How To Open a Bank Account Online: Everything You Need To Know
Opening a bank account online is easy. If you’re at least 18 years old and have the required legal documents, the process should take only a few minutes. You need a computer or phone to access the internet, and you’re ready — but don’t rush into applying for just any bank account out there.
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This guide takes you through every step of opening an account online. It also explains what type is best for you and how you can get as much as $700 in free cash by opening the right account.
Information Needed To Open a Bank Account
The requirements for opening a bank account include:
Legal name
Contact information
Residential address
Date of birth
Social Security number
Government-issued photo identification, for instance, a driver’s license or passport
How To Open a Bank Account Online:
The steps below will help you understand the different types of bank accounts and how to proceed in applying.
Step 1: Compare Accounts
Savings Account
This is an account where you save money for future use and earn interest on that money. A savings account separates the money you want to save from the funds you regularly use to pay bills.
You can withdraw as much money as you want from a savings account, and the Federal Reserve Board in 2020 ruled that customers can make an unlimited number of transfers or withdrawals for financial hardships related to the current pandemic. It’s also worth noting that the interest you earn from your savings is considered taxable income.
Checking Account
Also called a demand or transactional account, a checking account is commonly used to pay bills and write checks or make debit purchases. You can make deposits and withdrawals, but it’s essential to keep track of fees that may add up due to:
Overdrafts
Bouncing checks
Allowing the account balance to drop below the required minimum
Many types of checking accounts come loaded with numerous features and benefits.
For instance, if you open a checking account for your company, a commercial or business account may come in handy. Spouses, business partners or two family members can open a joint checking account that they can use together.
If you’re a student, check whether your preferred bank offers free checking accounts for college students. However, you may begin incurring fees after graduating.
Certificate of Deposit
A CD allows you to save money that you don’t need to access immediately. It works like a savings account, but it holds a fixed amount of money for a specified time period, such as one year. At the end of the specified period, you receive your initial deposit back, plus the interest earned.
CDs are among the most popular investment options, as some pay higher interest rates than the best savings and money market accounts. Certificates of deposit are also safer, offering a non-volatile, guaranteed rate of return.
Money Market Account
A money market account is a deposit account insured by the Federal Deposit Insurance Corp., just like a CD. These accounts earn interest, often at a higher rate than regular savings accounts, but they usually have certain restrictions such as transfer limits and additional fees.
Step 2: Find Your Bank Online
After you’ve found the best bank for your needs, go to its website. However, before you enter your personal information, take a moment to verify the site’s security. Double-check the URL and look for the padlock symbol in the browser’s navigation bar. The locked padlock sign means the site is safe for you to enter personal information.
Step 3: Complete the Online Application
You’ll need to provide necessary information about yourself such as your name, date of birth, address and Social Security number. Ensure you have this information on hand before you start the application, as the webpage can time out and close if you leave your computer unattended for too long.
After you complete an online application, you’ll get an email from the account provider with information about what happens next. Many online banks offer a live chat feature or phone number you can call if you have questions during the application process.
Some banks process the application immediately, while others may take a few days to review the documentation and issue a decision.
Step 4: Set Up Your New Account
As soon as you receive approval for your account, the bank should send instructions for funding it. In most cases, you can transfer money from another account or mail in a check or money order to make your initial deposit.
If the account you signed up for includes a debit card, your bank will contact you with instructions for how to activate it and set its personal identification number. You may also need to set up online banking and switch any direct debits and automatic payments so they connect with your new account.
Frequently Asked Questions When Opening an Account
Find answers below to some common questions about online banking.
Can I open an account online without going to the bank?
Yes. Many banks and other financial institutions provide an option for their customers to open an account remotely. It typically takes less than 10 minutes to open an account online.
What’s the easiest bank account to open online?
The easiest account to open online is the one that serves your unique needs best. Review different options to help determine the best account for you.
Why should I open a checking account?
A checking account is the best option if you’re looking to:
Pay your bills
Write checks
Make debit card purchases
A good checking account has:
No monthly fees
Low or no overdraft fees
Convenient ATM access
Why should I open a savings account?
A savings account is the best option if you’re looking to:
Build an emergency fund
Save money for specific goals
A good savings account has:
Good interest rates — look for 0.04% or higher. The national average is 0.05%.
No monthly fees
Learn More: BankDirect Review: Competitive Rates, Nationwide Coverage
What should I do if I have challenges opening an account online?
If you experience a problem and can’t seem to get through the account opening process, consider the following steps:
Make sure your credentials are correct.
Check your email and your bank’s social media accounts for official communication.
Get technical support from your bank via chat or phone.
Update your web browser and/or phone software.
Once you choose to open an account online, your bank’s infrastructure should allow you to do it seamlessly. If you continue to experience issues, consider trying another bank.
Pros and Cons of Opening an Account Online
Review these factors to help determine if the perks of online banking outweigh the downsides for you.
Additional Factors To Consider
Before opening an account, it’s advisable to consider factors such as:
How Old Do You Have to Be to Open a Bank Account?
Anyone under age 18 cannot open a bank account without a parent or legal guardian available to co-sign. The majority of banks may require you to visit a local branch to set up this type of account.
Whether You Have Credit
Since most banks verify your identity by doing a soft pull on your credit, you may need to visit a local branch to verify your identity and complete your application process if you haven’t built any credit yet. You may also need to take steps to establish credit, such as applying for a personal loan or a secured credit card.
Whether You’re a US Citizen
Nonresidents may open accounts at some banks in the U.S., but there are extra requirements. You may be required to bring your passport as well as your green card, work visa or student ID to a local branch to verify your identity and complete the application process.
Whether You Need a Minimum Balance
Some banks specify a minimum balance requirement. If the balance falls below this minimum threshold, you’ll have to pay a maintenance fee. With Bank of America’s Advantage Plus checking account, for instance, you pay a $12 monthly fee — but the bank waives this fee if you meet one of the following:
You have an average daily balance of at least $1,500.
You have at least one qualifying direct deposit of $250 or more into the account.
You belong to its Preferred Rewards program.
Promotions: Don’t Miss the Free Money!
Banks will often offer cash bonuses and other promotions to attract new customers. However, many people fail to take advantage of these opportunities because they don’t know where to look. A recent GOBankingRates survey found that most respondents aren’t aware of the deals banks offer and end up missing out on free money.
Research different account bonuses and promotions to find the best deals. At the moment, you can earn up to $700 in free money when you open select checking accounts. The largest checking account bonus offers typically come with higher minimum balance and deposit requirements, but you can also find modest bonuses with less restrictive criteria.
Final Thoughts
Gone are the days of spending an hour in line at the bank waiting to open an account. You can now open a new checking or savings account from your computer or phone in minutes. Don’t miss out on the attractive interest rates, cash rewards and financial security that come with a new bank account.
You’ll also be in a position to track your finances through bank statements that are accessible whenever you need them. Having such control over your money will help you anticipate the future with peace of mind.
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Karen Doyle contributed to the reporting for this article.
Information on promotions is accurate as of March 9, 2021. Additional requirements may apply. Offers and terms are subject to change.
This article originally appeared on GOBankingRates.com: How To Open a Bank Account Online: Everything You Need To Know
