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Opening a bank account online is simple. You need some basic personal information, a valid form of identification and an account-opening deposit to get started.
Opening an account online is a convenient alternative for people who are unable or don’t want to visit a local bank or credit union branch during normal business hours. And if you want to open an account with an online-only bank or neobank, it’s probably your only option.
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- Can I open a bank account online?
- Types of bank accounts you can open online
- How to open a bank account online
- Next steps: What to consider before opening an account online
Can I open a bank account online?
Many financial institutions allow customers to open accounts online instead of going into a branch.
Traditional banks
Traditional banks offer a wide range of financial products and services, including deposit accounts, loans, credit cards and investment accounts that they deliver through a combination of brick-and-mortar branches and online and mobile banking services.If you want to be able to go to a branch to speak with someone in person at some point, a traditional bank might be a good option.
Credit unions
Credit unions are nonprofit organizations owned by their members. They have physical branches, but typically have a smaller footprint than larger banks. Credit unions may offer fewer products and services compared to a traditional bank. But if you want to work with a local, community-based organization, a credit union could be a good fit.
Online banks
Like traditional banks, online banks offer financial products and services to their customers, but they have few or no physical branches. Online banks often have fewer fees and higher interest rates than traditional banks. But if you have a problem or need to ask a question, you can’t walk into a branch — you’ll have to call customer service.
Neobanks
Neobanks aren’t technically banks. They’re financial technology companies that offer traditional banking products through apps. Because they don’t have a bank charter, neobanks partner with traditional banks to insure customer deposits.
Neobanks have no physical branches and generally offer only a handful of products rather than a full suite of financial services. They often have lower fees and higher interest rates than traditional banks.
Types of bank accounts you can open online
There are several types of bank accounts you may be able to open online. The one that’s right for you depends on how you plan to use the money you deposit into it.
Checking account
Checking accounts may be a good option if you’re looking for a place to keep money to use for daily spending or monthly bills. Depositing money is easy, and you can pay for expenses by writing a check, setting up online payments or using a debit card. Generally checking accounts are better options to store money for the short term rather than save, since they don’t typically earn interest. Even if you open an interest checking account, rates are typically low, so they’re not a good option to grow your money.
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Savings account
Savings accounts are a safe place to set aside money for an emergency or short-term savings goals such as a vacation or car down payment. Money deposited into a savings account earns interest, but rates are typically low, so they’re not your best bet for long-term investments. Banks may limit the number of withdrawals you can make each month, so a savings account isn’t a good option for paying monthly bills.
Money market
Money-market accounts combine features of both checking and savings accounts. You’ll earn interest on deposits like you do with a savings account, plus you can write a limited number of checks or make a limited number of electronic withdrawals or transfers each month.
Certificate of Deposit
A certificate of deposit, also known as a CD, is a type of savings account that typically earns more interest than a traditional savings account. To open a CD, you deposit a lump sum of money into an account for a fixed term. Account opening minimums for CDs are often higher than what you need to open a checking account.
At the end of the term, or when the CD “matures,” you can withdraw your money without penalty or roll it over into a new CD. But if you need to access your money before the maturity date, you may have to pay a fee.
Individual vs. joint
No matter what type of account you choose to open, you may have the option to decide if it will be an individual or joint account. If you open an individual account, you’re the only person who will be able to make deposits and withdrawals. Joint accounts give both accountholders equal access to the account.
How to open a bank account online
You can open a bank account online in a few simple steps.
- Gather the information you need. To open an account, you must provide some information about yourself. This typically includes your name, phone number, email address, home address, birthdate and social security number or individual tax identification number (or ITIN). Plus, you need a copy of a valid photo ID, such as a driver’s license or state ID card.
- Complete the online application. Go to the financial institution’s website to fill out your application. If it’s approved, your account will be opened.
- Make an initial deposit. You may be able to fund your account with a check, debit card or credit card, or by transferring money from another account.
Consider a free checking account
A free checking account is a basic checking account that doesn’t charge any recurring fees, such as monthly maintenance fees.
Do your research before signing up, since hidden costs can eat away at your savings. For example, you may have to pay out-of-network ATM charges, overdraft fees, foreign transaction fees and other charges or penalties.
Some accounts may even have a minimum balance requirement, meaning you have to keep a certain amount of money in your account to avoid additional charges.
If you’re looking for a checking account that’s free to open, you might want to consider a Credit Karma Money™ Spend online checking account. It comes with no penalties, overdraft fees or minimum balance requirements.
And when you set up direct deposit with Credit Karma Money™ Spend, you can get access to your paycheck up to two days early and federal benefits up to five days early.
Next steps: What to consider before opening an account online
Before opening a new bank account online, think about how you’ll use it and select one that aligns with your banking needs. Are you looking for a bank account that makes it easy to pay the bills each month, or do you want to build an emergency fund? Or both?
After considering what might be best for your personal financial situation, it’s a good idea to research different financial institutions to compare account and banking features such as …
- Physical locations
- Additional products and services offered
- ATM availability
- Minimum balance requirements
- Overdraft protection
- Fees (overdraft fees, ATM fees, monthly maintenance fee, etc.)
- Interest rates
For example, if you want the flexibility to be able to visit a local branch from time to time, an online bank may not be the best option. But if you don’t mind banking exclusively online and you want to take advantage of potentially higher interest rates, then an online bank could be a good choice.
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About the author: Jennifer Brozic is a freelance financial services writer with a bachelor’s degree in journalism from the University of Maryland and a master’s degree in communication management from Towson University. She’s committed… Read more.
