What happens when you open a checking account

Opening a checking account means walking into a bank or credit union, or going online, and giving them basic information about yourself so they can set up an account in your name. The bank verifies who you are, runs a background check (usually through a system called ChexSystems), and then gives you a debit card and checks. You can then deposit money and write checks or swipe your card to pay for things.

The whole process takes between 15 minutes and a few days, depending on whether you do it in person or online. If you go in person, you often walk out with a debit card the same day. If you do it online, the bank mails your card to you, which takes a week or two.

Most banks and credit unions offer checking accounts to anyone with a valid ID and a Social Security number or Individual Taxpayer Identification Number (ITIN). Some have minimum balance requirements — meaning you have to keep a certain amount of money in the account, or they charge you a monthly fee. Others have no minimum at all.

Key Takeaways

  • You will need a valid government ID, your Social Security number or ITIN, and proof of your current address to open an account.
  • Banks and credit unions both offer checking accounts, and credit unions often have lower fees and no minimum balance requirements.
  • You can open an account in person at a branch or online through a bank's website, and the process takes 15 minutes to a few days.
  • The bank will check your history using ChexSystems, a system that tracks past banking problems, but most people pass this check without issue.
  • Once your account is open, you can deposit money by direct deposit, at an ATM, or by bringing cash or checks to a branch.

Gather your documents before you go

Banks need to know who you are and where you live. Bring a valid government ID — a driver's license, passport, or state ID card all work. If you do not have a government ID, some banks will accept a tribal ID or a passport card, but call ahead to ask.

You will also need your Social Security number or ITIN. If you do not have either, you can still open an account at some banks and credit unions, but the process is slower and the bank may place limits on how much you can deposit. Ask the bank directly whether they offer accounts for people without a Social Security number.

Finally, bring proof of your current address. A utility bill, lease, or recent bank statement with your name and address on it works. If you do not have one, a letter from a government agency, a pay stub, or a piece of mail from your employer can work too. The document should be dated within the last 60 days.

Choose between a bank and a credit union

A bank is a for-profit business that takes deposits and makes loans. A credit union is a nonprofit organization owned by its members. Both offer checking accounts, but they work differently.

Banks are usually larger and have more branches and ATMs. If you travel or move often, a big bank with locations nationwide might be easier. However, banks often charge monthly fees if you do not keep a minimum balance, and those fees can be $10 to $15 per month.

Credit unions usually have lower fees and no minimum balance requirements. The catch is that they are smaller — you may have fewer branches and ATMs nearby. However, most credit unions are part of a shared branching network, which means you can do basic transactions at other credit unions' branches even if they are not your bank. If you live in a small town or move around, this can be very useful.

To join a credit union, you usually have to meet a membership requirement — for example, living in a certain county or working for a certain employer. Some credit unions have very broad requirements, like "anyone in the state can join." Ask the credit union whether you meet their requirement before you go in.

Open your account in person or online

In person: Walk into a branch during business hours and ask to open a checking account. A banker will ask you questions about yourself, verify your documents, and run the background check. You will sign paperwork and choose a PIN for your debit card. If everything goes smoothly, you walk out with a temporary debit card or a card number you can use right away, and a permanent card arrives in the mail within a week or two.

Online: Go to the bank's website and click "Open an Account" or "New Accounts." You will answer questions about yourself, upload photos of your ID and proof of address, and enter your Social Security number. The bank will verify your information and send you a confirmation email. Your debit card arrives in the mail, usually within 7 to 10 business days. Some banks let you start using your account before the card arrives by setting up a temporary card number.

Opening online is faster if you are busy, but opening in person is faster if you want to use your card right away. If you have never had a bank account before or are not sure what you need, going in person also gives you a chance to ask questions and have someone walk you through the process.

Understand what happens during the background check

When you open an account, the bank runs your name and Social Security number through ChexSystems, a database that tracks banking history. ChexSystems records things like unpaid overdrafts, accounts closed because of fraud, or repeated bounced checks. If you have a clean history, the check takes a few minutes and you will not hear about it again.

If ChexSystems finds something, the bank will tell you. Common reasons for denial are unpaid overdraft fees from a previous account, or an account closed because of suspected fraud. If you were denied, you have the right to see what ChexSystems has on file about you. You can request a free copy of your report at www.chexsystems.com.

If you have a negative mark on your ChexSystems record, some banks will still open an account for you — they just may charge higher fees or require a larger minimum balance. Second-chance banking programs, offered by some banks and credit unions, are designed for people with banking history problems. These accounts often have lower minimums and fewer fees than regular accounts.

Make your first deposit

Once your account is open, you need to put money in it. You have several options. Direct deposit is the fastest and most common way — your employer or a government agency sends your paycheck straight to your account. You give your employer your account number and routing number (both printed on your checks or visible in your online banking), and the money appears in your account automatically.

If you do not have direct deposit yet, you can deposit cash or checks at a branch, at an ATM, or through your phone. Most banks let you photograph a check with your phone and deposit it that way — the bank calls this "mobile deposit." You can also transfer money from another bank account if you have one.

Your first deposit does not have to be large. Many people start with $25 or $50 just to set up the account. Once money is in your account, you can use your debit card to pay for things, withdraw cash at ATMs, or write checks.

Know what fees to watch for

Most checking accounts charge a monthly maintenance fee if your balance drops below a minimum — often $500 or $1,000. However, many banks waive this fee if you set up direct deposit, or if you maintain a certain balance. Some accounts have no monthly fee at all.

Other common fees include overdraft fees (charged when you spend more than you have), ATM fees (charged when you use another bank's ATM), and fees for paper statements or cashier's checks. When you open your account, ask the banker which fees explore to your account and how to avoid them. This information is also in the account agreement, which you will sign.

Credit unions typically have lower fees than banks, and some have no monthly fee at all. If fees are a concern, ask about this before you open the account.

Frequently Asked Questions

Do I need a minimum balance to open a checking account?

No. Many banks require you to keep a minimum balance to avoid a monthly fee, but you do not need a minimum balance to open the account itself. Some banks and credit unions have no minimum balance requirement at all. Ask before you open.

What if I do not have a Social Security number?

Some banks and credit unions will open an account using an ITIN instead. Others require a Social Security number. Call ahead and ask. If you cannot find a bank that will work with you, look for a credit union in your area — they are sometimes more flexible.

How long does it take to open an account online?

The process itself takes 10 to 15 minutes. The bank verifies your information and usually approves you within a few hours. Your debit card arrives in the mail in 7 to 10 business days, though some banks let you use a temporary card number right away.

Can I open an account if I have been denied before?

Yes. If you were denied because of ChexSystems, you can see what is on your report and dispute it if it is wrong. You can also look for a second-chance banking program, which is designed for people with past banking problems. These accounts have higher fees but are easier to open.

What is the difference between a debit card and a credit card?

A debit card takes money directly from your checking account when you use it. A credit card borrows money from the card company, and you pay it back later. Checking accounts come with debit cards. Credit cards are separate and require a separate process.