Whether you’re switching banks or starting fresh, opening a bank account is a big step. It’s important to get everything in order before you try setting up the account.
But how do you prepare? What do you need to open a bank account? And in this digital age, do you even have to go to the bank?
Those are all good questions. So we put together this checklist to show you what you need to open a bank account. Some things, like a valid ID and money, are givens. But some might surprise you.
Let’s be clear on this: Banks are businesses. And just like any business, their goal is to make money. Some ways they do that are charging you fees and pushing you into high-interest loans and credit cards.
Banks also make money when you either don’t know enough about banking to defend yourself from their schemes or can’t get ahold of a real human to answer your questions.
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Some banks are worse than others and have some truly sleazy practices. So it’s important to be on your guard and trust your gut. If the banker is acting like a pushy salesperson or trying to get you to sign up for paid services or high fees, run away!
Instead, you need a bank you can feel comfortable working with, preferably one with a good track record for customer service and low to no fees. Learn how to compare different banks, and pay attention to their customer service ratings. After all, the last thing you want to do is end up on hold for three hours fighting a ridiculous service fee.
A bank needs to offer more than good customer service (although let’s be honest, many of them can’t even do that). They should also offer options that will get you the financial future you want—not hold you back.
There are three main things to look at when you’re deciding if a bank is right for you.
Types of Accounts
Before you try to open one, find out what type of bank account you need. There are several options, but we’re going to stick with the basics: checking and savings.
Most people use a free or basic checking account to get direct deposit paychecks, pay bills and withdraw from ATMs. But you may need to consider another type, like a joint checking account if you’re married. Like they say, “The day you said, ‘I do,’ you were no longer two.” That means you and your spouse share everything—including access to a common bank account.
Savings accounts are just what they sound like—a place to store money until you’re ready to spend it. Some people get excited when they find out these accounts pay them interest, so they shop around for the best interest rate.
But remember, these rates are pretty low—you’re never going to get rich off of them. And that’s okay! A savings account is not an investment. It’s a cushion for those times when life deals you an unfair blow. Think of it like an extra insurance policy—minus all the red tape.
You may also consider opening a checking and a savings account, so you’ve got one for spending money and one for your emergency fund. Whichever option you choose, you’ve got to watch out for all the sneaky ways banks try to charge you money, like fees and minimums.
Fees are one of the biggest ways banks prey on people. In 2019, banks charged more than $11 billion in overdraft fees.1 That’s nuts!
And it’s why you need to look for accounts with low or no fees. Most people have put their heads down, shuffled their feet and said, “Well, fees are just part of banking.” No! They’re not! This is your chance to take a stand by refusing to work with banks that fee their customers to death.
And make sure you don’t ever pay a monthly fee. That’s when the bank takes your hard-earned money as “payment” for letting you have the account. It’s basically like asking a hungry 3-year-old to guard a cookie jar—they’re not guarding anything, they’re eating all the cookies!
When customers make deposits, banks actually loan that money to other people and profit by collecting the interest on those loans. (The money you get from a withdrawal is usually some other customer’s deposit, because the bank has already loaned your money out.)
The more money that’s in your account, the more the bank can loan out and the more they profit. That’s why some banks require you to maintain a minimum balance.
Minimums depend on the bank and often on the type of account. It’s not uncommon for a savings account to have a $300 minimum and checking accounts to have a $1,000 minimum.
Now, if you can’t keep the minimum in your account or if you’re one of the 78% of Americans living paycheck to paycheck, the bank isn’t going to close the account.2 Instead, they’ll attack you with a $5–35 “below minimum” fee. These fees are totally unnecessary and, thankfully, easy to get out of. Lots of banks offer free checking accounts with no minimum balance requirements, so find one of those and use it instead!
Another option is to work with a bank that gives you a choice with your checking account: either keep the minimum in the account or set up regular direct deposits. With this option, you can have less than $1,000 in your account, because the bank knows there’s another deposit coming.
Every day, people try to open accounts using fake information. That’s fraud! It’s wrong, and it’s a huge nightmare if it happens to you. That’s why you need to protect yourself from identity theft.
But did you know banks have to protect themselves from consumer identity theft, too? This type of fraud costs them a ton of money. So when you open an account—even if you’re banking online—you’ll need documentation proving that you are who you say you are.
You’ll also need documentation for anybody else whose name will be on the account, like your spouse or principal (that’s the person who made you their power of attorney—not the one from high school).
If you’re banking in person, you’ll need to bring all these documents with you so the banker can put your info into their system. Online banking works the same way, except that you’ll be the one uploading the documents to the bank’s website.
This is the easiest way for the bank to know you’re legit. Most people use their driver’s license, but you can also use a passport or a state-issued ID card.
Passports also come in handy when you’re setting up an account for your kid who’s under 18. But if you’ve never taken your kid out of the country—which is most parents, because that kind of vacation is expensive—that’s okay!
Just ask the bank what type of documentation to bring for junior—usually a birth certificate or Social Security card will work. Go ahead and bring your ID, too, if your name is going to be on the account.
And make sure your kid knows how proud you are of them for being responsible enough to have their own bank account! This is a big step for them and you—after all, now you get to teach them how to use money and bank wisely.
Proof of Address
In the old days, customers could only open bank accounts if they brought in a document that proved they lived where they said they did. That’s because banks use customers’ addresses to check their identities and contact them.
But modern technology is making these things easier than ever. Most banks—especially online ones—will just use the address on your government-issued ID.
If your bank does require another proof of address (which is more likely to happen when you open an account in person), you’ll want to find a document with both your name and address printed on it. That could be a lease, utility bill or official piece of mail (not junk mail addressed to “Current Resident”).
Other Personal Information
Most banks ask for extra information like your Social Security number, individual taxpayer identification number and birthdate to help identify you. They may also want a phone number or email address so they have a quick and easy way to contact you with account information.
Let’s be honest, though. They’re mostly just going to send you garbage credit card offers that will make them money by dragging you deep into debt. These offers will not help you, so opt out of them whenever you can.
And remember, different banks have different rules about personal info. If you have questions, ask the bank directly about their requirements—don’t just guess.
Once you’ve picked an account and gathered your documents, you’ll need to round up some cash for your deposit. After all, a bank account helps you save and spend money, so it doesn’t make much sense to open an account with nothing in it.
The one exception is if you have literally no money and are starting a new job that requires direct deposit. In that case, you’ll need a bank that doesn’t require an opening balance.
If you have to go with that option, be aware that the bank expects you to start putting money into the account soon. Like, yesterday. So you’ll need a steady job, Social Security or another form of income.
Otherwise, you guessed it—more fees. You could even end up owing the bank money before you put anything in your account!
There’s one last thing you need to take to the bank, and that’s the ability to say, “No!” A lot of banks try to talk customers into products that are wrong for them, because they make a ton of money that way. Banks made $233 billion in 2019!3 And most of that was from interest on loans and credit cards. Translation: Banks feed on debt—which is exactly what cripples you financially.
If you walk into the bank to open a checking account, expect the banker to try to get you to sign up for a credit card or other debt product. It’s so easy to walk out with a piece of plastic, a $5,000 spending limit and an 18% interest rate, but don’t do it!
Because as soon as you do, that banker is rubbing his hands together, grinning like a possum, because he knows those interest payments are going to kick in a few months from now and get him a big fat bonus.
We’ve said it before, and we’ll say it again: These companies are predators! You’ve got to know your stuff so they don’t take advantage of you. And that includes being able to say no to things you don’t need.
Just open the account you need, and trust yourself to take charge of your own money. If you need a hand, try EveryDollar. This free app makes budgeting and tracking your spending easy—so you can start winning with your money.
A New Option
That’s it! Once you’ve got all those things together (plus any extras the bank asks for), you’re ready to open an account.
Just remember that at most banks, opening an account also opens a lot of doors to ruin your financial future in a hurry. After all, the account may be free, but these banks are still going to make money off of you. They’ll charge you unfair fees and send you seedy credit card offers that sound good—until you’re $20,000 in debt and can’t seem to find a way out.
That’s why we’re creating Gazelle, a new online banking experience designed to help you reach your financial goals. With Gazelle, you’ll enjoy no fees, total online access to your account and customer support from real people. Even better? We will never push debt on you!
Join the Gazelle beta waitlist today, and soon you’ll be working with a bank that works for you—just the way it should be.