What happens when you open a bank account

Opening a bank account means you give a bank or credit union your personal information, they verify who you are, and then you get access to a checking or savings account where you can deposit money, write checks, use a debit card, and move money electronically. The bank holds your money, keeps it separate from their own funds, and pays you a small amount of interest on savings accounts (though the rate varies widely). You can start using the account within a few hours to a few days, depending on the bank.

The process itself is straightforward: you'll need to prove your identity with a government-issued ID, provide your Social Security number or tax ID, and give the bank your contact information. Some banks let you do this entirely online; others require you to visit a branch in person. Once the bank confirms your information, your account is active and you can start depositing money.

Key Takeaways

  • You will need a government-issued photo ID, your Social Security number, and a way to verify your address (like a utility bill or lease) to open an account.
  • Online banks often have lower fees and higher interest rates than brick-and-mortar banks, but you cannot deposit cash in person.
  • Credit unions typically offer lower fees and more personalized service than large banks, but you must live or work in their service area to join.
  • If you have had banking problems in the past, you may still open an account at a bank that specializes in second-chance checking.
  • The entire process usually takes 15 minutes to an hour, and you can begin using your account the same day or within 24 hours.

What documents you need to bring or provide

The bank will ask for three main things: proof of identity, proof of your Social Security number, and proof of your address. For identity, bring a government-issued photo ID such as a driver's license, passport, or state ID card. If you do not have a photo ID, some banks will accept a combination of documents like a birth certificate plus a utility bill, though this varies by bank.

For your Social Security number, you can provide your Social Security card, a tax return, a W-2 form, or a letter from the Social Security Administration. If you do not have a Social Security number, you may be able to open an account with an Individual Taxpayer Identification Number (ITIN), but not all banks offer this — call ahead to ask.

For your address, bring a recent utility bill, lease agreement, mortgage statement, or bank statement in your name. The document usually needs to be dated within the last 60 days. If you are homeless or do not have a permanent address, some banks and credit unions will work with you using a shelter address or a trusted contact's address — ask the bank directly what they accept.

Opening an account online versus in person

Online banks let you open an account from your computer or phone in about 10 to 15 minutes. You upload photos of your ID, enter your information, and the bank verifies you electronically. Your account is usually ready to use within a few hours. Online banks typically charge no monthly fees and pay higher interest on savings, but they have no physical branches, so you cannot deposit cash in person or speak to someone face-to-face.

Banks with physical branches let you open an account in person, which means you can ask questions and have someone walk you through the process. You can also deposit cash when ready. The downside is that many brick-and-mortar banks charge monthly maintenance fees (though these are often waived if you keep a minimum balance or set up direct deposit). In-person accounts usually take 30 minutes to an hour to set up.

If you are new to banking or uncomfortable with technology, opening in person may feel less risky. If you want lower fees and do not need to deposit cash often, an online bank may save you money. Many people use both — a brick-and-mortar bank for cash deposits and an online bank for savings.

Credit unions as an alternative to banks

A credit union is a nonprofit organization owned by its members (the people who bank there) rather than by shareholders. Credit unions typically charge lower fees, pay higher interest on savings, and offer more flexible lending than banks. Many credit unions will work with people who have had banking problems in the past.

To join a credit union, you must meet their membership requirements. Some credit unions serve people who work for a specific employer, live in a specific county, belong to a specific organization, or have a family member who is already a member. You can search for credit unions in your area using the CO-OP Network locator or the Alliant Credit Union locator online.

The process for opening an account at a credit union is similar to opening one at a bank — you provide ID, your Social Security number, and proof of address. Many credit unions let you open an account online, though some still require an in-person visit. Credit unions are insured by the National Credit Union Administration (NCUA), which means your money is protected the same way it is at a bank.

Second-chance checking if you have banking history issues

If you have been denied a bank account because of a previous banking problem — such as unpaid overdraft fees, a closed account due to fraud, or a record in ChexSystems (a banking history database) — you still have options. Some banks and credit unions offer second-chance checking accounts designed for people in this situation.

Second-chance accounts usually come with higher fees, lower spending limits, and a waiting period before you can write checks or use a debit card. However, they give you a way to rebuild your banking history. After 12 to 24 months of responsible use, you can often move to a regular account with lower fees.

To find a second-chance account, search online for "second-chance checking" plus your state name, or call local credit unions and ask if they work with people who have ChexSystems records. Some banks that offer second-chance accounts include Chime, LendingClub, and various regional banks — availability varies by location. You can also request your ChexSystems report for free to see what is on file and dispute any errors before you explore.

What to do when ready after your account opens

Once your account is open, set up direct deposit if your employer or a government agency (like Social Security) sends you money. Direct deposit means the money goes straight into your account without you having to do anything, and it usually arrives faster than a paper check. Ask your employer or benefits office for the bank's routing number and your account number — both are on your debit card or in your online banking portal.

Set up online banking and a strong password so you can check your balance and move money from anywhere. Most banks let you do this when ready after opening the account. If you plan to write checks, order a checkbook (some banks charge for this, others do not). If you received a debit card, set up it by calling the number on the back or using the bank's app.

Make a small deposit to confirm the account is working. Many banks require a minimum opening deposit, which ranges from zero to $25 depending on the bank. After that, you can deposit money by direct deposit, by transferring from another account, by mailing a check, or (if it is a brick-and-mortar bank) by depositing cash in person.

Fees and costs to watch for

Different banks charge different fees, so compare before you choose. Common fees include a monthly maintenance fee (usually $5 to $15), an overdraft fee (charged when you spend more than you have, typically $25 to $35 per transaction), and an ATM fee (charged when you use an ATM that is not owned by your bank, usually $2 to $3). Some banks waive the monthly fee if you keep a minimum balance, set up direct deposit, or maintain a certain number of debit card transactions per month.

Online banks and credit unions tend to have lower fees than large brick-and-mortar banks. Many online banks charge no monthly fee and no overdraft fees at all. Before you open an account, read the fee schedule on the bank's website or ask in person. The fee schedule is a document that lists every charge the bank can impose — it is required by law and must be given to you before you open the account.

Frequently Asked Questions

Do I need a job to open a bank account?

No. You do not need employment to open an account. You need a government-issued ID, a Social Security number or ITIN, and proof of address. Some banks may ask about your income, but they cannot refuse to open an account solely because you are unemployed.

What if I do not have a Social Security number?

If you have an Individual Taxpayer Identification Number (ITIN), some banks will open an account with that instead. Call ahead to confirm the bank accepts ITINs. If you do not have either, you may still be able to open an account at a credit union or a bank that specializes in serving immigrants — ask what documents they accept.

How long does it take to use my account after I open it?

Online accounts are usually ready within a few hours. In-person accounts are often ready the same day. You can deposit money and use your debit card when ready at most banks, though checks you deposit may take 1 to 5 business days to clear.

Can I open an account if I have been banned from banking before?

Yes. If you were banned from a specific bank, you cannot open an account there, but you can open one at a different bank or credit union. If you have a ChexSystems record, look for a second-chance checking account. Request your ChexSystems report first to see what is listed and correct any errors.

What is the difference between a checking and savings account?

A checking account is for money you use regularly — it comes with a debit card and checks. A savings account is for money you want to keep and earn interest on — it has limits on how often you can withdraw. Many people open both at the same bank.