Banks, credit unions, and online-only institutions all let you open accounts, but they differ in fees, branch access, and minimum balances
You can open a bank account at a traditional bank with physical branches, a credit union, or an online bank that operates only on the internet. Each type has different costs, different requirements, and different ways to deposit and withdraw money. The right choice depends on whether you need in-person service, how much money you plan to keep in the account, and what fees matter most to you.
Before you walk in or click "open account," gather your ID (a driver's license or passport), proof of address (a utility bill or lease dated within the last 60 days), and your Social Security number. Some places ask for a second form of ID. Have these ready and you'll move faster.
Key Takeaways
- Traditional banks offer branches and ATMs everywhere, but often charge monthly fees unless you keep a minimum balance or set up direct deposit.
- Credit unions typically charge lower fees and offer better interest rates, but you must be a member of the organization or group they serve.
- Online banks have no monthly fees and higher savings rates because they have no physical locations, but you cannot deposit cash in person.
- You will need a government-issued ID, proof of address, and your Social Security number to open an account anywhere.
- Some banks and credit unions offer second-chance accounts if you have been denied before or have a history of overdrafts.
Traditional banks: branches, ATMs, and monthly fees
A traditional bank is what most people picture: a building with tellers, a lobby, and a name you recognize. Banks like Chase, Bank of America, Wells Fargo, and regional banks like PNC or U.S. Bank have thousands of branches and ATMs across the country. If you need to deposit cash, talk to a person, or withdraw money in person, a traditional bank makes that easy.
The trade-off is cost. Most traditional banks charge a monthly maintenance fee—often $10 to $15—unless you meet one of their conditions. Common ways to waive the fee: keep a minimum balance (often $500 to $1,500), set up direct deposit of your paycheck, or maintain a certain number of debit card transactions per month. Read the fine print before you open the account, because the fee structure varies widely even between branches of the same bank.
Opening an account at a traditional bank takes 15 to 30 minutes in person, or you can start online and finish in a branch. You will need your ID, proof of address, and Social Security number. Some banks let you open an account entirely online and send you a debit card in the mail within 5 to 10 business days.
Credit unions: lower fees and membership requirements
A credit union is a nonprofit financial institution owned by its members. Unlike a bank, which is owned by shareholders, a credit union returns profits to members through lower fees and higher interest rates on savings. Credit unions typically charge no monthly maintenance fee, offer better rates on savings accounts, and charge less for overdrafts.
The catch: you must be a member to open an account. Membership depends on where you live, where you work, or what organization you belong to. For example, some credit unions serve only people who work for a specific employer, live in a specific county, or belong to a union or professional group. A few credit unions are open to anyone, but most have restrictions. Before you visit, check the credit union's website to confirm you meet their membership rules.
To open an account, bring your ID, proof of address, and Social Security number to a branch. Credit unions usually process applications in person on the spot. If the credit union is far away, some let you open an account by mail or online, though you may need to visit in person eventually to verify your identity.
Online banks: no fees, no branches, no cash deposits
An online bank exists only on the internet—no building, no teller, no ATM. Banks like Ally, Charles Schwab, Discover, and Marcus operate this way. Because they have no physical locations, they pass the savings to you: no monthly fees, no minimum balance requirements, and often higher interest rates on savings accounts than traditional banks offer.
The downside is that you cannot walk in to deposit cash or speak to someone face-to-face. You deposit money by transferring it from another bank account, mailing a check, or using mobile check deposit (taking a photo of the check on your phone). Withdrawing cash means using an ATM—some online banks reimburse ATM fees nationwide, others partner with specific ATM networks, and some charge you for out-of-network withdrawals.
Opening an account online takes 10 to 15 minutes. You will upload a photo of your ID, enter your Social Security number, and provide proof of address. The bank verifies your identity and usually approves you the same day. Your debit card arrives in 5 to 10 business days, and you can start transferring money immediately.
Second-chance accounts if you have been denied before
If you have a history of overdrafts, unpaid fees, or fraud, you may be rejected by mainstream banks. ChexSystems and Early Warning Services are the two main systems banks use to check your banking history. If you appear on one of these lists, some banks will still open an account for you—they call these second-chance accounts.
Banks offering second-chance accounts include Chime, LendingClub, Varo, and some regional banks and credit unions. These accounts often have higher fees than standard accounts, lower ATM access, or spending limits, but they let you rebuild your banking history. After 12 to 24 months of good standing, you may be able to move to a regular account with lower fees.
To open a second-chance account, bring the same documents—ID, proof of address, Social Security number—and be honest about your history. The bank will tell you upfront what fees apply and what limits you face.
Comparing the three types: fees, access, and interest rates
| Type | Monthly Fee | Minimum Balance | Cash Deposits | Savings Interest Rate |
|---|---|---|---|---|
| Traditional Bank | $10–$15 (often waived) | $500–$1,500 (varies) | Yes, in branch | 0.01%–0.05% |
| Credit Union | Usually $0 | Usually $0–$25 | Yes, in branch | 0.05%–0.20% |
| Online Bank | $0 | $0 | No, transfer or check only | 4.00%–5.35% |
Interest rates and fees change frequently, so these figures are examples of the typical range. Check the specific bank's website for current rates before you open an account. The difference in savings interest rates matters most if you plan to keep a large balance; the difference in fees matters most if you cannot maintain a minimum balance.
What happens after you open the account
Once your account is open, you will receive a debit card, checks (if you request them), and online banking access. Set up online banking immediately so you can check your balance, transfer money, and set up bill pay. Most banks let you do this the same day you open the account.
If you set up direct deposit—having your employer send your paycheck directly to your account—many banks will waive monthly fees or offer a small bonus. Direct deposit usually takes one to two pay periods to set up, so ask your employer's payroll department for the bank's routing number and your account number.
Keep your account active by using it regularly. Banks sometimes close accounts that sit unused for six months to a year. If you plan to keep money in savings and rarely touch checking, ask the bank about their inactivity policy before you open.
Frequently Asked Questions
Can I open a bank account without a Social Security number?
Most banks require a Social Security number or Individual Taxpayer Identification Number (ITIN). Some credit unions and online banks may open accounts with an ITIN if you are a non-citizen. Call ahead to confirm before you visit, because policies vary by institution.
How long does it take to open an account?
In person at a traditional bank or credit union: 15 to 30 minutes. Online: 10 to 15 minutes. Your debit card arrives by mail in 5 to 10 business days. You can usually start using the account (transfers, bill pay) the same day, even before the card arrives.
What if I do not have a proof of address?
Bring an alternative document: a lease, utility bill, mortgage statement, or government mail dated within the last 60 days. Some banks accept a cell phone bill or insurance statement. Call the bank before you go to confirm what they will accept.
Do I need to keep a minimum balance to avoid fees?
It depends on the bank. Online banks and most credit unions have no minimum balance. Traditional banks often waive fees if you keep $500 to $1,500 in the account, or if you set up direct deposit. Check the specific bank's fee schedule before you open.
Can I open multiple accounts at the same bank?
Yes. Many people open a checking account for daily spending and a savings account for money they want to keep separate. You can open both on the same day. Some banks limit how many accounts you can have, so ask when you open your first one.