Bank Reference Letter [Ultimate Guide]

If you have never requested a bank reference letter before, it can be difficult to know how to get one and what it needs to include. In this article, we’re going to answer these questions for you and help you avoid costly mistakes.

A bank reference letter is a letter from a bank where you already have an account. It should include your name, ID number, address, state how long you have had an account with the bank, and be written on the official bank letterhead.  

If you’re opening a new account, it’s common for banks to ask for a bank reference letter. And while bank reference letters may seem like an outdated practice, they can actually be your golden ticket to unlocking valuable international bank accounts.

But before diving in, if this is your first time visiting GlobalBanks, don’t forget to download your free Non-Resident Banking Starter Guide. It’s designed to help you navigate the account opening process and find the best possible banks around the world.

What Should a Bank Reference Letter Include?

Unfortunately, most banks have unique requirements when it comes to receiving bank reference letters. So, while there are similarities, it’s hard to predict exactly what each bank wants a bank reference letter to include.

Certain banks are very strict about what should be included, who it is addressed to, signed by, and how it is delivered. Some banks will even have specific requirements for how letters are signed. That’s why it’s always smart to ask the requesting bank to confirm their exact requirements before you obtain the letter.

That said, while there are plenty of differences in bank reference letters, there are some similarities as well. With this in mind, here’s a look at the typical “must-haves” in a bank reference letter:

Account Holder Information

  1. Full legal name of the account holder
  2. Address of the account holder
  3. Government-issued ID number (e.g. passport number)
  4. Length of relationship with the issuing bank
  5. Average monthly balance or current balance on deposit

Company Bank Reference Letter

If you are obtaining a bank reference letter on behalf of a company, the standard corporate information will need to be included as well. This typically includes:

  1. Legal name of the company
  2. Incorporation number
  3. Country of registration
  4. Registered address of the company

Issuing Bank Information

  1. Name of the issuing bank
  2. Address of the issuing bank
  3. Name of the account manager or responsible party
  4. Contact information of the account manager or responsible party

Other Important Considerations

In addition to the basic requirements above, you will also want to confirm with the requesting bank whether the following are required:

  1. Does the letter need to be addressed to a certain person or division at the requesting bank?
  2. Should the letter include the current balance, average balance, or other financial information about the account?
  3. Does the letter need to be delivered in a certain format? We discuss this in detail below.

How Do You Get a Bank Reference Letter?

Bank Reference Letter Options
Bank reference letter requests are very common. In fact, at many banks, it’s considered a standard service that they provide to their account holders.

Firstly, to get a bank reference letter, you first need to confirm the requirements of the requesting bank. Then, you should contact your account manager with the request. On the other hand, if you do not have an account manager, you should contact your bank’s customer service channel and ask for instructions.

In some countries, banks do allow third parties to request bank reference letters directly. However, in such instances, a consent form signed by the account holder has to accompany the request. This is common in places like the UK, where bank reference letters are used for non-banking activities such as background checks for rental agreements.

How Much Does a Bank Reference Letter Cost?

This may be a surprise to some readers. But, it’s true that certain banks charge fees in order to issue a bank reference letter. This is especially common in banking jurisdictions across the Caribbean, Central America, and certain parts of Europe. In fact, it’s common at any bank which has “a la carte” fee model, where everything has an additional fee (e.g. balance statements, viewing transaction history, etc).

In most cases, the fee charged (if any) for a bank reference letter is reasonable. For instance, fees can be anywhere from US $10 to US $50. In other words, the fee offsets the time required for the bank to prepare the letter for you.

However, in some instances, banks charge extortionate fees that go well beyond the time and effort it takes to prepare such letters. Higher fees are also found at banks and electronic money institutions (EMIs) that cater to higher-risk individuals and businesses.

With this in mind, if you might need to obtain a bank reference letter in the near future, make sure your bank does not charge a small fortune (or make it abnormally difficult) to issue one.

Bank Reference Letter Mistakes to Avoid

Bank Reference Letter Mistakes
The most common mistakes that our team sees when it comes to bank reference letters revolve around the contents and formatting of the letter itself.

Bank Reference Letter Contents

In most instances, there’s poor communication and account holders do not confirm with the requesting bank what the bank reference letter should actually include. Instead, they just ask for a standard letter issued by the bank. Then, that letter is either rejected completely or they need to request a second letter.

This is an easy problem to avoid, which can save you time and money. For example, simply ask the requesting bank to provide you with a list of the specific information that must be included in the letter.

Bank Reference Letter Formatting

While formatting may seem trivial, certain banks have very strict criteria for bank reference letters. If your letter doesn’t meet their criteria, your letter will be rejected. This can include small details from the color the letter is in (e.g. color or black and white), whether or not the letter is addressed to the bank or specific individual at the bank, delivered electronically or in a sealed envelope, and much more.

Instead of guessing how the bank wants to receive the letter, save yourself time by confirming the format the requesting bank wants ahead of time.

Time Required to Issue a Bank Reference Letter

Most people incorrectly think that having a bank account automatically entitles them to a bank reference letter. Unfortunately, this isn’t the case.

In many instances, banks require account holders to have an account with the bank for a set period of time before they will meet such a request.

The exact period of time each bank requires before issuing a bank reference letter varies. However, in most cases, the time frame ranges between six months and one year. Of course, if obtaining a bank reference letter is important to you, make sure to check on the specific time frame required to obtain one before applying for an account there.

Can You Get a Bank Reference Letter from an EMI or Fintech Account?

If you do not have a bank account with a traditional (brick and mortar) bank, you might be wondering how to get a bank reference letter. For example, a common problem that people run into is that most EMI and fintech platforms do not issue bank reference letters.

The best course of action to resolve this problem is to open a traditional bank account. In fact, this is just one of the many reasons why everyone should have at least one traditional bank account.

Costs Associated With Bank Reference Letters

The final mistake that people make is not confirming how much a bank charges for bank reference letters ahead of time. As mentioned above, this is especially important if you are in the Unlucky Passport Club or have a high-risk business. In such instances, you may end up paying US $100 or more for a bank reference letter.

Of course, if you choose the right bank in the first place you won’t have to pay high fees for a letter.

Need Help Navigating Account Opening Requirements?

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