Opening a bank account isn’t as simple as walking up to a teller and handing over your money. Creating a new account requires a bit of preparation and thought. For example, you’ll need to decide which type of account you want and how you want to use it. Luckily, while banking jargon can be intimidating, this process isn’t difficult once you know a few banking basics. Follow along step-by-step to set up your first account.
Make sure you’re eligible to open an account.
Before you head to the bank, it’s wise to check whether you meet all the criteria for opening an account. As a general rule, most banks will require the following:
If you’re under 18, some banks might require your parents to sign some forms when you make your account. Not all banks do this, so if you don’t want your parents to be involved with your banking, try emailing banks before you go into them asking whether they require your parents to sign.
You’ll need to have valid identification and be willing to share basic information about yourself. In the US, you’ll usually need your Social Security number.
You’ll need to have at least the minimum amount of money for opening account. This can vary based on the bank and account you choose. For example, a basic Bank of America savings account requires a minimum deposit of $300.
Choose the bank that’s best for you.
Not all banks are the same, even when it comes to basic personal accounts. It can be very wise to contact the banks in your local area to discuss what exactly you’d get if you opened a basic account. While all banks are different, they can generally be lumped into two general categories: large chain banks and smaller local ones. See below:
Large chain banks: Large banks usually have branches in most towns and cities across the country, which means you’ll be able to get basically the same service no matter where you go. This wide coverage can help you avoid fees you’ll have to pay for using other banks’ services (like ATM fees, etc.) Large banks also usually have the resources to offer services like 24-hour help lines for their customers. In addition, these banks tend to have a stable, trusted reputation — they are unlikely to fail or present you with “surprise” difficulties.
Smaller local banks: Small banks offer a more personal, human experience. They tend to be friendlier than big banks in several ways — not only will they be willing to offer more personal, one-on-one attention, but they’ll often be willing to “work with you” when something goes wrong (like you overdraft from your account). Smaller banks also usually charge smaller fees for using their services. Smaller banks often invest their money into the local community, rather than in national, or multinational large projects that chain banks might be investing in. On the other hand, smaller banks fail more frequently than large banks (this is still very rare, though). In addition, credit unions are another option for banking. Credit unions are not-for-profit financial institutions, often with a mission to be “community-oriented” and “serve people, not profit. Credit unions have successfully made their services more accessible by partnering with other credit unions to offer shared branch banking and ATMs.
Pick the type of account you want.
Most of the time, when someone opens his or her first bank account, it is a regular checking or savings account (or both). Both of these types of accounts allow you to safely store your money with the bank and withdraw it when you need it. However, each type of account is best for different tasks. See below:
Checking: A checking account is what most people use for day-to-day purchases. With a checking account, you’ll get a checkbook and a debit card that you can use to pay for things with the money in your account. Money in a checking account doesn’t change over time — if you want more money, you have to put it in yourself.
Savings: As its name suggests, a savings account is best for saving money long-term. Money in a savings account slowly gains interest — in other words, the bank will pay you a small amount for storing your money with it. The more money you have in the account and the longer you save it, the more interest you get. You can still withdraw money from a savings account at banks and ATM, but you can’t generally use it for checks and debit card payments.
If you have enough money to meet the minimum deposit for both, having both a checking and a savings account is usually best. You can use the checking account for your daily expenses and put extra money in your savings to make interest.
Visit your bank and ask to open an account.
Opening an account in person is usually the best option for first-time account holders. One big advantage of opening an account in person is that you can ask the teller all of your questions and get immediate answers (as opposed to the waiting you’ll have to do online or on the phone). Also, because you can sign the forms and receive your confirmation documents on the spot, the process of opening an account is also usually speedier in person.
The rest of this section will assume you’re opening an account in person. However, depending on your bank, you may also be able open an account over the phone or even online. These options vary from bank to bank — not all banks will let you open your account these ways.
Ask important questions before you finalize your account.
Now is an excellent time to ask for clarification on any issues regarding your account that you don’t understand. Below are a few suggestions for questions you may want to ask, but don’t be afraid to ask any others that occur to you.
Is there a monthly fee for maintaining this account? If so, what is it?
Is there a minimum balance that I must keep within this account? If so, what is it? What sorts of fees apply if I go under that limit?
What is the interest rate of my savings account? How often does interest generate?
Is there a limit to the amount of transactions (deposits/withdrawals, check writing, ATM uses) I have per month?
Where can I withdraw cash without paying any fees? What is the fee for using an ATM that doesn’t belong to this bank?
Is the account I’m applying for insured by a Deposit Guarantee Scheme (DGS)?
Supply the necessary information to create your account.
As noted above, opening a checking account requires a few basic pieces of personal information. You may or may not have to provide documentation to prove this personal information. This depends on the exact bank you’re opening an account with. In general, it’s a good idea to have:
Proof that you are who you say you are: Have a government-issued ID with your photo on it with you (a driver’s license or a passport are best).
Proof of address: A phone bill, driver’s license, or any other official document with your name and address will usually do.
Proof you are a registered citizen: The bank will ask for your Social Security number, taxpayer identification number, or employer identification number to ensure that you are “on record” with the government. As long as you know this number, you don’t generally need to have your Social Security card, etc. with you.
Keep the account documents you receive secure.
When you finish completing your account, you will receive documents that contain important information about your account. Keep these in a safe place, like a strongbox. Don’t let people you don’t trust access these documents — they may be able to use them for malicious purposes. If you can, it’s a wise idea to commit the following information to memory so that you don’t need to rely on the documents in the future:
Your four-digit PIN number: You need this to use your debit card for purchases.
Your bank account number: You need this for financial tasks like setting up direct deposits
Your Social Security number: You need this for various tax and financial tasks in the future
If you believe your account information has fallen into the wrong hands, you can always contact your bank and request a “freeze” on your account to prevent unauthorized use.
Withdraw money from your account when needed.
The biggest benefit of having a bank account is that it’s a safe way to store your money. Money in the bank can’t be lost or stolen — it’s yours until you spend it. Even in the unlikely event that your bank is robbed, your money is insured by the government, so you won’t lose it. When you want to get the money in your bank account, you need to make a withdrawal. There are several ways to do this:
Visit the bank in person and fill out a withdrawal form. You’ll usually need your account number and basic personal information for this. Somewhat time-consuming compared to the other options, but necessary for special tasks like large withdrawals.
Use an ATM. See below for more information.
Online. In this case, your withdrawals are usually limited to transfers between accounts and payments to other individuals — you can’t “get cash” online. See below for more information.
Get cash from an ATM.
ATMs (automatic teller machines) are a convenient way to get cash when you’re out and about. ATMs are located at almost all banks. In addition, you can usually find them in areas of commerce, like malls, grocery stores, and some restaurants.
To use an ATM, you will need to know your checking account’s four-digit PIN number. See our ATM article for detailed instructions.
It’s always best to use your own bank’s ATMs when possible. Usually, you’ll have to pay a small fee for using ATMs that don’t belong to your bank. Note also that your bank may have a limit on the number of times you may use its own ATMs per month without receiving fees.
Write checks to pay for purchases.
Another way to use your bank account to pay for purchases is to write a check. This is a convenient option when you don’t have cash handy. A check is basically an official slip of paper that shows that you promise to pay someone a certain amount of money. When the person you write the check to brings it to the bank, it will use money from your account to pay.
See our article on writing checks for more information.
Make sure you have enough money in your account to pay for your purchase before you write your check. If you don’t, your check will “bounce.” This means that the payment won’t go through, you’ll have to pay a fee, and you’ll still be held responsible for the money.
Some banks offer “overdraft protection” services for check-writing. In these cases, when you write a check that you don’t have enough money to pay for, your bank may “spot” you the money to cover the purchase. You will still have to pay a fee but you won’t have to deal with the check bouncing.
Make a deposit to add more money to your account.
When you want to put more money into your bank accounts, you need to make a deposit. As with withdrawals, there are several ways to do this:
Bring your money or check to your bank. You will have to fill out a deposit form, which requires you to provide your account number.
Use an ATM. Today, many ATMs (especially the ones at banks) allow you to make deposits. You will usually have to do this at one of your own bank’s ATMs.
Use mobile check deposit services. One relatively new way to deposit checks involves taking a picture of the check with your mobile phone and sending it to the bank. This usually requires you to download your bank’s mobile app. For example, click here for instructions for Bank of America’s mobile check deposit service. Note that not all banks offer this.
Try your bank’s online banking features.
Today, nearly all banks will offer some sort of online options for viewing and managing your bank accounts online. Usually, you are prompted to set these up when you first open your account. These services will differ from bank to bank and account to account. In general, most banks will offer:
Secure online login options on the bank’s official site
The ability to view your accounts’ balances
The ability to view a record of purchases, withdrawals, and deposits for each account
The ability to transfer money between accounts
The ability to send money to other individuals
Set up a direct deposit to make maintaining a balance simpler.
Don’t want to make a trip to the bank every time you are paid? Most employers offer the option for you to be paid directly into your bank account — this is called “direct deposit.” In this case, taxes are withdrawn before the money is added to your account.
Talk to your employer’s payroll department if you want to set up a direct deposit. This will usually require you to fill out some forms and provide information about your bank account (like your account number).
Consider linking your checking and savings accounts.
“Linking” two separate accounts to each other usually means that the funds from one account are made available to the other for special expenses. For instance, if you link your checking and savings accounts, some banks will let you use the money from the savings account to cover overdrafts on your checking account. Other benefits include:
Avoiding some types of minimum-balance fees
Receiving one combined account statement rather than two separate ones
Allowing easier transfer of money between accounts.
Consider making a joint account with someone else.
When you open any account with another person, it is called a “joint account.” Married couples often open one of these accounts, but any two people can do this. You and the co-account opener have equal ownership over all the money in the account, and can take advantage of all the services that come with the account. Either owner can deposit or withdraw money without having to answer to the other holder.
For these reasons, it’s important only to open a joint account with someone you absolutely trust. For instance, there’s nothing the bank can do to stop one owner from taking all the money out of the account without the other’s notice.
To make a joint account, both account holders must agree to the terms of the account and fill out their own copy of the account creation forms. This means each person will need to provide an ID, Social Security number, etc.
Generally, most joint accounts carry “rights of survivorship.” This means if one of the joint account owners dies, the surviving owner gets all the money in the account.
Consider opening a high-interest account.
Looking to earn more interest on the money you’re storing long-term in your bank account? Many banks offer special options for starting accounts with higher-than-normal interest rates. This increases your long-term earnings, but you’ll usually have to meet certain conditions to keep these accounts. See below for more information:
High-interest savings: This account comes with all the benefits of a regular savings account, but has a higher minimum balance (that is, you have to keep more cash sitting in the account). You may also be limited in terms of how often you can withdraw from it. In return, you will earn higher interest.
Interest Checking: This account features everything that a regular checking account has (ATM privileges, check writing, etc.), but it includes an interest rate, so it acts a little like a regular savings account. However, the monthly maintenance fees for these accounts are usually higher. This means it’s in your interest to keep enough money in your account so that the interest outweighs the monthly charge.
Consider a certificate of deposit (CD) for long-term gains.
When you put your money in a CD, you legally agree to put it away for a certain amount of time. This usually ranges from several months to about five years. During this time, you may not add or remove money from the CD. Because you are agreeing to let the bank have your money “no matter what” for the agreed-upon length of time, CDs usually have higher interest rates than basic savings accounts.