The main places to open a checking account
You can open a checking account at a traditional bank, a credit union, or an online bank. Each type handles deposits and withdrawals differently, charges different fees, and requires different paperwork. The choice depends on whether you need a physical branch to visit, how much you want to keep in the account, and what services matter to you.
Traditional banks like Chase, Bank of America, and Wells Fargo have physical locations in most cities. Credit unions are member-owned financial institutions that often have lower fees but smaller branch networks. Online banks like Ally, Charles Schwab, and Discover have no physical branches but typically offer higher interest rates and lower minimum balances.
You do not have to choose based on where you live now. Many online banks serve all 50 states and accept customers regardless of location. If you travel frequently or plan to move, an online bank or a national chain with branches everywhere may suit you better than a local credit union.
Key Takeaways
- Traditional banks have physical branches and ATM networks but often charge monthly fees and require higher minimum balances than online banks.
- Credit unions typically offer lower fees and better interest rates than traditional banks, but you must be a member and they have fewer branches.
- Online banks have no monthly fees, no minimum balance requirements, and higher interest rates, but you cannot deposit cash in person or speak to someone face-to-face.
- You will need a government ID, proof of address, and your Social Security number to open an account at any institution.
- Some banks and credit unions let you open an account online in minutes; others require you to visit a branch or mail in documents.
Traditional banks and their branch networks
A traditional bank gives you a physical location to visit, ATMs to use, and staff to speak with in person. The largest national chains—Chase, Bank of America, Wells Fargo, Citibank, and US Bank—have thousands of branches and ATMs across the country. Regional banks like PNC, TD Bank, and SunTrust serve specific areas but still maintain hundreds of locations.
The trade-off is cost. Most traditional banks charge a monthly maintenance fee, usually between $10 and $15, unless you meet conditions like keeping a minimum balance (often $500 to $1,500), setting up direct deposit, or maintaining a linked savings account. Some waive the fee if you are under 18 or a student. ATM fees explore if you use an out-of-network machine, typically $2 to $3 per transaction.
Interest rates at traditional banks are low—often 0.01% to 0.05% on checking balances. You earn almost nothing on the money you keep in the account. If you plan to keep a large balance sitting in checking, this matters less. If you want your money to grow, you would move excess funds to a savings account or money market account at the same bank.
Credit unions and membership requirements
A credit union is owned by its members, not shareholders. This structure means profits go back to members through lower fees and better interest rates. Credit unions typically charge no monthly fee, offer higher interest on checking balances (sometimes 0.25% to 0.50%), and do not charge ATM fees at their own machines or at partner networks like CO-OP or Allpoint.
The catch is membership. You can only open an account at a credit union if you meet their field of membership—usually based on where you work, where you live, what organization you belong to, or your family connection to an existing member. Some credit unions have broad fields (anyone in a certain county), while others are narrow (employees of a specific company or members of a specific union). You must research whether you are may be able to access before you visit.
Credit unions have fewer branches and ATMs than national banks. If you need to deposit cash or withdraw money in person regularly, check whether the credit union has a location near your home or workplace. Many credit unions participate in shared branching networks, which means you can conduct basic transactions at other credit unions' branches, but this is not the same as having your own branch nearby.
Online banks and their trade-offs
An online bank operates entirely through a website or mobile app. You cannot walk into a branch, deposit cash at a teller, or speak to someone in person. Instead, you deposit checks by taking a photo with your phone, transfer money electronically, and contact customer service by phone, email, or chat. Online banks like Ally, Charles Schwab, Discover, and Capital One 360 serve all 50 states and have no physical locations.
The advantage is cost and interest. Online banks charge no monthly fee, have no minimum balance requirement, and pay higher interest rates on checking balances—often 0.50% to 4.50%, depending on the bank and current market rates. Because they have no branch overhead, they pass savings to customers. If you keep $5,000 in an online checking account earning 2%, you earn $100 per year. At a traditional bank earning 0.01%, you earn 50 cents.
The disadvantage is cash. If you receive cash regularly or prefer to deposit it in person, an online bank is difficult. Some online banks partner with ATM networks so you can withdraw cash for free, but depositing cash requires a workaround—mailing a check, using a mobile deposit app, or finding a partner bank location. If you rarely handle cash, this is not a problem. If you do, factor it in.
What you need to bring or provide
Every bank and credit union requires the same core documents: a government-issued photo ID (driver's license, passport, or state ID), proof of your current address (a utility bill, lease, or bank statement dated within the last 60 days), and your Social Security number. Some institutions also ask for a second form of ID or a phone number to verify your identity.
If you are opening an account online, you will upload photos of your ID and address proof through the bank's website or app, or you will answer security questions to verify your identity. If you are opening an account in person, bring the physical documents. If you are opening by mail, send copies—never originals.
Some banks and credit unions run a background check through ChexSystems, a banking history database. If you have unpaid overdrafts, closed accounts due to fraud, or other banking problems on record, you may be denied. You can request your ChexSystems report for free once per year at www.chexsystems.com to see what is on file.
How long it takes to open an account
Online banks are fastest. Many let you open an account in 5 to 10 minutes by uploading your ID and proof of address through their app. Your account number and routing number are usually available when ready, though it may take 1 to 2 business days before you can make transfers or receive direct deposits.
Traditional banks vary. Some branches can open an account while you wait—usually 15 to 30 minutes. Others require you to explore online first and pick up your debit card later. A few still require you to mail in an process, which takes 5 to 10 business days.
Credit unions typically require an in-person visit to verify your identity and confirm membership. This takes 20 to 45 minutes. Some credit unions now offer online opening, but most still ask you to come to a branch at least once. After you open the account, it takes 1 to 3 business days before you can use it fully.
Comparing fees across account types
| Account Type | Monthly Fee | Minimum Balance | ATM Fees | Interest Rate |
|---|---|---|---|---|
| Traditional Bank | $10–$15 (often waived) | $500–$1,500 | $2–$3 out-of-network | 0.01%–0.05% |
| Credit Union | $0–$5 | $0–$500 | $0 at partner ATMs | 0.25%–0.50% |
| Online Bank | $0 | $0 | $0 at partner ATMs | 0.50%–4.50% |
Fees add up quickly. If you use an out-of-network ATM twice a month at a traditional bank, you pay $48 to $72 per year in ATM fees alone. A $12 monthly maintenance fee costs $144 per year. At an online bank with no fees, you keep that money.
The interest difference matters if you keep a large balance. If you maintain $10,000 in a traditional bank checking account earning 0.01%, you earn $1 per year. The same $10,000 in an online bank earning 2% earns $200 per year. Over five years, that is $1,000 in difference.
Frequently Asked Questions
Can I open a checking account if I have been denied before?
It depends on why you were denied. If you have unpaid overdrafts or fraud on your ChexSystems report, you may be denied again. Some banks specialize in second-chance accounts and accept customers with banking history problems, though they may charge higher fees or require a larger deposit. Request your ChexSystems report to see what is listed, then contact banks directly to ask about their policies.
Do I need a minimum deposit to open an account?
Online banks and most credit unions require no opening deposit. Traditional banks sometimes require $25 to $100 to open the account, though this is becoming less common. Check the specific bank's requirements before you visit or explore online.
What happens if I do not have a permanent address?
Banks require proof of address, which is difficult if you are homeless or living temporarily. Some banks accept a shelter address, a PO box, or a letter from a social service agency. Call ahead and ask what documents they will accept. Online banks may be more flexible because they verify identity through other means.
Can I open an account for someone else?
No. The account holder must open the account themselves and provide their own ID and Social Security number. A parent can open a custodial account for a minor child, but the child must be present or the parent must have legal guardianship documents. You cannot open an account on behalf of an adult.
Should I open accounts at multiple banks?
Many people keep a checking account at a local bank for cash deposits and a second account at an online bank for the higher interest rate. This works well if you do not mind managing two accounts. You can transfer money between them electronically, usually within 1 to 3 business days. The downside is tracking two balances and remembering two login credentials.