Instead of visiting a local bank or credit union during banking hours, you can conveniently open a bank account online. All you need to do to open a bank account online is visit the financial institution’s website, fill out an application and provide the proper documentation. Your account can be ready for your first deposit in just minutes.
While the process of opening a checking account online is quite easy, it still helps to be prepared before you sit down at your computer to do it. We’ll walk you through the steps.
5 steps to open a bank account online
1. Gather the necessary information and documents
When you’re ready to start the application process for opening a bank account online, make sure you’re using a secure computer and internet connection. Opening an account isn’t something you should do on public Wi-Fi or a shared device.
You can save time by gathering the information and paperwork you’ll need ahead of time. This will likely include the following:
- Personal information, such as your legal name, address and birth date
- Your Social Security or tax identification number
- A U.S. or state government-issued photo ID, such as a driver’s license, U.S. passport or military identification; some banks and credit unions accept foreign passports and Consular IDs, such as the Matricula Consular card
- A second form of identification, such as your Social Security card, a utility bill with your name and address on it or your birth certificate
- An opening deposit
2. Determine what type of bank account you need
Next, you’ll need to select the type of account you want to open based on how you plan to use it. Here are some of the types of bank accounts you may have to choose from and what their intended uses are:
- Checking account: A checking account is used for everyday financial transactions. This is the best type of account for paying your monthly bills, such as your rent or mortgage and your utilities. A checking account usually comes with a debit card, making it easy to withdraw money at an ATM when you need cash, or to use the card itself to make transactions at stores and restaurants. Some checking accounts also pay interest. You can find good checking account options at brick-and-mortar financial institutions or online banks. Here are some checking accounts you might consider.
- Savings account: A savings account is intended for putting away money for emergencies or financial goals. Savings accounts pay account holders interest, although most traditional banks offer negligible rates. Online banks offer high-yield savings accounts with higher rates. Some financial institutions limit certain types of withdrawals from savings accounts to a set amount per month, so this type of account may not be the best for handling day-to-day transactions. Here are some savings accounts to consider.
- Joint bank account: A joint bank account is a checking or savings account that you open with another person, such as a spouse, child or parent. This can be a good type of account if you are working on goals together, or if one account holder needs help managing their finances. You’ll want to make sure you really trust the person with whom you open the account, and you should understand the potential tax implications and other complications involved.
3. Comparison shop to find the right bank for you
Before you select a bank, shop around to compare features and terms to find the best account for your situation and needs. Consider these criteria:
- Minimum deposits and fees: Some banks will require a minimum deposit to open certain types of accounts, or a minimum daily balance to waive fees. Before you open an account, be sure to understand the potential charges you might incur.
- Interest rates: The average savings account earns an interest rate of around 0.05% and the rate for the average interest-bearing checking account is 0.04%. Some online banks pay as much as 1% for a high-yield savings account, or more in a higher-interest-rate environment. Interest rates are not fixed, so they can change depending on the overall interest rate environment at any given time.
- Accessibility: Brick-and-mortar banks and credit unions may offer convenience with branches for making deposits or withdrawals in person. Large financial institutions may also offer larger ATM networks.
- Account holder perks: Some financial institutions provide benefits for consumers, such as fee-free accounts if you maintain a minimum balance or use direct deposit. Banks and credit unions may have apps that allow you to make mobile deposits with your device. And some banks and credit unions offer budgeting tools built into their accounts that make it easy for you to track your spending.
4. Confirm whether you’re able to open an account online
Some consumers may not be able to open an account online, and there are circumstances in which you’ll need to visit a branch. For example, if you are under the age of 18, you may need to have a parent or guardian open an account with you. And if you aren’t a U.S. citizen, you might need to go to a branch to open an account.
Additionally, if you have a spotty bank account history, your bank account application may be declined. Financial institutions check your past banking performance with ChexSystems, which is similar to a credit-reporting bureau. Governed by the Fair Credit Reporting Act (FCRA), it provides information on your checking account history, including overdrafts, closed accounts and unpaid bank account fees.
The data stay on your report for up to five years. If you are denied a bank account due to your ChexSystems report, you are entitled to a free copy every 12 months by visiting www.chexsystems.com. If you find inaccurate information, you can contact the reporting bank first to have it corrected, or report it through ChexSystems to have it investigated.
5. Fill out an application and fund your new account
When you’re ready to open your account, it’s time to fill out the application. During the process of opening a checking account, you’ll typically have to provide details including your name, address, date of birth and contact information. You will likely be asked to email or fax documents to verify your identity. You also may be asked to sign and return a Signature Card to prove your identity, particularly when opening a business bank account.
The timeline for your account can vary by institution. Some banks will provide instant approval, while others may take up to two business days. You can start making transactions after you add money to your account and the funds clear.
To make an initial deposit online, you’ll need to transfer money from another account you own with its routing and account numbers. You can also deposit a check or money order by mail or by visiting a branch. You may have to make your initial deposit in person if this is your first bank account.
Opening a bank account online FAQ
What are the benefits of opening a bank account online?
In one word — convenience. You can open your account at a time that works for you, and you don’t have to worry about leaving important documents at home.
What are the disadvantages of opening an account online?
If you have questions about the account or the paperwork you need, you won’t have as much guidance as you would if you went to a branch in person.
Is it safe to open an account online?
It should be, as long as you are using a secure internet connection and computer.
What do I do if my application to open a bank account online is denied?
Ask the financial institution for the reason you were declined. If it’s due to your checking history, request a copy of your ChexSystems report to verify the information.