The main choices are traditional banks, credit unions, and online banks—each with different requirements and what they offer
You can open a bank account at a brick-and-mortar bank branch, a credit union, or an online bank. Each route has different requirements, different fees, and different reasons to choose it. A traditional bank requires you to visit in person and bring identification; a credit union usually requires membership but often has lower fees; an online bank has no branch visits and the lowest fees, but you cannot deposit cash directly. The choice depends on what you actually need to do with your money—not on what sounds easiest in theory.
Key Takeaways
- Traditional banks require a visit to a branch with a government ID and proof of address, but offer cash deposits and in-person help.
- Credit unions often have lower fees and better customer service than banks, but you must be a member and membership rules vary by location and employer.
- Online banks have no monthly fees and higher interest rates on savings, but you cannot deposit cash and customer service is phone or chat only.
- Some banks and credit unions offer second-chance accounts if you have been denied before, though they may have higher fees or lower limits.
- You will need a government ID and proof of address no matter which route you choose; some places accept a utility bill or lease, others require a bank statement.
Opening at a traditional bank branch
Walk into any branch of a bank you recognize—Chase, Bank of America, Wells Fargo, or a regional bank in your area—and ask to open a checking or savings account. Bring a government-issued ID (driver's license, passport, or state ID) and proof of your current address. Proof of address can be a utility bill, lease agreement, or recent bank statement with your name and address on it. The teller or account representative will ask you questions about your employment and income, run a check on ChexSystems (a database of banking history), and then either open the account on the spot or tell you they cannot.
The whole process takes 15 to 30 minutes. You will walk out with a debit card (usually mailed to you within 5 to 10 business days), online banking access, and sometimes a temporary card number you can use when ready. Monthly fees range from zero to $15 depending on the bank and account type. Most banks waive the fee if you keep a minimum balance—often $500 to $1,500—or set up direct deposit. If you need to deposit cash regularly, a traditional bank is your only option among these three.
Joining a credit union and opening an account
Credit unions are member-owned, not-for-profit institutions. You cannot just walk in and open an account; you must first become a member. Membership rules vary wildly. Some credit unions are open to anyone in a geographic area. Others are only for employees of a specific company, members of a specific organization, or people who live or work in a particular county. Some charge a one-time membership fee (usually $5 to $25) and require you to open a savings account with a small deposit ($5 to $25). A few have no membership fee at all.
To find a credit union you can join, use the CO-OP Network locator or the Shared Branch locator on the Credit Union National Association website. Search by your zip code or employer name. Once you find one that will take you, visit a branch with your ID and proof of address. The process is the same as a bank: they run a ChexSystems check and open your account. Credit unions typically have lower monthly fees than banks (many charge nothing), lower overdraft fees, and better interest rates on savings accounts. The trade-off is fewer branches and ATMs, though most credit unions are part of shared branching networks that let you use other credit unions' ATMs for free.
Opening an account with an online bank
Online banks like Ally, Charles Schwab, Discover, and Marcus have no physical branches. You open an account entirely online: upload a photo of your ID, enter your address, answer questions about your income and employment, and fund the account by linking it to an existing bank account or arranging a wire transfer. The whole process takes 10 to 20 minutes. You get a debit card mailed to you, online banking access, and sometimes a temporary card number you can use right away.
Online banks have no monthly fees, no minimum balance requirements, and higher interest rates on savings accounts than traditional banks or credit unions. The catch is that you cannot deposit cash. If you need to deposit a check, you can use mobile check deposit (photograph the check with your phone and upload it). If you need to deposit cash, you cannot use an online bank as your primary account. Some online banks partner with retailers like Walmart or CVS to let you deposit cash at the register, but this is not available everywhere and usually costs a fee. Customer service is by phone, email, or chat—never in person.
What happens if you have been denied before
If you have been rejected for a bank account in the past, it was likely because of a ChexSystems report. ChexSystems is a database that tracks bounced checks, unpaid overdraft fees, fraud, and other banking problems. A negative report stays on file for five years. Some banks and credit unions will still open an account for you despite a ChexSystems report; these are called second-chance accounts.
Chime, LendingClub, and some regional banks and credit unions offer second-chance checking accounts. They typically have higher monthly fees ($5 to $15), lower ATM networks, and lower spending limits than standard accounts. You will still need to bring ID and proof of address. Call ahead or check the bank's website to confirm they offer second-chance accounts before you visit, because not all branches do. If you were denied because of unpaid fees or fraud, paying off what you owe before you explore will improve your chances.
Documents you need and what counts as proof of address
Every bank and credit union requires a government-issued photo ID: a driver's license, passport, state ID card, or tribal ID. Some accept military ID. A few will accept a foreign passport if you do not have a US ID yet.
Proof of address must show your current address and your name. A utility bill (electric, gas, water, internet), lease agreement, or recent bank statement all work. Some banks accept a mortgage statement or property tax bill. A few will accept a cell phone bill or insurance statement. The document must be dated within the last 60 days. If you do not have any of these, ask the bank or credit union what they will accept—some will take a letter from a shelter, a government benefits letter, or a lease signed by a landlord even if it is not notarized. If you are homeless or do not have a permanent address, many banks and credit unions will let you use a shelter address, a PO box, or a friend's address if you can show you receive mail there.
Comparing the three routes side by side
| Feature | Traditional Bank | Credit Union | Online Bank |
|---|---|---|---|
| In-person branch visit required | Yes | Yes | No |
| Membership requirement | No | Yes (varies by union) | No |
| Cash deposits | Yes | Yes | No |
| Monthly fee | $0–$15 (often waived) | $0–$5 (usually free) | $0 (always free) |
| Interest on savings | Very low | Low to moderate | Moderate to high |
| ATM access | Large network | Shared branching network | Limited (partner ATMs) |
| Customer service | Phone, chat, in-person | Phone, chat, in-person | Phone, chat, email |
Frequently Asked Questions
Can I open an account online at a traditional bank?
Some large banks like Chase and Bank of America let you start the process online, but you still need to visit a branch in person to verify your ID and complete the account opening. A few regional banks and credit unions offer fully online account opening, but you will need to upload photos of your ID and proof of address. Check the bank's website to see which option they offer.
What if I do not have a permanent address?
Many banks and credit unions will accept a shelter address, a PO box, or a friend's or family member's address as proof of address. Some will accept a letter from a social services agency or homeless services provider instead of a utility bill. Call ahead and ask what they will accept before you visit.
How long does it take to open an account?
At a branch, the process takes 15 to 30 minutes. Online, it takes 10 to 20 minutes. You will have access to online banking and a temporary card number when ready, but your physical debit card will arrive by mail in 5 to 10 business days.
Do I need to have direct deposit to avoid monthly fees?
It depends on the bank. Some waive fees only if you set up direct deposit. Others waive fees if you keep a minimum balance, use your debit card a certain number of times per month, or maintain a linked savings account. Online banks never charge monthly fees. Credit unions rarely do. Check the specific account terms before you open.
What if I have a bad ChexSystems report?
You can still open an account at banks and credit unions that offer second-chance accounts. These accounts may have higher fees and lower limits. You can also dispute errors on your ChexSystems report by contacting ChexSystems directly. Negative information stays on file for five years, but older items carry less weight.