There are numerous choices available for opening a bank account. For many people, creating a bank account is a simple process. Most banks and credit unions use a simple procedure similar to the one outlined here. Creating an account entails selecting a bank, submitting specific information, and financing your account. Once the procedures are completed, you will be able to begin utilizing your account, potentially saving you time and money. Of course, not everyone wants or believes they qualify for a bank account. According to an FDIC survey, around 7.1 million families in the United States are "unbanked," indicating that no one in the home has a checking or savings account at a bank or credit union. The most usual reason was given by respondents for not having a bank account? They lacked the funds to achieve the minimum balance criteria. That is a legitimate issue, but many alternatives, such as check-cashing services, which individuals without bank accounts rely on, are also expensive. If you are eligible for a bank account and want one, here is a quick and easy method to open one.
Choose a Bank or Credit UnionYou may already know where you want to bank, even if you're unsure how to open an account there. If not, go shopping. Begin by identifying the best match for your urgent requirement (checking or savings account, for example). When comparing institutions, keep account usage restrictions and fees in mind, as these can quickly mount up. Financial institutions are classified into three types: Banks, including community and big banks: These could be well-known brands in your town (or nationwide). They provide the majority of the essential services you require. Local and regional banks typically have more reasonable fee structures, but costs at large banks may be waived. Credit unions: A banking concern is a financial establishment owned by its members that provides many similar services and products as banks. If you join one of these non-profit institutions, you'll benefit from competitive rates because they're not always looking to maximize earnings. Nevertheless, this is not always the case, so carefully study charge schedules. Online banks and credit unions: These organizations are online. There is no need to visit (or pay for) a branch, and you will handle most service inquiries yourself. Suppose you have access to and are comfortable using a computer or mobile device for simple banking operations. In that case, an online bank can help you save money by lowering fees, earning more excellent interest rates on savings accounts, and even getting free checking. You can also select more than one sort of bank if you wish. For example, to keep your fees low and the flexibility to visit a bank in a financial emergency, you may decide to open an online bank account while maintaining your brick-and-mortar bank.
Visit the Bank Branch or WebsiteYou can make an account by visiting the institution's website if you have a computer or mobile device and an internet connection. Look for the bank on the internet or go to the website indicated on the bank's marketing materials. When entering the institution's online URL, be cautious because counterfeit sites with similar names may exist. The benefit of opening accounts online is that you can do so anytime and from any location. If you favor opening an account in person, you can typically do so, but you must do it during office hours. Prepare the following items before you leave:
- A government-issued identification document (such as a driver's license, passport, or military ID)
- Social Security Number
- Your physical and postal addresses
- A first down payment (if required)
Pick the Product You WantOnce you've decided on a bank with which to open an account, you'll often have a selection of account types and services to choose from, such as:
- Checking accounts: Make payments and receive direct deposits with these.
- Savings accounts: You can earn interest on these accounts.
- Money market accounts: These products occasionally generate slightly higher interest rates than savings accounts (while maintaining your access to cash).
- Certificates of deposit (CDs): These products earn significantly more than savings accounts but require you to lock up your assets for a set length of time.
- Loans: You may be eligible to obtain one of the various loans depending on your credit score and payment history (auto, home, personal loans, for example).
Provide Your InformationWhile opening a new bank account, you must supply the bank with sensitive information. Banks cannot open an account without verifying their identity to protect themselves and comply with legislation such as the Patriot Act. You must provide your name, birth date, mailing address, and identification numbers (in the United States, mainly called your Social Security Number). You can use an ITIN or another government-issued ID number). Valid government identification (such as a driver's license or passport) is also necessary. If you don't have these, check with your bank to see what other forms of identification they allow. You'll enter this information into a text box if you open a bank account online. If you open your accounts in person, be prepared to hand over your identification to the banker, who will most likely photocopy it for the bank's records.
Your Financial HistoryYour financial history does not have to be flawless to open a bank account, 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 estimate how much danger a potential customer poses to the institution where they're applying for an account. ChexSystem is the financial equivalent of credit bureaus. Numerous banks will also check your credit to discover whether you have a history of difficulty repaying debts. These credit checks are typically "soft" draws that do not harm your credit—but if you're concerned, ask. You don't always need strong credit to open a bank account, but adverse credit can often result in denials.
Consent to the TermsYou must agree to follow certain rules and accept responsibility for specific behaviors in your accounts. When you create a bank account, you establish a relationship based on an important subject: your money. As a result, you should know what you're getting yourself into. If you make a bank account online, you'll finish this step by clicking the "I Agree" (or equivalent) button and proceeding to the next. If you open an account in person at a branch, you will almost certainly be required to sign a printed contract.
Under 18?If you are a minor, you must have someone over 18 open the account. You may still be able to use a debit card and online banking, and you may eventually be allowed to open your account.
Joint AccountsIf you're starting a joint account of any kind, you'll need the personal information and signatures of all account holders. If feasible, gather everyone in one location to finish the application. Although disclosures have improved over time, when opening a bank account, there are much critical data buried in the fine print. You'll want to know about any costs associated with your account, as well as when your funds will be ready for withdrawal. Federal law, in addition to bank agreements, governs your rights and responsibilities as an account holder. For example, if someone fraudulently withdraws funds from your account, you may be protected from damages. However, to receive complete protection, you may need to disclose the withdrawal as soon as possible.
Print, Sign, and Mail (If Required)You can do anything online. Before creating a bank account online, you may be required to print, sign, and mail a document to the bank. Some banks employ electronic disclosure and consent to bind the banking relationship legally. Others continue to require a signed document to open an account. Your account will be inactive until the bank receives the documentation.
Fund Your AccountWhen you make checking or savings account, you'll usually need to make an initial deposit. This is sometimes necessary as part of the account opening procedure, and other times it can be done once the account is up and running. There are various methods for funding your account:
- Deposit cash: The funds should be available within a few business days after making the deposit.
- Make a deposit using a cheque or money order: After you make the deposit, the funds should be accessible within a few business days.
- Establish direct deposit with your employer: If your firm provides this benefit, your earnings will be deposited immediately into your new account rather than being mailed to you.
- Electronic funds transfer: If you have one, you can transfer funds from it to make your initial deposit.
Start Using the AccountIf you performed all of the processes correctly, you should now have a new bank account in your name. It should be ready to use in a matter of minutes to days. Be alert for a debit card (or ATM card) in the mail for checking and savings accounts. You might also want to get a checkbook so you can write cheques. To get the most out of your account, sign up for (generally free) account services that will assist you in managing your money, especially if you have access to a computer or mobile device:
- Online bill pay: You can use this tool to pay invoices electronically.
- Remote check deposit: You may be able to deposit checks remotely using your bank's mobile app, eliminating the need to explore a branch or fill out deposit slips.
- Alerts: Sign up for SMS or email alerts to get notified when your account balance is low (or when large withdrawals happen).