There are lots of reasons to open a new bank account. Getting your first job, opening a business, or starting a new chapter in your life are all qualifying events. But the task can seem daunting – how much money do you need? Which bank is best? How long does the process take?
The first step is to relax! Setting up a new bank account is relatively painless as nearly every bank follows a version of the same process. Here’s how to get started:
Checking accounts are used for frequent and common purchases like groceries, rent, and household needs. These accounts usually offer convenient features such as debit cards and online bill pay.
Savings accounts are a great option for putting away money that you probably won’t need to touch. This type of account provides a small amount of interest, and in the event that you need to access your cash a savings account is easy to tap. But be warned – federal law limits your withdrawals or transfers to six events per statement.
Money market accounts and certificates of deposit (CD’s) earn even more interest than a savings account, but they come with much tighter restrictions on when and how often you can make withdrawals.
While it’s free to open a bank account, it’s not always free to keep it. Monthly maintenance fees, overdraft fees, and withdrawal charges can apply and vary widely between institutions, so do your research!
You may also want to consider the location of bank branches and ATMs in your neck of the woods. A no-fee checking account may sound great until you learn that the closest ATM is on the other side of town. This is especially important if you are the type of customer who wants to do their banking in person. If you prefer a completely online banking experience, location may take a backseat to other factors.
Give them the info:
Now that you’ve determined what account type and which bank, you’ll need to share some of your personal information. Banks ask for the following from new account holders:
Government-issued ID (driver’s license, passport, military ID, etc.)
Social Security Number (SSN) or Taxpayer Identification Number (TIN)
Date of Birth
Contact information, including a phone number and email address
That last requirement can be tricky. Federal law mandates that banks obtain the physical, brick-and-mortar street address where you live. PO boxes are not permitted. However, you can usually submit a PO box as your preferred mailing address.
Most banks require a small initial deposit, somewhere in the neighborhood of $5.00 to $25.00, to get you started. These funds can be deposited as cash, or you can provide the account and routing number of a pre-existing account to have the funds sent over electronically. Some banks will allow the initial deposit to be made by debit or credit card, but this is less common. Regardless of the deposit method, funds should be available within a few business days.