Published in: Banks | Jan. 4, 2019

How to Open a New Online Checking Account

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The days of having to visit a bank branch in order to open a new checking account are over. With the advent of online banks, it's easier than ever to find accounts with attractive terms, including some that offer substantial cash bonuses just to get you to open an account with a particular financial institution.

Some people are intimidated by the idea of having to open a checking account via the internet. However, online banks know that it's important to make it as easy and simple as possible for customers to start a banking relationship, and for the most part, they've done a good job of streamlining the process. By following this easy-to-understand step-by-step checklist, you'll be able to open your new online checking account before you know it.

Metal bank vault door, open and showing inside.
Image source: Getty Images.

Step 1: Pick the bank you want

There are dozens of banking institutions that do business almost exclusively over the internet, and hundreds more have extensive physical branch networks but still let customers open checking accounts online. In order to help distinguish between all these options and find the checking account that fits your needs the best, you'll want to do some comparison shopping. As you look, keep the following things in mind:

  • Most checking accounts are essentially the same, so two things tend to make a big difference: interest rates on your balance, and fees the bank charges for your account. If you can find the best combination of maximum income and minimum fees, you'll generally fare the best.
  • Be sure to check for restrictions or requirements that a bank can impose on checking account customers. For example, some banks charge a monthly fee if your balance falls below a certain minimum amount. If you expect to drop below that minimum balance regularly, you'll probably be better off with a bank that has lower minimums or doesn't have them at all.
  • Look at what options you have to get customer service. Some customers like banks that have both online and branch operations, because they can always go in person to speak to a customer service representative if something goes terribly wrong. However, with a combination of phone, email, chat, and social media options, even an online-only bank can provide enough customer service resources to give you the support you need.

Finally, some banks offer cash incentives to customers who want to open a new checking account. These promotional offers can vary greatly, requiring certain minimum deposits in order to qualify for bonuses. However, with some offers paying out hundreds of dollars, it's worth keeping your eyes open to see if you can get some extra cash for an online checking account that you wanted to open anyway.

Step 2: Find and complete the online checking account application

It used to be an extremely complicated process to fill out the paperwork necessary to open a checking account. Making sure that you brought everything necessary, including identification, to a physical bank branch was challenging, and sometimes, multiple trips were necessary to get the job done. With new online applications, however, it's a lot easier to give your bank the required information to get your checking account open.

You should be prepared to give your personal information to your bank, including your full name, your address, your date of birth, and your Social Security or tax identification number. Have your driver’s license or passport handy as well, because federal law requires banking institutions to get key identification information in order to thwart terrorist and other illegal activity.

If you already have another type of account at the bank at which you're opening your checking account, the process is usually much simpler. Since the bank already acquired most of the necessary information in opening the prior account, it can usually fill in the same information on the new checking account application. You'll just need to verify that nothing's changed since opening the previous account.

Banks are usually able to accept and approve applications for online checking accounts within just minutes of your sending them in via the internet. Once the bank approves your application, there's just one step left before you can start using your new checking account.

Step 3: Put money into your checking account

The last step in opening a new checking account is funding it. The easiest way to get money into your new checking account is by doing an electronic funds transfer from an existing bank account. Some banks will actually work the funding process into the initial account application, and so once your account is approved, your new bank will immediately start the process of moving money from the existing account you listed on the application.

If you don't have a bank account somewhere else, there are other alternatives. You can typically choose to send a physical check to your new bank by mail. You also have the option of using a faster method, such as a wire transfer, to get money into your account.

Banks might put a hold on initial deposits before you're actually able to withdraw your cash, either through ATM withdrawals or by writing checks. However, those holds are generally relatively short, and your bank should inform you of any such requirements at some point during the application process.

Step 4: Decide how you're going to use your checking account

Finally, once your account is open, you'll need to decide how you're going to use it. The most important question is whether you anticipate needing physical paper checks or whether you'll just take advantage of features like online bill pay to handle your routine transactions.

It used to be that getting paper checks was the entire point of having a checking account as opposed to a savings account. However, these days, many people never write physical checks, instead taking advantage of debit-card access when they make purchases or need to withdraw cash at an ATM. Between debit purchases, ATM withdrawals, and the ability that many banks give their customers to have bills paid automatically from your online account, it's possible to have a checking account relationship with your bank that never requires having physical checks in your possession.

There's no reason to fear

Some people find it difficult to get up the nerve to apply online for a checking account, but it's not a scary process. As long as you follow these easy steps, you'll have an online checking account up and ready before you know it.

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