How to hold US dollars abroad: bank accounts, money funds, T-bills and stablecoins

Keeping savings in US dollars is common wherever the local currency has a history of falling, and for anyone who earns, spends or invests in dollars. The real question is where to keep them: a dollar account at a local bank, an account at a bank in the United States, a dollar money market fund, Treasury bills or stablecoins.

This guide compares the five on safety, cost, access and legality, explains how deposit insurance treats dollar deposits in different countries, and works through what $10,000 earns or loses in a year in each. Local rules decide what you may hold and how it is taxed, so start with your central bank's exchange rules and your tax authority. The invest-from-abroad hub covers the wider US rules for non-residents.

What are the main ways to hold US dollars abroad?

There are five common tools, and they differ most in who stands behind the money and what it earns after fees.

Two ideas run through the comparison. A deposit is a loan to a bank, so its safety rests on that bank and on any insurance scheme behind it. A fund share or a bill is an asset a broker holds for you, and a stablecoin is a claim on its issuer's reserves, so their safety rests on the assets and on how they are held. And the cost of holding dollars is often set less by the interest rate than by the fees to move money in and out.

How safe is a dollar account at a local bank?

It is as safe as the bank and the country's deposit insurance, and many insurance schemes treat foreign-currency deposits differently from local ones.

A dollar deposit at a bank outside the United States is what bankers call a eurodollar: a claim in dollars on a non-US bank, which in turn keeps dollars with correspondent banks in the US. The account is convenient, because the money sits next to your local accounts and converts at the same counter, but it carries the local bank's credit risk and the country's legal risk.

That legal risk is not theoretical. In February 2002, during a banking crisis, Argentina's Decree 214 converted every dollar deposit in its financial system into pesos at 1.40 per dollar, while the market rate was about 1.80, according to an IMF staff study. Withdrawals had already been restricted since December 2001. A local dollar account shields you from a falling currency only as far as the authorities allow.

Does deposit insurance cover dollar deposits?

Sometimes: each country's scheme sets its own rules on foreign currency, and a few exclude it entirely.

Insurance pays out on the scheme's terms and often in its own currency. Hong Kong converts a dollar deposit into Hong Kong dollars to calculate and pay compensation, so a depositor receives local money at the very moment the currency may be under strain. Schemes also exclude investment products: Hong Kong's list names virtual assets, and Canada's names cryptocurrencies, including stablecoins. If your country is not in the table, ask the bank in writing whether its dollar accounts are covered.

Can you keep dollars in a US bank account from abroad?

Yes, if a US bank will open one for you, and the account then has FDIC cover and favorable US tax treatment.

FDIC insurance does not depend on citizenship or residence: deposits at an insured bank are covered up to $250,000 per depositor, per insured bank, per ownership category. Two limits matter for people abroad. A deposit at a US bank's branch outside the United States is not insured, even when it is also payable in the US, under the FDIC's rules. And products a bank sells, such as money market funds, are investments rather than deposits; FDIC insurance explained covers the categories.

The US tax position is tidy. IRS Publication 515 exempts interest on deposits with US banks from withholding when it is not tied to a US business, and the tax code treats such deposits as property outside the United States for a non-resident's estate. A US fund holding the same dollars would count as US property, as the US estate tax guide for non-residents explains.

Opening the account is the hard part. US banks must verify every customer's identity, many serve only residents, and those that accept people abroad usually ask for a passport, proof of foreign address and the tax form covered in Form W-8BEN explained. Each international wire in or out also carries fees at both ends.

Are money market funds and T-bills a better home for idle dollars?

For money that will sit for months, they usually earn far more than a bank account, but neither is a deposit, so deposit insurance does not apply.

A dollar money market fund pools short-term government debt, repurchase agreements and bank deposits, and pays close to short-term interest rates minus its fee; how money market funds work explains the mechanics. If the broker holding the shares fails, a broker-protection scheme may apply, such as SIPC for US brokers, which covers up to $500,000 per customer, including up to $250,000 in cash of missing assets but not market losses.

The fund's legal home matters. Shares of a US-domiciled fund count as US property for estate tax, and its payouts can suffer withholding unless the fund reports them as interest-related dividends. A dollar fund domiciled in Ireland or Luxembourg avoids both, and it is generally the only kind EU brokers can sell to retail clients.

Buying bills directly skips the fund fee and fixes the yield until a set maturity date. The routes open to non-residents, the tax exemptions and a worked purchase are in Treasury bills for non-US investors, and today's yields are on the T-bill rates page. For people who already hold stablecoins, tokenized Treasury funds offer a third route, with extra risks.

Should you hold dollars as stablecoins?

They are the easiest dollars to reach from many countries, but they pay no interest from the issuer and carry no deposit insurance.

A payment stablecoin is a token that aims to stay at $1, backed in the case of the largest coins by cash and short-term government debt. In the United States they fall under the GENIUS Act, whose timeline is: Signed July 18, 2025 (Public Law 119-27); takes effect January 18, 2027. Once in force, it bars permitted issuers from paying interest or yield to holders, makes it unlawful to market a stablecoin as federally insured, and puts holders first in line for the reserves if an issuer fails. Stablecoin regulation and the GENIUS Act covers the rest of the law.

For someone abroad, the appeal is reach: a phone and a wallet are enough, with no foreign bank account. The costs are spreads to buy and sell, network fees and the need to keep keys or a platform account safe. Whether you may buy stablecoins at all, and how a sale is taxed, depends on your country. The table below shows the largest dollar stablecoins, their supply and their backing.

The stablecoin data page tracks more coins, and stablecoin yield vs bank interest explains where the rewards some platforms advertise come from and what can go wrong.

What does it cost to hold $10,000 for a year each way?

The difference between the cheapest and dearest option is mostly interest forgone, and transfer fees matter more for small or short-term balances.

Taxes change the ranking less than you might expect. Bill interest and US bank interest are generally free of US withholding for non-residents, a fund's payouts usually are when reported as interest-related dividends, and your home country taxes all of them. The cost of converting your own currency into dollars in the first place comes on top; check any quote against the mid-market rate on the currency converter, and see exchange rate markups for how to spot the margin.

Do local rules let you hold dollars?

Usually yes in some form, but many countries cap how much residents can move abroad or require them to declare foreign accounts.

Two examples show the range. India's Liberalised Remittance Scheme lets resident individuals send up to USD 250,000 per financial year (April to March) abroad, and the Reserve Bank of India's rules allow that money to sit in foreign-currency accounts outside India, among other uses. South African residents can move up to R2 million per calendar year under the single discretionary allowance, and more with tax clearance. Other countries restrict dollar accounts at home, require export earnings to be converted, or limit crypto-assets.

Holding dollars abroad also tends to create a reporting duty. Many tax authorities ask residents to list foreign bank and investment accounts each year, and they tax interest and, in some countries, currency gains on conversion. The guide to reporting US investments at home covers the common systems; the details depend on where you are tax resident, so ask a local tax adviser.

What are the risks of holding dollars abroad?

The biggest risk is the exchange rate itself: dollars protect you when your currency falls but cost you when it rises.

• Currency risk. A 10% rise in your own currency wipes out more than two years of interest at 4%. Currency risk on US investments works through how this feeds into returns.
• Bank and country risk. A local bank can fail, its deposit scheme may exclude dollar deposits or pay out in local money, and a government in crisis can freeze or convert dollar accounts, as Argentina did in 2002.
• Intermediary risk. Brokers, platforms and stablecoin issuers can fail or freeze withdrawals, and protection schemes differ from country to country.
• Access risk. Banks can close accounts they no longer want to serve, and international transfers can be held for compliance checks, sometimes for days.
• Inflation. Dollars lose purchasing power whenever US inflation runs above the interest you earn; real returns and inflation shows the arithmetic.
• Stablecoin risk. A coin can trade below $1 if doubts arise about its reserves, and a lost key or a scam can take the balance with it.
• Tax and reporting risk. Undeclared foreign accounts can bring penalties at home, even when no tax was due.

How should you choose where to keep dollars?

Start with what the money is for and how soon you need it, then check protection, cost and legality in that order.