Banks, credit unions, and online-only institutions all offer checking and savings accounts
You have three main places to open an account: a traditional bank with physical branches, a credit union, or an online bank that exists only on the internet. Each works differently, costs different amounts, and gives you different ways to deposit money and withdraw cash. The right choice depends on whether you need to walk into a building to do your banking, how much money you want to keep in the account, and what fees matter most to you.
All three types are insured the same way — your money is protected up to $250,000 by the Federal Deposit Insurance Corporation (FDIC) if you use a bank or online bank, or by the National Credit Union Administration (NCUA) if you use a credit union. That protection is the same whether you open your account in person or online.
Key Takeaways
- Banks with branches let you deposit cash and talk to someone in person, but usually charge monthly fees unless you keep a minimum balance or set up direct deposit.
- Credit unions are member-owned and often charge lower fees, but you can only use branches in their network unless you join a shared branching system.
- Online banks have no monthly fees and higher interest rates on savings, but you cannot deposit cash at a branch and must use ATMs or mail checks to deposit money.
- You will need a government ID, proof of address, and your Social Security number to open an account anywhere, whether in person or online.
- Some banks and credit unions offer second-chance accounts if you have been denied before, though they may have higher fees or lower limits.
Traditional banks with physical branches
A traditional bank is a for-profit company with buildings you can walk into. You can deposit cash at the teller window, withdraw money from an ATM, and talk to someone if you have questions. Banks are everywhere — you have probably seen their signs on your street. The biggest ones are Chase, Bank of America, Wells Fargo, and Citibank, but there are also smaller regional banks in most areas.
The trade-off is fees. Most banks charge a monthly fee (usually $10 to $15) unless you meet one of their conditions. Common conditions are keeping a minimum balance in the account (often $500 to $1,500), setting up direct deposit (having your paycheck sent automatically to the bank), or maintaining a certain number of debit card transactions per month. Read the fee schedule before you open an account — it is usually on their website or available in the branch.
Opening an account at a bank branch takes about 30 minutes. You will need a government-issued ID (driver's license, passport, or state ID), proof of your current address (a utility bill, lease, or recent mail from a government agency), and your Social Security number. Some banks let you start the process online and finish in the branch, or complete it entirely online if you have a camera to verify your ID.
Credit unions
A credit union is a non-profit organization owned by its members — the people who have accounts there. Because they do not aim to make a profit, they often charge lower fees and pay higher interest on savings accounts. Many credit unions have no monthly fee at all, or waive it if you keep a small balance like $25.
The catch is membership. You can only join a credit union if you meet their membership requirement. Some are open to anyone who lives or works in a certain county. Others are only for employees of a specific company, members of a specific organization, or people who work in a specific industry. For example, some credit unions are only for teachers, or only for people who work at a hospital, or only for members of a church. Search "credit unions near me" online, and when you find one, check their website to see if you are may be able to access to join.
Once you join, you can use their branches and ATMs for free. However, their branch network is usually smaller than a bank's. If you need to use ATMs outside their network, ask whether they are part of a shared branching network — a system where credit unions let each other's members use their branches and ATMs. The CO-OP Network and Alliant are the two largest shared branching systems.
Opening an account at a credit union works the same way as a bank — bring your ID, proof of address, and Social Security number to a branch, or complete the process online. Some credit unions take longer to open accounts because they are smaller and process applications by hand.
Online-only banks
An online bank has no physical branches. You do all your banking through a website or phone app — you cannot walk in and talk to someone. The advantage is that online banks have almost no overhead costs, so they charge no monthly fees and often pay higher interest on savings accounts. The disadvantage is that you cannot deposit cash at a branch.
To deposit money at an online bank, you have three options. First, you can transfer money from another account you already have at a traditional bank or credit union. Second, you can mail a check to the bank's address (they provide it). Third, you can use a mobile deposit feature — you take a photo of the front and back of a check with your phone, and the bank deposits it electronically. Not all online banks offer mobile deposit, so check before you open an account if you receive checks.
To withdraw cash, you use an ATM. Most online banks let you use ATMs from a large network for free — for example, Ally Bank lets you use any ATM in the Allpoint network, which has over 55,000 ATMs worldwide. Some online banks reimburse you for ATM fees charged by other banks. Read the fee schedule to see what is included.
Popular online banks include Ally, Charles Schwab Bank, Discover Bank, and Capital One 360. You open an account entirely online using your computer or phone. You will need to verify your identity — most banks ask you to take a photo of your ID with your phone, or answer security questions about your credit history. The whole process usually takes 10 to 15 minutes.
Second-chance accounts if you have been denied before
If you have been denied a bank account in the past, you may still be able to open one. Some banks and credit unions offer second-chance accounts specifically for people who have had problems with banking before. Common reasons for denial are unpaid overdraft fees, a history of bounced checks, or being listed in ChexSystems (a database that banks use to check your banking history).
Second-chance accounts usually have higher fees than regular accounts — you might pay $15 to $25 per month, or per overdraft. They may also have lower limits on how much you can withdraw or how many transactions you can make. However, they let you rebuild your banking history. After a year or two of using the account responsibly, you can often switch to a regular account with lower fees.
To find a second-chance account, call banks and credit unions in your area and ask directly. Some advertise them on their websites under names like "Fresh Start" or "Second Chance Banking." You can also ask a local nonprofit that helps with financial education — they often know which institutions in your area offer these accounts.
What you need to bring or provide
Whether you open an account in person or online, you will need the same three things. First, a government-issued photo ID — a driver's license, state ID card, or passport. Second, proof of your current address — a utility bill, lease agreement, bank statement, or recent mail from a government agency. The address on the mail must match the address you give the bank. Third, your Social Security number.
If you do not have a Social Security number, some banks and credit unions will open an account using an Individual Taxpayer Identification Number (ITIN) instead, though not all do. Call ahead and ask. If you do not have any of these documents, a local nonprofit that helps with financial education or housing can sometimes help you get them.
If you are opening an account online, you will also need a way to verify your identity — usually a camera on your phone or computer so the bank can see your ID, or access to your credit history so they can ask you security questions. Online banks cannot accept documents by mail the way a branch can, so they rely on electronic verification.
Comparing your options at a glance
| Type | Monthly Fee | Deposit Cash | Talk to Someone | Interest Rate |
|---|---|---|---|---|
| Traditional Bank | Usually $10–$15, waived with conditions | Yes, at branch | Yes, at branch | Very low |
| Credit Union | Usually $0–$5 | Yes, at branch | Yes, at branch | Low to moderate |
| Online Bank | $0 | No, mail or transfer only | Phone or chat only | Moderate to high |
Frequently Asked Questions
Can I open an account online if I do not have a camera for my phone?
Most online banks require a camera to verify your ID, but some accept other forms of verification like security questions about your credit history. Call the bank before you try to open an account and ask what verification methods they accept. If you cannot verify online, you can always open an account at a bank or credit union branch in person instead.
What is the difference between a debit card and a checking account?
A checking account is where your money sits. A debit card is a plastic card the bank gives you that lets you spend money from that account. When you open a checking account, the bank will usually give you a debit card automatically, though you can ask not to have one if you prefer to use checks or transfers instead.
Do I need to open a savings account at the same place as my checking account?
No. You can open a checking account at one bank and a savings account at another. Many people open a checking account at a bank with branches (so they can deposit cash) and a savings account at an online bank (so they earn higher interest). Just make sure both institutions are FDIC or NCUA insured.
How long does it take to open an account?
In person at a branch, 20 to 30 minutes. Online, 10 to 15 minutes usually, though some banks take longer if they need to verify your identity by phone. Credit unions sometimes take a few days because they process applications by hand. You can usually start using your account the same day you open it, though some banks hold your first deposit for a few days.
What if I do not have a permanent address?
Some banks and credit unions will accept a temporary address, a shelter address, or a mail forwarding address as proof of residence. Call ahead and explain your situation — many institutions have worked with people in this position before. Some nonprofits that help with housing also help people open bank accounts and can vouch for your address.