How to Open a Bank Account in the United States

Quick answer

• Determine your banking needs (checking, savings, specific features).
• Research banks and credit unions for suitable options.
• Gather required identification documents.
• Understand minimum balance requirements and fees.
• Choose between online banks, traditional banks, or credit unions.
• Complete the application process online or in person.

Who this is for

• Individuals new to managing their finances in the U.S.
• People looking to switch from their current bank to a better option.
• Anyone needing a secure place to store money and manage transactions.

What to check first (before you open a bank account)

Goal and timeline

Before you open an account, consider what you want to achieve with it. Are you looking for a simple checking account for daily expenses, a savings account to build an emergency fund, or an account with specific features like international transfers or high-yield interest? Your timeline also matters. If you need immediate access to funds, an online bank might be faster to set up than a traditional one.

Current cash flow

Understand your income and expenses. This will help you determine the type of account you need. For example, if you have many monthly transactions, you’ll want a checking account with low or no monthly maintenance fees, especially if you can meet any minimum balance requirements. If you’re looking to save, you’ll need to know how much you can realistically set aside each month.

Emergency fund or safety buffer

Do you have an emergency fund in place? A separate savings account can be ideal for this. Having a buffer of 3-6 months of living expenses can prevent you from dipping into other savings or incurring debt. Consider if your new bank account will serve as part of this fund or if you’ll maintain a separate one.

Debt and interest rates

Evaluate any outstanding debts you have. While opening a bank account isn’t directly tied to debt management, understanding your financial picture is crucial. If you have high-interest debt, prioritizing paying that down might be more beneficial than earning minimal interest on savings. Conversely, if you’re looking to save, compare the interest rates offered by different savings accounts.

Credit impact

Opening a bank account generally has no direct negative impact on your credit score. However, some banks may perform a soft credit check when you open an account, which does not affect your score. If you apply for a secured credit card or a credit-builder loan through a bank, that will involve a credit check.

Step-by-step (simple workflow to open a bank account)

1. Define Your Banking Needs

What to do: List the primary functions you need from your bank account (e.g., direct deposit, online bill pay, ATM access, mobile check deposit, savings goals).
What “good” looks like: You have a clear understanding of whether you need a checking, savings, or money market account, and any specific features that are important to you.
Common mistake and how to avoid it: Not considering future needs. Avoid this by thinking about how your financial situation might change in the next year or two.

2. Research Financial Institutions

What to do: Look into different types of institutions: traditional brick-and-mortar banks, online-only banks, and credit unions.
What “good” looks like: You’ve identified a few institutions that seem to align with your needs based on their offerings, fees, and customer reviews.
Common mistake and how to avoid it: Only considering the biggest national banks. Avoid this by exploring local credit unions and online banks, which often offer better rates and lower fees.

3. Compare Account Types and Features

What to do: Examine the specific checking and savings accounts offered by your shortlisted institutions. Pay close attention to monthly maintenance fees, minimum balance requirements, ATM fees, overdraft fees, and interest rates for savings accounts.
What “good” looks like: You’ve narrowed down your choices to 1-2 accounts that best meet your feature requirements and have manageable fees.
Common mistake and how to avoid it: Focusing only on interest rates for savings accounts. Avoid this by also considering the ease of access to funds and any associated fees that could negate your earnings.

4. Gather Required Documents

What to do: Collect necessary identification and personal information. This typically includes a Social Security number (SSN) or Individual Taxpayer Identification Number (ITIN), a valid government-issued photo ID (like a driver’s license or passport), and proof of address (like a utility bill).
What “good” looks like: You have all the required documents readily available, making the application process smooth.
Common mistake and how to avoid it: Not having the correct identification. Avoid this by checking the specific requirements of the bank you choose beforehand.

5. Check for Minimum Opening Deposit

What to do: Determine if the account requires an initial deposit and what the minimum amount is.
What “good” looks like: You know the exact amount needed and have it ready to deposit.
Common mistake and how to avoid it: Assuming no deposit is required. Avoid this by confirming the minimum deposit amount with the bank before you start the application.

6. Choose Your Application Method

What to do: Decide whether to apply online, by phone, or in person at a branch.
What “good” looks like: You’ve selected the method that is most convenient and efficient for you.
Common mistake and how to avoid it: Rushing the application. Avoid this by taking your time and ensuring all information is entered accurately, regardless of the method.

7. Complete the Application

What to do: Fill out the application form accurately and completely with your personal information, SSN/ITIN, and contact details.
What “good” looks like: The application is submitted without errors, and you receive confirmation that it’s being processed.
Common mistake and how to avoid it: Typos or incorrect information. Avoid this by double-checking every field before submitting.

8. Fund the Account

What to do: Make your initial deposit using the method specified by the bank (e.g., transfer from another account, check, cash).
What “good” looks like: Your account is successfully funded, and you have access to your funds and account features.
Common mistake and how to avoid it: Not understanding the funding timeline. Avoid this by asking the bank when the funds will be available for use.

9. Set Up Online Access and Bill Pay

What to do: Create a username and password for online banking and set up any recurring bill payments.
What “good” looks like: You can easily log in to your account online and manage your finances, including paying bills.
Common mistake and how to avoid it: Using weak passwords or not enabling two-factor authentication. Avoid this by choosing strong, unique passwords and activating all available security features.

10. Order Checks and Debit Card

What to do: If you need checks, order them. Activate your debit card once it arrives and set up a PIN.
What “good” looks like: You have your debit card and checks (if ordered) and can use them for transactions.
Common mistake and how to avoid it: Not activating your debit card immediately. Avoid this by following the bank’s instructions for activation upon receipt.

Common mistakes (and what happens if you ignore them)

Mistake	What it causes	Fix
Not checking for monthly maintenance fees	Unnecessary charges that can eat into your balance, especially for low balances.	Research fee structures carefully and choose accounts with no fees or ones you can easily waive.
Ignoring minimum balance requirements	Can result in monthly fees or account closure if not met.	Understand the minimum balance and ensure you can consistently maintain it, or choose a no-minimum account.
Not understanding overdraft policies	High fees for spending more than you have, potentially leading to debt.	Opt-out of overdraft protection or choose an account with a low overdraft fee and clear policies.
Using an ATM outside your bank’s network	Can incur fees from both your bank and the ATM owner.	Stick to your bank’s ATMs or those that offer fee-free access.
Not setting up direct deposit	Delays in receiving paychecks or other funds, and more manual banking tasks.	Arrange for direct deposit with your employer or other payers for convenience and faster fund availability.
Overlooking early closure fees	Charges if you close an account too soon after opening.	Be aware of any such fees and wait the required period before closing an account if necessary.
Not reading the account agreement	Missing important details about terms, conditions, and your rights.	Take the time to read through the account agreement or ask for clarification on confusing terms.
Not considering credit union membership	Missing out on potentially better rates, lower fees, and member-focused service.	Check if you are eligible for membership at local credit unions.
Failing to secure online banking access	Limits your ability to manage your account remotely and efficiently.	Set up online access immediately, use strong passwords, and enable multi-factor authentication.
Not having a backup plan for access	Inconvenience if your primary bank has an outage or you lose your card.	Consider having accounts at two different institutions for redundancy.

Decision rules (simple if/then)

• If your primary goal is daily spending and bill payment, then open a checking account because it’s designed for frequent transactions.
• If you want to save for specific goals or emergencies, then open a savings account because it typically offers interest and is less accessible for impulse spending.
• If you are eligible and prefer a member-owned institution, then consider a credit union because they often offer competitive rates and lower fees.
• If you prioritize convenience and lower fees, and don’t need in-person branch access, then look into online-only banks because they often have lower overhead.
• If you frequently travel internationally, then check for accounts with no foreign transaction fees because these can save you money on overseas purchases.
• If you have a low credit score or no credit history, then consider a secured credit card or a secured loan offered by a bank to build credit, rather than directly impacting your checking account decision.
• If you expect to maintain a very low balance, then look for accounts with no minimum balance requirements or easily waivable fees because high fees can quickly deplete your funds.
• If you frequently use ATMs, then choose a bank that offers a large ATM network or reimburses out-of-network fees to avoid extra costs.
• If you need to deposit cash regularly, then consider a brick-and-mortar bank or a credit union with convenient branch locations.
• If you are a student, then look for student-specific accounts which often have waived fees and other perks.
• If you are looking for higher interest rates on savings, then compare high-yield savings accounts from online banks or dedicated savings institutions.
• If you are concerned about overdrafts, then opt-out of overdraft protection or choose an account with a clearly defined and low overdraft fee policy.

FAQ

What identification do I need to open a bank account?

You’ll typically need a government-issued photo ID (like a driver’s license or passport), your Social Security number (SSN) or Individual Taxpayer Identification Number (ITIN), and proof of address (such as a utility bill). Requirements can vary slightly by institution.

Can I open a bank account online?

Yes, most banks and credit unions allow you to open an account entirely online. This is often the quickest and most convenient method.

What is a minimum opening deposit?

This is the initial amount of money you must deposit to open the account. Some accounts have no minimum, while others may require anywhere from $25 to $100 or more.

What are overdraft fees?

Overdraft fees are charged when you spend more money than you have in your account. Banks may cover the transaction and charge you a fee, or they may decline the transaction.

How long does it take to open a bank account?

Opening an account can take anywhere from a few minutes online to a few business days if there are additional verification steps involved.

What’s the difference between a bank and a credit union?

Banks are for-profit institutions owned by shareholders, while credit unions are not-for-profit cooperatives owned by their members. Credit unions often offer better interest rates and lower fees.

Will opening a bank account affect my credit score?

Opening a standard checking or savings account generally does not affect your credit score. However, applying for a credit product from a bank will involve a credit check.

What are common banking fees to watch out for?

Be aware of monthly maintenance fees, ATM fees, overdraft fees, wire transfer fees, and paper statement fees. Always check the bank’s fee schedule.

What this page does NOT cover (and where to go next)

• Specific account offerings from individual banks. (Next: Visit bank websites or speak with representatives.)
• Detailed explanations of advanced banking products like Certificates of Deposit (CDs) or money market accounts. (Next: Research specific savings vehicles.)
• The process of opening a business bank account. (Next: Look for resources on business banking.)
• International banking regulations or accounts for non-US residents. (Next: Consult resources for international finance.)
• Investment accounts or brokerage services. (Next: Explore investment platforms and financial advisors.)