If you want an easy way to monitor your bank account anywhere you go, opening a bank account online is the way to go. It takes only a few minutes to set up and can save you a trip to a bank branch whenever you need to make small changes. The top online banks right not are FDIC-insured and have higher rates than your traditional bank.
What Does it Mean to Bank Online?
To put it simply, online banking is a style of bank account management that allows you to do all of your banking activities online.
You have the ability to open your account, transfer money between accounts, send money to your friends and family, and pay bills all from the comfort of your home.
Nowadays, your local big name bank can offer online banking, but if you don’t bank with them there are other lesser known banks that offer completely online banking.
This means that there are no physical branches you can visit. The big name banks will offer you some of the best flexibility because it gives you the option of going into the physical branch if you need to meet face to face.
However, if you don’t live near a large bank, having a bank that conducts there business entirely online will be the best option for you.
One of the biggest differences between banks that offer both types of banking and banks that only offer online services is the use of cash.
Banks that offer a hybrid approach offers you the ability to withdraw or deposit cash anytime you’d like.
With online banks, it is more difficult because you must use an ATM and many online banks may not even allow you to withdraw cash at an ATM.
What Information Do You Need Before Opening A Bank Account Online?
To open a bank account online, there are a couple of things you will need. All these things have to do with verifying our identification and will include:
- Social Security number or, for noncitizens, another identification number.
- Valid driver’s license or other government-issued ID.
- If your new account requires an initial deposit, you’ll also need debit card information, or routing and account numbers, for another bank account you own. You can find these on a check or by logging into your existing account’s online dashboard.
Do You Want A Checking Or Savings Account?
There are a couple of things you will want to consider when opening an account. Consider these things when deciding whether you want to open a bank account online:
- Single or joint account? As the name gives away, a single account means you are the sole owner of the account. A joint account, however, means that you co-own it with another person.
- Checking, savings or other? At this point in your consideration process, determine what you want this account to be used for. For regular expenses, a checking account is the way to go, but make sure it doesn’t charge too many fees. If you want to set money aside for a long period of time, check out savings accounts.
If the financial institution offers multiple savings or checking accounts, compare them to see which terms and features work best for you.
One of the biggest things to consider when opening a bank account in general is to make sure that these accounts are FDIC-insured. That way, your money will be protected if the bank were to go bankrupt. Credit unions have the same protection but under a different organization called the National Credit Union Administration.
Where to Open an Online Bank Account
If you’re interested in opening an online bank account, then you’re in the right spot. Like we mentioned in the section above, you have many options to choose from. Here are some we like:
- Check your local banks. One of the first things you should consider is whether or not your local bank offers online banking. It’d be a lot easier if you can do all your banking at a bank you’re already familiar with. Start with your bank’s website to see if they offer online banking. If you’re unable to find what you’re looking for, call your local bank and ask them about the process of setting up online banking.
- CIT Bank. CIT Bank is a great bank that offers excellent rates on its savings accounts. With this bank, you can sign up for online banking entirely online. To open an online bank account, you will need your Social Security Number and your driver’s license number. For the opening deposit, you will need to write a check or link your current bank account to fund your initial deposit.
- Discover Bank. Offering some high-yield accounts, you can open any of these accounts online. Similar to the previous bank, you will need details like your Social Security Number, name, email, etc. to open an account with Discover Bank. The difference is Discover Bank’s savings account has no minimum deposit requirements, so you do not need to transfer any funds right away.
- BBVA. If you have an account with another bank, but want to make the switch because this bank account suit your needs better, BBVA actually offer a Consumer Switch Kit that helps you completely switch banks. This kit includes setting up a direct deposit on your new bank account and checking to make sure all of your funds go to this new account.
Steps to Open a Bank Account Online
Opening a bank account online can actually be easier than doing it in person.
With opening a bank account in person, you might forget a key document, but with online banking, you can do the whole application process at your home.
- Gather your information. By law, banks need to verify your identity. Hence, all the need to check your government issued identification. That is why you will need to have access to a scanner to make copies of your documents to give to the bank. If you are not a U.S. citizen, you may need to scan your immigration papers. More specifically, you will probably need these documents:
- Social Security Number or Social Security Card
- Driver’s License Number or Driver’s License (or other state-issued ID)
- Research and Choose an Online Bank. The next step is to select a bank that will suit all of your needs. If you like your current bank, check to see if they offer online banking so that you aren’t required to open a new account. If your bank does not offer online banking, you can always look at other banks. To help you search for good banks, we highly recommend looking for banks with the highest APY on savings accounts.
- Choose Your Account. Once you find a bank that you are happy with, it’s time to choose which accounts you want to open. Most banks require customers to at least open one savings account. For example, if you choose a credit union, you will definitely need a small deposit in a savings account to establish your membership before you can open any other account types. If you’re saving money to achieve your long term goals, consider opening a money market account and/or a certificate of deposit.
- Complete Your Application. Instead of creating a separate application for each account, apply for all of them at once when you’re opening your new bank account. At this point, you will need to provide documentation you gathered earlier and details about yourself mentioned above. Note that some banks might require you to mail in a page with your signature on it so they know what it looks like.
- Fund Your Account. Finally, all you have to do now is make an opening deposit. You have the option of linking your current bank account by providing your new bank with the necessary routing and account numbers. Some banks verify that you own the account by making $1 deposit. If that is the case, you must go into your account and confirm the amount to link the two accounts.
What Other Information Do You Need To Open A Bank Account?
When starting the process of opening a bank account online, make sure you use a secure home internet connection or another trustworthy network to fill out the application. This is because you will be using personal details such as:
- Date of birth.
- Contact information.
Most of the time, you can send this information online, but some banks may want you to fax this information over along with additional documents, such as your driver’s license, to verify your identity. Also, they may want a copy of your signature so that your bank can verify yours. If you aren’t a legal adult, you will need a parent co-signer’s information as well.
How Can You Fund Your Account?
When you open your bank account online, you will need a source of funds to start transferring money over to your new account. If your bank is entirely online, you can fund it through a check or money order. If your bank has local branches, you can always go there and deposit a check or cash.
Once you enter the details for your transfer, select the amount that will satisfy the minimum balance or opening deposit requirement. The funds will normally take a few days to process, but afterwards, you can start managing your account.
FAQs When Opening a Bank Account Online
- Are There Any Free Bank Accounts Online? Yes, there are many free bank accounts available online. However, be sure to read the fine print so you know what fees will be charged. The details will most likely be under the Schedule of Fees or Truth-In-Savings Disclosure. Some banks that advertise as free may not charge a monthly fee but come with other fees such as overdraft charges or inactivity fees.
- Can You Open a Bank Account Online with No Deposit? This depends on the bank’s policies. There are some banks that require a minimum opening deposit while some do not have a minimum. The best way to figure this out is to contact the bank or read the fine print.
- Can You Open a Bank Account Without a Photo ID? Most likely not. There are very few banks that do not require a photo ID. A lot of banks will actually require two forms of ID.
Opening a bank account online may seem difficult at first, but it is all quite simple! Once the process of opening a bank account online is all over, you will have access to multiple features that makes your banking experience much more effortless. For more posts like this, check out our list of bank guides!