Banking

How to open a bank account: what you need and what to compare

A bank account is the hub your adult money runs through: your paycheck lands there, rent leaves from there, and it is far cheaper than cashing checks or paying bills with money orders. Opening one takes about twenty minutes. Choosing one that does not quietly charge you every month takes a little more thought.

What you need

Banks and credit unions are required to verify the identity of new customers, so you will be asked for:

Your legal name, date of birth and address.
An identification number: usually your Social Security number; some banks accept an ITIN or, for non-U.S. persons, a passport or other government ID number.
A government photo ID: driver's license, state ID or passport. Some banks ask for a second ID.
An opening deposit: sometimes zero, sometimes $25 to $100, depending on the account.

If you are under 18, most banks require a parent or guardian on the account. Students and young adults can often get accounts with no monthly fee.

What to compare

Feature	Why it matters	What to look for
Monthly maintenance fee	Can cost more per year than everything else	$0, or a fee waived by direct deposit or a modest balance
Minimum balance	Falling below can trigger fees	A minimum you will always meet, or none
ATM access	Out-of-network ATMs can charge twice	Free ATMs near home and work, or ATM fee refunds
Mobile app and deposit	How you will actually use the account	Mobile check deposit, transfers, alerts and card lock
Overdraft policy	Overdraft fees add up fast	Clear choices, low or no fees, and a declined-transaction option
Deposit insurance	Protects your money if the bank fails	FDIC for banks, NCUA for credit unions

Overdraft: decide up front

When you open a checking account and get a debit card, you will usually be asked whether you want overdraft coverage for ATM and everyday debit card purchases. If you say no, a purchase that would overdraw the account is typically declined instead of costing an overdraft fee. You can also opt out later if you said yes. Checks and automatic payments may still be handled under the bank's other overdraft policies, so ask how those work.

Opening the account

You can usually open an account online in a few minutes, or at a branch. Online, you will upload or photograph your ID and fund the account from another account or by mobile check deposit. Once open:

Set up direct deposit with your employer using the routing and account numbers.
Turn on alerts for low balances, large purchases and deposits.
Register the debit card in the app and set a PIN.
Save the bank's real phone number in your contacts, so you can spot calls pretending to be from the bank.

Deposit holds

When you deposit a check, the bank may not make all of the money available right away. Federal rules limit how long a bank can generally hold most deposits, and banks must tell you their hold policy. Do not spend money from a check until the funds are available, and be especially careful with checks from people you do not know, because a check that later bounces is your loss.

If you are turned down

Banks often check a specialty consumer report that records past account problems, such as unpaid overdrafts or accounts closed with a negative balance. If you are denied because of such a report, you can request a free copy from the company that provided it and dispute errors. If the record is accurate, pay or settle what is owed, and ask about second-chance or low-cost accounts that many banks and credit unions offer.

Joint accounts and shared bills

If you share bills with a roommate or partner, you do not need a joint account. Many people keep their own accounts and use one for shared bills that each person transfers into. A joint account gives both people full access to all of the money in it, so open one only with someone you trust completely.

Signs it is time to switch

If you pay a monthly fee every month, pay ATM fees most weeks, or have been hit by overdraft fees you did not expect, compare again. Open the new account first, move direct deposit and automatic payments, wait for every pending payment to clear, and then close the old account.

Account opening checklist

Tick items as you go. Ticks stay on this page only and clear when you leave.

Gather a government photo ID, your Social Security number or other taxpayer ID, and proof of address.
Compare two or three banks or credit unions on monthly fees and minimum balances.
Check the ATM network and mobile deposit features you will use.
Decide on overdraft coverage before you get the debit card.
Confirm the bank is FDIC-insured or the credit union is NCUA-insured.
Set up direct deposit and low-balance alerts after opening.

Questions people ask

What do I need to open a bank account?

Banks must verify who you are, so expect to give your name, date of birth, address and an identification number, and to show a government photo ID. Requirements vary by bank, so check their list before you go.

Should I use a bank or a credit union?

Both can be good. Credit unions are member-owned and sometimes have lower fees; banks may have larger ATM networks and more branches. Compare the specific accounts rather than the type of institution.

How do I avoid overdraft fees?

You can decline to opt in to debit card overdraft coverage, or cancel it if you opted in. Then most debit card purchases that would overdraw your account are simply declined. Low-balance alerts also help.

Why was I denied a checking account?

Banks often check specialty reports that record past account problems such as unpaid overdrafts. You can request your free report from the company used, dispute errors, and ask about second-chance accounts.