Banks, credit unions, and online-only institutions all offer checking accounts, and the choice depends on what you need most: in-person service, low fees, or higher interest rates.

You have three main paths. Traditional banks have physical branches where you can deposit cash and speak to someone in person, but they often charge monthly fees unless you maintain a minimum balance. Credit unions are member-owned and typically charge lower fees, though they have fewer locations and may require you to live or work in a specific area to join. Online banks have no branches but usually charge no monthly fees and offer higher interest rates on deposits—the tradeoff is that you cannot hand cash to a teller.

The account itself is free to open at any of these. What costs money is what happens after: monthly maintenance fees (usually $5 to $15 if you fall below a minimum balance), overdraft fees (typically $30 to $35 per overdraft), and ATM fees if you use machines outside the institution's network. Some accounts waive these fees if you set up direct deposit or keep a certain amount on hand.

Key Takeaways

  • Banks offer branches and in-person service but often charge monthly fees; credit unions charge less but have fewer locations; online banks charge almost nothing but have no physical branch.
  • You will need a government-issued ID, proof of address (a utility bill or lease), and usually a Social Security number or ITIN to open an account.
  • Some banks and credit unions require a minimum opening deposit, usually $25 to $100, though many online banks do not.
  • Monthly fees and overdraft fees vary widely, so compare the institutions you are considering before opening.
  • If you have a history of overdrafts or unpaid fees, some banks will deny you; ChexSystems and Early Warning Services track this, and you can request your report for free.

What you need to bring or have ready

Every institution will ask for a government-issued ID (driver's license, passport, or state ID card) and proof of your current address. A utility bill, lease, or recent bank statement works for the address. You will also need your Social Security number or ITIN (Individual Taxpayer Identification Number). If you do not have a Social Security number, some banks and credit unions will still open an account with an ITIN, but not all—call ahead to confirm.

Some banks and credit unions require an opening deposit before the account is active. This is usually $25 to $100, though a few require more. Online banks almost never require an opening deposit. If you do not have cash on hand, ask whether you can make the deposit by transfer from another account or by check in the mail.

Traditional banks and what to expect

National banks like Chase, Bank of America, Wells Fargo, and Citibank have thousands of branches nationwide. Regional banks like PNC, TD Bank, and SunTrust serve specific areas. The advantage is that you can walk in, deposit cash without a fee, and speak to someone if something goes wrong. The disadvantage is monthly fees: most charge $10 to $15 per month unless you keep a minimum balance (often $500 to $1,500) or set up direct deposit.

Opening an account at a bank takes 15 to 30 minutes in person, or you can start online and finish in a branch. Some banks let you open entirely online, but you will still need to verify your identity—usually by uploading a photo of your ID or visiting a branch within a set number of days. The account is usually active within one business day.

Credit unions and membership requirements

Credit unions are nonprofit institutions owned by their members. They typically charge lower fees than banks and offer better interest rates on savings. The catch is that you must be a member to open an account, and membership is restricted. You might be may be able to access because you work for a specific employer, live in a certain county, attend a particular school, or belong to an organization like the military or a union. Some credit unions have opened their membership to anyone in a geographic area, but this is less common.

To find a credit union you can join, use the CO-OP Network locator or the Shared Branch network on the Credit Union National Association website. Search by your employer, location, or organization. If you find one you are may be able to access for, call and ask what documents you need to bring. Most credit unions require the same ID and address proof as banks, plus proof of membership (a pay stub, school ID, or membership card). Opening an account usually takes 20 to 30 minutes and costs nothing.

Online banks and what changes without a branch

Online banks like Ally, Charles Schwab, Discover, and Chime operate entirely through their website and mobile app. They charge no monthly fees, no minimum balance, and often no overdraft fees (some decline transactions instead of charging). Interest rates on checking accounts are higher than at traditional banks, though still modest. The tradeoff is that you cannot deposit cash directly—you deposit by check (mailed or mobile deposit), transfer from another account, or direct deposit.

If you need to deposit cash regularly, an online bank is harder to use. Some online banks partner with retail chains like Walmart or CVS to let you deposit cash at the register, but this is not universal. Check the bank's website to see whether cash deposit is an option before you open an account.

Opening an account online takes 10 to 15 minutes. You upload a photo of your ID, enter your information, and the account is usually active within one business day. Some online banks require a small opening deposit ($0 to $100); most do not.

If you have been denied before or have banking problems in your history

Banks use two main reporting systems: ChexSystems and Early Warning Services. If you have unpaid overdraft fees, bounced checks, or fraud on an old account, these systems will flag you, and a bank may deny your process. You have the right to a free copy of your ChexSystems report and your Early Warning Services report once per year. Request them at chexsystems.com and earlywarning.com.

If you are denied, ask the bank which system they used and what the reason was. If the report contains an error, you can dispute it. If the information is correct, some banks specialize in second-chance checking—they charge higher fees but will open an account for you. Chime, LendingClub, and some regional banks offer these accounts. You can also try a credit union, which may have less strict policies than large banks.

Comparing accounts before you open

Before you commit, write down what matters most to you: low fees, in-person service, high interest, or ease of use. Then compare three or four institutions on these specifics:

  • Monthly maintenance fee and what waives it (direct deposit, minimum balance, etc.)
  • Overdraft fee and whether the bank declines transactions or charges
  • ATM network and whether out-of-network ATM fees explore
  • Interest rate on the checking balance (usually very low, but online banks pay more)
  • Minimum opening deposit
  • How you deposit cash, if you need to

Most banks and credit unions publish this information on their website under "Checking Account" or "Account Fees." If you cannot find it, call and ask. Do not open an account until you understand what you will be charged.

Frequently Asked Questions

Can I open a checking account online and use it right away?

Yes. Most online banks and many traditional banks let you open an account entirely online, and it is active within one business day. You will need to upload a photo of your ID and provide your Social Security number. Some banks ask you to verify your identity by answering security questions or receiving a code by text or email.

What if I do not have a Social Security number?

You can use an ITIN (Individual Taxpayer Identification Number) instead. Not all banks accept ITINs, so call ahead. Credit unions are sometimes more flexible than large banks. You will still need a government-issued ID and proof of address.

Do I have to keep a minimum balance to avoid fees?

It depends on the account. Many traditional banks waive the monthly fee if you keep $500 to $1,500 in the account. Online banks and many credit unions charge no monthly fee regardless of balance. Check the specific account's fee schedule before you open.

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

Yes, but you may have fewer options. Request your free ChexSystems and Early Warning Services reports to see what is on record. If the information is correct, look for a second-chance checking account from banks or credit unions that specialize in them. These charge higher fees but will work with you.

What is the difference between a checking account and a savings account?

A checking account is for regular spending—you get a debit card and checks. A savings account is for storing money and earns interest, but you cannot spend directly from it. Many people have both at the same institution.