How to Open a Bank Account
You can open a bank account either by applying online or by visiting a local branch of the bank where you’d like to open an account — that is, unless the bank is online-only and does not have any physical locations.
Opening a bank account does not always require a strong credit score, but you will need to prove your identity and choose a bank that fits both your needs and banking history. Below, we discuss the basic requirements of opening a bank account. We also detail the account opening process and options for those with past banking or credit problems.
Basic Requirements at Major Banks
Most banks require the following to open an account:
Proof of Identity
Opening a bank account requires that you provide either a Social Security number (SSN) or Individual Taxpayer Identification Number (ITIN) and a mailing address. At most banks, you must also provide personal details like your email address, legal name, and date of birth. Most banks require account holders to be at least 18, unless you are opening a teen checking account with a parent or guardian.
For information on what you need to open a checking or savings account, see our article on the account requirements at major U.S. banks.
Banks typically rely on your consumer banking report when deciding whether or not to allow you to open an account. A consumer banking report includes past banking issues like overdrawn accounts, bounced checks, forced account closures, and unpaid fees. ChexSystems is the most commonly used banking report; to find out whether you have any negative information on your report, you can request a copy from ChexSystems once every 12 months.
When you apply for a bank account, the bank may also pull your credit report to check for instances of bankruptcy or fraud. If you’re unaware of your credit score or have not recently checked your credit report, you can use a credit monitoring service like Credit Karma or request your annual free credit report. Note that opening a bank account does not require a particular credit score.
Poor Banking History? Try These Banks/Accounts
If you find yourself turned away from major banks due to your banking history, there are credit unions and second-chance checking accounts that will allow you to open an account and begin repairing your consumer profile. However, a bad ChexSystems report, history of overdrafts, or previous account closure will not necessarily stop you from getting a new bank account.
Look for a bank or credit union that offers a “fresh start” or “opportunity” checking account. BBVA, Capital One, Axiom Bank, and Wells Fargo are among the banks that either don’t rely on ChexSystems when deciding whether to accept you as a new account holder and/or offer “second chance” accounts for customers who wouldn’t normally qualify an account with the bank.
These accounts often have higher fees than traditional checking accounts but serve as an initial step in the process of recovering your ChexSystems record and credit profile. You can eventually upgrade to a standard account or open a traditional account at a different bank. For more details, see our list of accounts that don’t use ChexSystems.
Account Opening Process
Most banks allow you to apply for an account online or at a local branch. Once approved, you should be able to begin using your account immediately. While the application details can vary by bank, the general process for opening a checking account is as follows:
Submit an Application
Whether you are applying online or at a branch, checking account applications typically request the following information:
- Full legal name
- Birth date
- Social Security number
- Citizenship status
- Residential mailing address
- Phone number
- Email address
- Account options, such as whether you will opt-in for overdraft protection
- Opening deposit amount (if required)
- Account holder’s signature and the application date
Once you submit your application, you should learn whether you qualify for an account the same day.
If you do not qualify for a bank account on your own, you may be eligible to become an additional user on a significant other or relative’s bank account. For more information, see our article on how to add someone to a bank account.
Read and Sign the Account Agreement
The bank will evaluate your qualifications when you apply for an account, but you should also evaluate the terms of the account before signing the agreement. Keep an eye out for the following policies to be sure that you understand the terms and associated fees:
- ATM availability and out-of-network ATM fees
- Daily and monthly transaction limits
- Funds availability/hold times
- Inactivity policies
- Monthly service fee and fee waiver options
- Overdraft policy, protection options, and fees
- Returned payment policy
- Statement options (by mail or electronic)
- Stop payment policy
- Withdrawal types and limits
Knowing the details of these policies ahead of time will allow you to manage your account well and keep it in good standing. And, if you disagree with any of the terms of the account, you can choose not to sign the agreement and look for another bank.
Fund the Account
The bank will usually give you several options by which to fund your account; you may be able to use a debit card from another account, a personal check or paycheck, a direct deposit, or cash. You will typically have about 30 to 45 days after opening the account to fund it to keep the account active, even if the account does not require an opening deposit.
Begin Using the Account
Your debit card will typically arrive by mail, though, as previously reported, some banks and credit unions issue debit cards on the spot. Once you receive your debit card, you can use it to make purchases and use ATMs. If your account includes free checks or if you purchased checks, these will also arrive by mail.
While waiting for your card to arrive, you can access your account by visiting the lobby of the bank or using the app. The bank may also issue a temporary ATM card for deposits and withdrawals so that you can access your account outside of business hours.
Why Open a Bank Account?
There are a number of alternatives to bank accounts, such as prepaid debit cards and check cashing stores. These options have some benefits over traditional banking — at a check cashing store, for example, you’ll get the cash from your check immediately rather than waiting 24 hours or longer for a bank hold to pass. However, there are also several advantages to having a bank account, including:
No-Fee and Low-Fee Options
While most banks charge monthly service fees and other fees, there are options that have no fees or minimal costs. For example, the Capital One 360 Checking account has no monthly service charge or ATM charges and only charges overdraft fees if you opt in for Next Day Grace coverage.
You can also avoid the transaction fees at retail financial service centers by carrying out transactions at your local branch or in the bank’s mobile app. Many banks, for instance, allow members to deposit or cash checks at no cost, while check cashing stores charge fees ranging up to 10% per check.
Be sure to look at the fee schedule of the account you are interested in before applying or signing the account agreement. Compare it to your current prepaid debit card or check cashing store’s fees to determine whether it makes financial sense for you to switch to a bank account; usually, the total fees you pay per month and year will be lower, particularly if you manage your bank account well.
Mobile and Online Services
Bank accounts offer online and mobile account management. Common features include mobile check deposits, online bill payments, fund transfers between your own accounts, fund transfers to others, and mobile alerts to help you keep track of your balance. Direct deposit, of course, is also a feature — and, like prepaid cards, some banks offer early direct deposit.
These features are available 24/7 and you can bank from your home or from anywhere else with a Wi-Fi connection.
While prepaid cards also offer apps and online account management, they may not have all of the features banks provide — and many of these services are free for account holders.
Banks offer security through fraud protection and deposit insurance. Banks have dedicated fraud departments, which will not only contact you as soon as possible if there is suspicious activity on your account (such as if your card number has been stolen) but are also available 24/7 should you need to report any instances of fraud. The bank will have procedures in place to help you report unapproved charges and recover stolen funds if you have any issues with your debit card. Many banks will also allow you to set up alerts that will notify you if a transaction on your account exceeds a certain amount.
As a single account owner, if you choose a bank account with Federal Deposit Insurance Corporation (FDIC) insurance, the FDIC will insure your account up to $250,000. This means that if the bank fails and permanently closes, the FDIC will return your funds either as a check or by providing you with an account at a different insured bank. Some prepaid cards do not offer FDIC insurance, so this can be a benefit of opening a bank account.
Improve Your Finances
Having a bank account allows you the opportunity to improve your finances by building a secure emergency fund or savings. Look for a checking account that comes with a connected savings account; most will allow you to make easy or automatic transfers into your savings account. Or, open a checking account and set a goal to keep a certain balance or avoid overdrafts.
With automatic and online bill payments, you can also avoid late fees on other accounts, which can improve your credit profile. For example, you can set up automatic monthly payments to accounts, which will help you avoid late fees and keep those accounts in good standing.
Banks also offer account holders the opportunity to build credit. Most banks — including Bank of America, Fifth Third Bank, PNC, and Wells Fargo — offer credit cards in addition to their bank account services. Say you have a low credit score or minimal credit history but you are able to maintain good standing on your bank account for several months; the bank may offer you a secured credit card, which will report activity to the three credit bureaus each month. As long as you do not overspend on that card or miss payments, your credit score will increase, and you may eventually become eligible for an upgrade to an unsecured credit card.
Opening a bank account involves providing the bank with your personal information, verifying your identity, completing an application, submitting to a consumer history check, signing an account agreement, and funding your new account before you begin using it. While there are several steps to the process, you can usually complete begin using your account the same day you apply.
For applicants who have a poor banking history, there are alternatives like credit unions and second-chance checking accounts, which can help you change your “unbanked” status and repair your consumer profile. If you choose the right account to fit your needs, you can save money on fees compared to using check cashing stores or prepaid debit cards.
Having a bank account will also allow you access to mobile and online services like bill payment and money transfers, security features like FDIC insurance, and ways to improve your finances, such as building credit or creating an emergency fund.