The main places to open a checking account

You can open a checking account at a traditional bank branch, a credit union, or an online bank. Each route has different requirements, different fees, and different reasons you might choose it. The choice depends on whether you want to walk into a physical location, whether you need a relationship with a local institution, and what fees matter most to your situation.

A traditional bank is what most people think of first — a building with tellers, a branch manager, and a lobby. Banks like Chase, Bank of America, Wells Fargo, and regional institutions like PNC or US Bank operate hundreds or thousands of branches. You can deposit cash and checks in person, speak to someone face-to-face, and get a debit card the same day in many cases.

A credit union is a member-owned financial institution, not a for-profit corporation. You join by opening an account, and you become a partial owner. Credit unions often have lower fees and better interest rates on savings, though they typically have fewer branches than large banks. You access them through their own branch network or through shared branching agreements with other credit unions.

An online bank exists only on the internet — no physical branch at all. Banks like Ally, Charles Schwab, and Discover operate this way. You open the account through their website or app, deposit checks by photographing them with your phone, and manage everything digitally. Online banks usually have no monthly fees and no minimum balance requirements.

Key Takeaways

  • Traditional banks offer in-person service and when ready access to cash, but often charge monthly maintenance fees unless you meet balance or deposit requirements.
  • Credit unions typically charge lower fees and pay better interest rates, but have fewer branches and may require membership in a specific group or community.
  • Online banks have no monthly fees and no minimum balances, but you cannot deposit cash in person and must handle everything through a website or app.
  • You will need a government-issued ID, proof of address, and a Social Security number or ITIN to open an account at any institution.
  • Some banks and credit unions offer second-chance checking if you have a history of overdrafts or negative reports, though fees are usually higher.

Traditional banks and what they cost

Large national banks and regional banks operate the way most people expect: you walk in, sit down with someone, and open an account. They keep your money in their system, they issue you a debit card, and you can deposit cash and checks at any of their branches. If you travel or move, a large national bank means you can still access your money at a branch in a new city.

The trade-off is fees. Most traditional banks charge a monthly maintenance fee — typically $10 to $15 — unless you meet one of their conditions. Those conditions vary: some waive the fee if you keep a minimum balance (often $500 to $1,500), some waive it if you set up direct deposit, some waive it if you maintain a savings account with them. A few banks, like Ally and Charles Schwab, waive it for everyone, but they operate as online banks, not traditional branches.

Overdraft fees are another cost to understand. If you spend more than you have, traditional banks charge $30 to $35 per overdraft. Some banks charge multiple overdrafts in a single day; others cap it at one per day. A few banks, like Ally, do not charge overdraft fees at all. Before you open an account, ask what the overdraft policy is — it matters more than you might think.

Credit unions: membership, access, and fees

A credit union works differently because it is owned by its members. You do not buy stock; you become a member by opening an account. The institution is run by a board elected by members, and profits are returned to members through lower fees and better rates. The catch is that you have to be may be able to access to join — credit unions serve specific groups, communities, or employers.

Some credit unions are open to anyone who lives or works in a particular county or region. Others serve employees of a specific company, members of a union, or people who work in a particular industry. A few serve students at a university or members of a religious organization. Before you can open an account, you have to meet the membership requirement. If you do not, you cannot join that credit union, though you may be able to join a different one.

Once you are a member, credit unions typically charge lower fees than banks. Many have no monthly maintenance fee at all, or charge one only if your balance falls below a certain amount. Overdraft fees are often lower — $25 to $30 instead of $35. Credit unions also tend to pay higher interest on savings accounts, though the difference is usually small. The downside is that credit unions have fewer branches and ATMs than large banks, though most participate in shared branching networks that let you use other credit unions' branches.

Online banks: no fees, no branches, all digital

An online bank has no physical location. You open the account on their website or mobile app, you deposit checks by taking a photo of them, and you manage your money entirely through digital channels. Online banks like Ally, Charles Schwab, Discover, and Chime operate this way. Because they have no branch overhead, they pass the savings to you: most charge no monthly fee and have no minimum balance.

The main limitation is that you cannot deposit cash in person. If you receive cash regularly and need to deposit it, an online bank is not practical unless you have another way to convert that cash to a check or transfer. Some online banks partner with retailers like Walmart or CVS to let you deposit cash at the register, but not all do. Check the specific bank's policy before you open an account.

Online banks also tend to have better overdraft policies. Ally and Charles Schwab do not charge overdraft fees at all. Others charge them but at lower rates than traditional banks. The trade-off is that if you need to speak to someone in person, you cannot — you have to call, email, or use their chat feature. Most online banks have good customer service, but it is not the same as walking into a branch.

What you need to open an account

Every bank and credit union will ask for the same basic information. You will need a government-issued photo ID — a driver's license, passport, or state ID card. You will need proof of your current address, which can be a utility bill, lease, mortgage statement, or bank statement dated within the last 60 days. You will need your Social Security number or an Individual Taxpayer Identification Number (ITIN) if you do not have a Social Security number.

Some institutions also run a background check using ChexSystems, a database that tracks banking history. If you have had accounts closed due to fraud, unpaid fees, or repeated overdrafts, ChexSystems will flag it. This does not automatically disqualify you — many banks still open accounts for people with ChexSystems records — but some do not. If you have been denied before, look for banks that offer second-chance checking, which is designed for people with banking history issues.

You may also be asked about your employment and income, though this is less common for checking accounts than for credit products. Be honest about what you report — banks verify income for fraud detection, and lying on a bank process is a federal crime.

Second-chance checking if you have banking history issues

If you have been denied a checking account or had an account closed, second-chance checking programs exist specifically for that situation. Banks like Chime, LendingClub, and some regional banks offer them. These accounts are designed for people with negative ChexSystems records or a history of overdrafts and fees.

The catch is that second-chance accounts usually come with higher fees and lower limits. You might have a daily spending cap of $500 or $1,000, a monthly fee of $15 to $25, and stricter overdraft policies. Some second-chance accounts do not come with a debit card, or the card is issued after a waiting period. Despite the restrictions, a second-chance account can help you rebuild your banking history and eventually move to a standard account.

Before you open a second-chance account, compare the fees across institutions. A $20 monthly fee adds up to $240 a year. Some second-chance programs are much cheaper than others, and a few online banks have no monthly fee even for people with banking history issues.

How to decide between your options

Start by asking yourself what matters most. If you deposit cash regularly and want to speak to someone in person, a traditional bank or credit union with a branch near you is the right choice. If you want the lowest fees and do not need to deposit cash, an online bank is usually better. If you want a middle ground — lower fees than a traditional bank but access to branches — a credit union is worth exploring.

Next, check whether you are may be able to access for a credit union. Search for credit unions in your area using the CO-OP Network locator or the Alliant Credit Union locator. Many people are may be able to access for at least one credit union without realizing it — may be able to access is often broader than people assume.

Then, compare the specific fees at institutions you are considering. Look at the monthly maintenance fee, the overdraft fee, the ATM fee if you use out-of-network ATMs, and the minimum balance requirement. Add up what you would actually pay in a year based on your habits. A bank with a $12 monthly fee but no overdraft fee might cost less than a bank with no monthly fee but a $35 overdraft fee, depending on how often you overdraft.

Frequently Asked Questions

Can I open a checking account online if I do not have a physical address?

Most banks and credit unions require a current address for verification purposes. If you are homeless or living in a shelter, some institutions will accept a shelter address or a mail forwarding address. Call ahead and explain your situation — many banks have policies for this, though they vary.

What if I do not have a Social Security number?

You can open a checking account with an Individual Taxpayer Identification Number (ITIN) instead. Not all banks accept ITINs, so you will need to call and ask before you go in. Credit unions and some online banks are more likely to accept them than large national banks.

How long does it take to open a checking account?

At a branch, it usually takes 15 to 30 minutes. Online, it can take as little as 5 minutes, though some banks verify your identity by mailing you a code or asking you to upload documents, which adds a day or two. You can usually start using your account the same day you open it, even if your debit card has not arrived yet.

Do I have to keep a minimum balance?

It depends on the bank. Many traditional banks waive their monthly fee if you keep a minimum balance, typically $500 to $1,500. Credit unions and online banks often have no minimum balance at all. Check the specific institution's requirements before you open an account.

What happens if I close my account soon after opening it?

Most banks do not charge a fee for closing an account, but some charge an early closure fee if you close within 90 days or 6 months. Check the account terms before you open it. If you are unhappy with the account, call and ask whether they will waive the fee — many will if you explain the situation.