For most people, opening a bank account is a pretty quick and painless process. You'll need to give some information about yourself and maybe show some ID.
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Whether it’s a checking account or savings account, bank accounts are generally pretty easy to open. For most people, all you need is to do is provide some basic information and make a deposit to fund the account. You can often open a bank account online without ever visiting a branch location.
You’ll also need to provide identifying documents, such as a driver’s license. If you’re opening a joint account, like for you and your spouse, you’ll need to provide the other account owner’s info as well. This guide describes everything you need to open a checking or savings account.
Other types of financial products, like credit cards and loans, might be difficult to apply for and use if you don’t have great credit. But your credit doesn’t factor in when you open a bank account. That makes a checking or savings account a great place to start when building up your financial health.
The first thing you need to before opening a bank account is make sure you actually have cash to deposit. Many banks and credit unions require you to make a minimum deposit at the same time you open the account. Others may allow you to open the account without any money as long as you make a deposit later.
Depending on the bank (or credit union) and the type of account, you could also be required to maintain a minimum balance. Failure to do so could result in fees.
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You’ll probably be able to waive the minimum deposit requirement if you sign up for direct deposit, which is the option to have your wages and other types of payments deposited directly into your account.
Many banks will give you a free couple of hundred dollars or more favorable interest rates if you make a large initial deposit or sign up for direct deposit with them.
When opening the account, your bank or credit union will ask you several basic questions. You’ll need to provide the following information to open the account:
Your name, address, and birthday
Your Social Security number
Your individual taxpayer identification number (ITIN) if you’re not a citizen or don’t have a Social Security number
Your home address and email address
When opening a joint account, you may need to provide the same information above about the account’s co-owner.
If you don’t have an active account with the bank, you’ll likely be asked to start a new online banking account. That means creating a new username, password, and security questions to protect your account.
You’ll be asked to show identification when you open bank account. For U.S. citizens, this means a government-issued ID with your photo on it, such as the following:
Non-U.S. citizens can open a bank account at virtually any U.S. bank, too. The type of ID they must present depends on their residency status:
Permanent resident status: Permanent Resident Card (“Green Card”)
Non-permanent resident status: Passport from country of nationality
Some types of bank accounts, like business checking and savings accounts, require two forms of ID: a state ID and a secondary form of identification, like a credit card, utility bill, or an employer ID.
On a jointly owned account, the co-owner will also have to provide his or her ID if requested by the bank.
Interest is money you get from your bank or credit union for keeping your money in an interest-bearing account.
When you open a bank account, you’ll have several options. A checking account usually doesn’t provide interest (although more and more do), but the money in one is easiest to access. A savings account has some limitations on accessing the money in it, but in return you’ll enjoy a higher interest rate.
There are different types of savings accounts, including the conventional personal savings account, the money market account, and the certificate of deposit (CD). Banks often offer wildly different interest rates compared to each other, so it pays — literally — to shop around. Our partner Fiona can help you compare savings accounts and interest rates from several different banks at once.
You’ll also be eligible for higher interest rates if maintain a higher minimum balance, or, in the case of a CD, if you choose to keep the money in for a longer term.
|Type of Account||Interest Rates|
|Checking||0.00% to 1.00%|
|Personal savings||0.01% to 2.50%|
|Money market||0.90% to 2.45%|
|Three-month CD||0.05% to 2.50%|
|One-year CD||1.00% to 2.80%|
|Five-year CD||1.15% to 3.10%|
|10-year CD||1.50% to 3.15%|
There are sometimes fees associated with using a bank account. As with the best interest rates, shopping around for banks with the least fees could be beneficial for your wallet.
Most conventional bank accounts, like your typical checking or savings account, don’t cost anything to open. But you could be paying some of the following fees:
Overdraft fee — also called the nonsufficient funds fee, charged when you spend more than you have in your account
Returned deposit fee — charged when you try to deposit a check and it bounces because the check writer’s account doesn’t have enough funds
Minimum balance fee — charged when you don’t keep above a certain amount of money in your account; usually waived if you have direct deposit or a student bank account
Excessive transactions fee — charged against your savings accounts and money market accounts when you exceed six transactions per month (some transactions, like using an ATM, don’t count toward the six)
Early-withdrawal penalty — charged against CD accounts when you withdraw the principal balance from the account before the maturity period ends
Some types of accounts may require fees from the start, in return for even higher interest than free checking or savings accounts. These accounts, like Betterment’s Smart Saver account, are more like investment accounts that invest in various funds and securities.
You can open a bank account for someone else, but only if you are a co-owner of the account. If opening the account at a branch location, you will have to bring the other person with you. You can’t open an account for another person if he or she is the sole owner of the account, even if you are related.
Certain accounts can be opened on behalf of someone else, but he or she wouldn’t be able to use the funds right away, such as:
Money gifted to a minor under the Uniform Gifts to Minors Act (UGMA) or Uniform Transfers to Minors Act (UTMA), which is overseen by a custodian. The money may not be spent for anything other than child’s necessary expenses, and can be accessed by the child when he or she reaches the age of majority.
The age of majority is either 18 or 19 in all states and 21 in Puerto Rico, with some exceptions different legal circumstances, such as receiving child support.
You can also establish a trust with specific terms on how someone else can access the money. You can create a bank account — it can be anything from a checking account, savings account, or CD — owned by the trust and overseen by the trustee. The beneficiaries of the trust won’t own the account until the trustee transfers ownership to them.
While it’s rare, it’s possible to get denied when you try to open a deposit account at a bank or credit union. That’s because a third party, most often a private company called ChexSystems, monitors account holders for suspicious activity, such as unpaid nonsufficient funds charges, frequently bounced checks, or making fraudulent deposits.
If you were flagged in ChexSystem’s database, you may be unable to open a new bank account even if you resolve the issue after finding out. The derogatory mark will stay on your file for up to five years unless you successfully dispute it.
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