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If you’d rather do your banking with a keyboard or touch screen instead of standing in line to see a teller, you have plenty of company. In 2022, more than three-quarters (78%) of Americans with bank accounts prefer digital banking through a mobile app versus going to a branch in person, according to a Forbes Advisor survey on consumer banking trends.
Online banking is winning converts due to the convenience, speed and low cost of managing your money digitally. Those positives all extend to the process of opening an account online. Although some customers are more comfortable setting up a new account with a banker face-to-face, others are happy to use their phone or computer.
And when it comes to the rapidly increasing number of strictly digital banks, opening an account online is the only option.
How To Open a Bank Account Online
Opening a bank account online is generally easy and can take as little as 15 minutes—less time than you might need to drive to the nearest bank lobby. Here’s how.
- Select a banking institution. The top things to look for in an online bank include FDIC insurance, low fees, a network of ATMs near you, online checking accounts with favorable terms, high-yield savings accounts and an array of other financial products and services that meet your needs. You can shortcut the selection process by choosing one of the best online banks.
- Fill out an application. Once you’ve chosen a financial institution, visit its website and click on the link to open a new account. Each bank has a slightly different process, but these are the typical questions you’ll need to answer:
- What is your ZIP code? This tells the bank which banking regulations will apply to your accounts.
- Are you an existing customer? If you already bank with an institution, you don’t usually have to enter all of your information when applying for new accounts.
- Are you applying with someone else? If submitting a joint application, you’ll need your co-applicant’s permission when applying.
- What type of account do you want? You may want to do basic banking with a checking account or savings account, save with a certificate of deposit, put money aside for retirement using an IRA or even open a brokerage account.
- What features do you want? You might need to opt in to features like overdraft protection, automatic transfers, paperless statements and so on.
- What username and password will you use? You’ll need a username and password to sign in to the banking portal. Often, you’ll answer security questions when applying that can help unlock your account if you ever lose your password.
- Can you make a deposit? Some banks allow you to set up a new account without making a deposit but others have minimum deposit requirements you must meet to open an account. Typically, you can make a deposit via an ACH transfer, credit card or debit card. You may also be able to use cash or checks.
- Are you sure about your answers? Once you’ve filled out your application, you’ll normally be asked to confirm that it’s all correct. Take a moment to be certain to avoid processing delays or being declined by the bank.
- Is it OK to peek at your credit? When applying, a bank may check your credit or banking history. It may check your credit if you’re applying for a credit card or loan or it might check your banking history for other accounts.
- Establish your identity. Most of your time opening an account will be spent providing personal information. This includes your full name, date of birth, address, phone and email. You may be asked about your citizenship status and quizzed about your job and income. If an account earns interest, you’ll need to indicate if earnings should be withheld for taxes.
- Wait for approval. Once your application is in, you may get an instant approval decision or you might wait hours or days. You can often check the status of your application online or call a number to ask if there are issues processing your application.
Once you’re approved, you can usually use your account right away and transfer funds. You’ll likely need to wait a few days or weeks for printed checks and ATM and debit cards to arrive.
How To Open a Joint Bank Account Online
A joint bank account is any bank account you share with someone else, such as a spouse, partner or child. Opening a joint account is similar to opening a solo account, except you’ll provide personal and identifying information for two people rather than just yourself.
To open a joint bank account online, choose a joint account application rather than an individual application. Enter your name, birth date, Social Security number or Taxpayer Identification Number and address as you normally would, then do the same for your co-owner (or let them take over). If opening an account with a minor, you’ll need to establish your relationship with them. Most accounts for minors require an adult over the age of 18 to be a co-owner.
After all your identifying information is entered, you may need to designate one person as the primary account holder. This tells the bank who to contact with questions or concerns.
Can You Open a Business Bank Account Online?
While some banks may require you to apply for a business bank account in person, most now offer online applications, especially for basic business bank accounts.
The process to open a business bank account online is similar to the steps described above. To start, take a look at today’s best business checking accounts to help you select a financial institution.
One difference is you’ll likely find more types of accounts: basic accounts for small businesses, and accounts with features for growing firms, nonprofits and more. Accounts also may vary by the number of free transactions per month that will be allowed and the cost for additional transactions over the limit.
Similar to when you’re opening a joint account, you may be asked to certify that you have the authority to open the account in the business’s name. You’ll also need to identify the type of business you have: sole proprietorship, partnership, LLC, etc.
Funding your account is similar to funding a personal account. Some business checking accounts don’t require a deposit to open.
What Do You Need To Open a Bank Account Online?
Federal law requires banks to identify anyone opening an account. This means you’ll need to provide at least the following information:
- Full legal name
- Address
- Date of birth
- Identification number
For a U.S. citizen, the identification number is your Social Security number. Alternatives for noncitizens include a passport number or photo ID issued by another government. You won’t need to send in a photo or scan of your ID document if the bank uses credit history information to verify your identity.
You’ll also need to initiate the ACH transfer or debit or credit card transaction to provide your opening deposit. Other options include delivering a check or cash to the bank.
Although it’s generally not stated on the online applications, you’ll likely need a reasonably clean credit history as well. Banks can reject your application to open an account. That’s more likely to happen if you have a history of fraudulent behavior or accounts left with negative balances.
If you’re opening a business account, you’ll also need copies of your business formation documents, such as articles of incorporation, any ownership agreements or a business license. You may be able to scan and email or fax these to the bank to avoid having to visit a branch.
Pro Tip
Use caution when applying for a bank account online, whether you’re using a browser or mobile app. While online banking is safe and applications are encrypted, there are ways to make sure the personal information you provide is protected. Download official banking apps directly from a bank’s website and use strong passwords you don’t use anywhere else.
Why Can’t I Open a Bank Account Online?
If you can’t open a bank account online, it could be because of an issue with your application. In some cases, these issues can be resolved by verifying your answers with a representative or providing missing information. In other cases, a bank could deny your application.
Banks look at consumer reports like ChexSystems to vet potential account holders and identify high-risk applicants. If your banking history shows bad checks, overdrafts or fraud, you may have trouble opening an account online. If this happens, consider second chance bank accounts to rebuild a positive banking history. These are easier to open than other accounts and can typically be converted to standard accounts later on.
It’s also possible for your banking history to contain errors. Double check your consumer reports to ensure there are no mistakes on your account. If there are, correct these right away.
Can You Open a Bank Account Online With No Deposit?
Many banks don’t require an initial deposit when you open an account online, but it depends on the institution and type of account. If you don’t want to transfer funds right away, look for an account with no minimum deposit requirement. Just be sure to read the fine print—some accounts require you to maintain a minimum daily balance to avoid fees, so you don’t want to wait too long to fund your account.
How Old Do You Have to Be to Open a Bank Account Online?
Though some banks have a minimum age of 13 or 14, a person can generally open an account at any age, though a child under age 18 will need to have an adult parent or guardian as a co-signer.
A minor also will need a Social Security number in order to be approved as an account co-owner.
How To Close a Bank Account Online
To close a bank account online, start by taking care of pending transactions. Ensure that all purchases are cleared and there are no expected bill payments from that account. If there is a balance in the account, transfer it to another account or withdraw it.
Many online banks make it easy to close accounts. You can find this option in the account services section of your online banking profile. Simply click the “close account” button or link and answer the exit questions and reasons for closing. Other banks might require you to chat with a customer support representative or call a phone line to carry out your request.
After closing a bank account, you should still have access to your banking records for five years.
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Bottom Line
You can open a bank account online in less time than it’s likely to take to go to the nearest branch. The process is straightforward and doesn’t always require an opening deposit of money.
As more bank customers shift their activities online, opening an account online is likely to become the standard way to get started with a new bank.
Frequently Asked Questions (FAQs)
Is it safe to open a bank account online?
Yes, it’s safe to open a bank account online. Your financial safety is important, and banks have measures in place to make opening a bank account online just as safe as doing so in person. Reputable banks, credit unions and fintech companies use firewalls to protect against cyber attacks, SSL encryption and multifactor authentication to ensure your information is safe.
Is it better to open a bank account online or in person?
When choosing between applying for a bank account online or in person, do what makes you comfortable. Online banking is quick and convenient for many people, but some enjoy the personalized service provided by brick-and-mortar branches.
Are online bank accounts FDIC insured?
Most online bank accounts are FDIC-insured. FDIC-insured banks will typically include a “Member FDIC” seal on their websites. To verify a bank’s status, you can use the FDIC’s Bank Find tool. Online bank accounts offered by credit unions are usually insured by the National Credit Union Administration (NCUA).
