, trusts, consolidated FBARs for entities, military base accounts, and exceptions for certain regulated-company officers and specific account types. Follow the step-by-step checklist, gather documentation, and file FinCEN Form 114 online when required.
