There are plenty of options available if you wish to open a bank account. Opening a bank account is pretty simple for many people. The majority of banks and credit unions follow a simple procedure similar to the one outlined below. In most cases, creating an account entails selecting a bank, giving specific information, and financing your account. You can begin using your account once the formalities are completed, potentially saving you time and money.
If you meet the qualifications for a bank account and want one, here’s how to open a bank account quickly and easily.
Choose a Bank or Credit Union
You may already know where you want to bank, even if you don’t know how to create an account there. If not, take a look around. Begin by locating the best fit for your current requirement (a checking account or savings account, for example). When comparing institutions, keep in mind account usage restrictions and fees, which can mount up quickly.
Financial institutions are divided into three categories:
- Banks, both small and large: These could be well-known brands in your neighborhood (or nationwide). They provide the majority of the essential services. 2 and 3 Fee arrangements at local and regional banks are generally more accommodating, however, costs at large banks may be abolished.
- Credit unions: A credit union is a member-owned financial cooperative that offers many of the same services and products as banks. If you join one of these non-profit organizations, you’ll frequently benefit from lower prices because they aren’t striving to maximize earnings. However, this isn’t always the case, so double-check charge schedules.
- Banks and credit unions that operate online: These organizations are totally web-based. There are no branches to visit (or pay for), and most service requests will be handled by you. An online bank can help you save money on fees, earn greater interest rates on savings accounts, and even get free checking if you have access to and are comfortable using a computer or mobile device for simple banking tasks.
You can also select more than one sort of bank if you wish. To keep your fees low and maintain the ability to visit a bank in the event of a financial emergency, you can elect to open an online bank account and keep your brick-and-mortar bank.
Visit a bank branch or the bank’s website.
You can open an account by visiting the institution’s website if you have a computer or mobile device with an internet connection. Look up the bank on the internet or go to the website indicated on the bank’s promotional materials.
When typing in the institution’s online URL, be cautious because counterfeit sites with similar names may exist.
The benefit of opening an account online is that it can be done at any time and from any location. If you’d prefer to open an account in person, you may typically do so, however, you’ll have to go during office hours. Prepare the following items before leaving:
- A government-issued identification card (such as a driver’s license, passport, or military identification card)
- Social Security Number (SSN)
- Your mailing and physical addresses
- A first-time deposit (if required)
When you open an account with a bank, they are usually required to verify your identification. You may be able to use another kind of identification if you don’t have a government-issued ID. Inquire with your bank about other forms of identification that it accepts.
Some financial companies will take a passport number from the originating country, an alien identification card number, or another government-issued ID number if you don’t have a Social Security number or an Individual Taxpayer Identification Number (ITIN).
Select the Product You Desire
You’ll usually have a range of account kinds and services to pick from once you’ve decided on the bank where you want to open an account, including:
- Accounts to be checked: These can be used to make payments and receive direct deposits.
- Savings accounts allow you to earn interest on your money.
- Money market accounts: These accounts provide a little higher rate of interest than savings accounts (while maintaining your access to cash).
- Certificates of deposit (CDs): These products can earn significantly more than savings accounts, but they force you to lock your money away for a certain length of time.
- Loans: Several sorts of loans may be available to you depending on your credit score and payment history (auto, home, personal loans, for example).
A bank may offer many products within one of the aforementioned categories, each with a different name and level of service. Premium accounts with additional features include higher fees (such as monthly service fees, ATM fees, and overdraft fees) and higher service fee thresholds to avoid.
Provide Your Information
When you open a new bank account, you’ll have to give the bank sensitive information. Banks are required to verify your identification in order to protect themselves and comply with rules such as the Patriot Act.
Details such as your name, birthday, and mailing address, as well as identification numbers, will be required (in the United States, this is most likely your Social Security Number, but you may be able to use an ITIN or another government-issued ID number).
You’ll type this information into a text box if you’re opening a bank account online. If you open an account in person, expect to hand over your identification to the banker, who will most likely photocopy it for the bank’s records.
Your Financial History
To open a bank account, your credit history isn’t required, but it may influence the bank’s decision to approve or deny your application. ChexSystem, a targeted consumer reporting agency that records checking and savings accounts, is frequently used by banks to assess the risk that a potential customer poses to the institution where they’re applying for an account. ChexSystem is the banking industry’s version of credit bureaus.
Many banks will also do a credit check to see if you’ve ever had trouble repaying a loan. These credit checks are normally “soft” draws that don’t hurt your credit, but if you’re concerned, it’s smart to inquire. You don’t need good credit to open a bank account, although negative credit can lead to denials in some cases.
Acceptance of the Terms
You’ll have to agree to follow certain rules and take responsibility for certain account activities. When you create a bank account, you establish a relationship centered on a crucial topic: your money. As a result, you should be aware of what you’re getting yourself into.
Are you under the age of 18?
If you’re under the age of 18, you’ll need to open an account with someone over the age of 18. You may still be able to use a debit card and access online banking, and you may be able to open your own account in the future.
If you’re starting a joint account of any kind, you’ll need all of the account holders’ personal information as well as their signatures. It’s preferable if everyone can finish the application in one location if at all possible.
In addition to bank agreements, federal law governs your account holder’s rights and responsibilities. For example, you may be protected against losses if someone fraudulently withdraws funds from your account. However, for complete security, you may need to disclose the withdrawal as soon as possible.
Print, Sign, and Mail (If Required)
Before you may open a bank account online, you may need to print, sign, and mail a document to the bank. To make the financial relationship legally binding, some banks use electronic disclosure and consent—you may do everything online. To open an account, 11 others still require a signed paper. 13 Your account will be inactive until the bank receives the documentation.
Make a deposit into your account
When you open a checking or savings account, you’ll almost always need to make an initial deposit. This is sometimes necessary as part of the account opening procedure, and other times it can be done after the account has been established. You can fund your account in a variety of ways:
- Deposit cash: By the next day, it should be accessible for use with your debit card or by writing a cheque.
- Deposit a check or money order: When you deposit a check or a money order, the funds should be available within a few business days.
- Set up direct deposit with your employer: Instead of receiving a physical paycheck, your earnings will be paid straight to your new account if your firm offers this service.
- Transfer funds electronically: If you have an external bank account, you can use it to make your initial deposit.
Begin Using Your Account
You should now have a brand new bank account in your name if you followed all of the instructions. It should take anywhere from a few minutes to a few days to be ready to use. Keep a watch out for a debit card (or ATM card) in the mail if you have a checking or savings account. You may also want to purchase a checkbook so that you can write checks. You can sign up for (generally free) account services that help you manage your money to make the most of your account, especially if you have access to a computer or mobile device:
- Online bill pay: You can use this function to pay your bills online.
- Remote check deposit: Using your bank’s mobile app, you may be able to deposit checks without having to visit a branch or fill out deposit slips.
- Alerts: Sign up for SMS or email notifications to get notified when your account balance falls below a certain threshold (or when large withdrawals happen).