With fees continuing to increase for traditional checking accounts, more people want to open an online checking account, for business or personal use. Another reason is that they have become comfortable with online banking. A survey by the American Bankers Association found that 62 percent actually prefer doing transactions online. Given that most online accounts are insured by the FDIC, the concern about security is reduced. And with the ubiquity of smartphones and tablets, who can resist the convenience of never having to “go to the bank” again.
Those online accounts operate in cyberspace, not in brick-and-mortar. Since that eliminates the expense of a physical presence, financial institutions can offer the service without many of the standard fees. In addition, some provide features such as interest, bonuses, and rewards.
As with credit cards, those features for online checking are increasing in number and diversity. That is how financial institutions are competing with each other for market share and brand differentiation. Therefore the first step in starting online checking is to review the array of packages offered. Then figure out the best deal for your specific business or personal needs. In addition, you must verify that the institution insures accounts through the FDIC. Not all do. To find out what your options are, you can talk with your financial advisor. You can read the materials sent to you by financial institutions and the ads in the media. You also can surf the web under keywords “Online Checking Accounts” or use a resource such as Nerdwallet.com or Top Ten Reviews for online banking.
The next step in opening an account is filling out an application with the institution you select. That can be done on the Internet through a computer or gadget. If the institution is among those, such as national banks, which also have brick-and-mortar facilities, then you can apply in-person. The information you need to furnish usually includes:
- Full name
- Date of Birth
- Social Security Number
- Email Address (Required)
- Form of Identification (If done online, then most accept the driver’s license number)
In addition, you must make a deposit. How much that will be depends on the institution’s policies and procedures. If done online, funds can be transferred from your current financial institution or you can send snail mail a money order or check.
Have bad credit or are in the Chex System for a number of bad checks? You may still be able to take advantage of online checking. Some financial institutions provide what is called “Second Chance” online accounts. Unlike most other online checking accounts there is usually a fee. However, they provide the opportunity to rebuild your credit rating.
If you want the right fit for your needs and to take maximum advantage of the perks, you will probably have to invest as much time choosing where to open your online checking account as you do selecting a credit card. Also, as with credit cards, read the fine print or “terms and conditions” carefully. The convenience should not distract from the reality that this is serious business.