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How to open a bank account

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Having a bank account makes it easy to take care of everyday business such as paying bills, depositing paychecks or saving money.  Opening a bank account is simple as long as you come prepared.

What you need to open a bank account

When you open a bank account, the bank will ask you to fill out an application. Whether you are applying for an account online or inside a branch, you will need:

  • Identification: The bank will want to verify that you are who you say you are before it opens an account for you. Expect to provide a government-issued photo ID, such as a driver’s license or a passport.
  • A Social Security number: If you don’t have a Social Security number, you can ask the IRS to provide you with a taxpayer identification number, or TIN.
  • Deposit money: How much money you will need to open the account depends on the bank and the type of account you’re opening. But you’ll generally need to make an initial deposit.

Find a bank or credit union

One of the first decisions to make is whether you want to go with a bank or a credit union. The two institutions might seem alike, but there’s a big difference in how they are run.

Banks are privately owned, for-profit businesses, whereas credit unions are not-for-profit institutions owned by their members, called shareholders. Credit unions have criteria for membership that is often tied to where members work or affiliation with certain organizations. Banks tend to charge higher fees and pay less interest than credit unions because they are in the business of making money.

To help you make a decision, ask institutions about their fees. Are there monthly account fees? What’s the charge for using another bank’s ATM? Ask to see the fee schedule for a complete list of charges.

Another key consideration is whether you want branch banking, online banking or a combination of the two. Do you like the time-saving convenience of banking online? Or do you prefer being able to go inside a branch for certain things? Do you want to do business with a community bank in your area or do you need a bank with a global presence because you travel a lot? Taking into consideration your lifestyle and comfort level with digital banking versus branch banking can help you decide.

Finally, make sure that whatever bank or credit union you choose is insured by the Federal Deposit Insurance Corp. or the National Credit Union Administration’s Share Insurance Fund. These agencies insure up to $250,000 per depositor.

Choose checking or savings – or both

The next step in opening a bank account is deciding which type of account to open. For daily transactions, you’ll want a checking account. Checking accounts usually don’t earn interest — although some do — and are designed for routine tasks like paying bills and depositing paychecks. Most checking accounts also come with a debit card, which is used to make purchases or withdraw money from an ATM.

Open a savings account if you need a safe place to stash cash for emergencies or money you’re saving for other goals. Savings accounts are interest-bearing, so it pays to shop for a savings account with a high yield.

It’s best to have both a checking account and a savings account. There are advantages to having them at the same bank or credit union.

  • It’s easier to keep track of your money at one bank, using one login and one mobile app.
  • Some banks let you use your savings account as protection against checking account overdrafts.
  • It’s easier to set up transfers from a checking account to a savings account.
  • Customers with more than one account at a single bank may qualify for certain benefits if they meet balance thresholds, sometimes referred to as relationship balances. They may get lower interest rates on loans, higher yields on savings, fee waivers and other perks.
  • Having your accounts at one bank simplifies doing your taxes.

Visit a branch or website

Once you’ve chosen a bank, you can open your account by going inside a branch during business hours or visiting the bank’s website. Have your ID, personal information and opening deposit money at hand.

If you choose to open an account at an online-only bank, it’s best to do it during hours when bank customer service representatives are available, in case you run into a problem or have a question. You may have to mail the bank a money order, cashier’s check or make an electronic transfer from another account if an opening deposit is required.

Minors under age 18 generally cannot open a bank account without an adult. In the case of joint accounts, the personal information, identification and signatures of all account holders is required.

Fill out the application

You’ll be required to fill out an application to open a bank account. The application will ask for personal information, such as your name, birth date, address, telephone number and Social Security number or taxpayer identification number (TIN). Some banks want to see a utility bill or other document that verifies your address.

You might also have to provide information about your employment and income sources.

If it’s a joint account you’re opening, the bank will require all this information and a signature from each party.

Banks may check your credit history before accepting your application. And most banks use a reporting agency called ChexSystems, which tells them if you have a history of misusing bank accounts. If you have a record of overdrawing accounts, unpaid bank fees, forced account closures and other behaviors that banks consider risky, you may be rejected.

In that case, you would have to apply for a second-chance checking account, which gives those with a negative banking history a chance to stay in the banking system and prove that they can handle a bank account responsibly.

Bottom line

Having a bank account makes life easier. Everyday transactions are simpler and less expensive than buying money orders or using other means to handle cash.

Most banks and credit unions explain on their websites how to open an account and what information is needed. Requirements for opening a bank account are usually easy to meet. And using a bank account to deposit money, save money and make payments is safer than dealing with cash.

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Written by
Libby Wells
Contributing writer
Libby Wells covers banking and deposit products. She has more than 30 years’ experience as a writer and editor for newspapers, magazines and online publications.
Edited by
Wealth editor