What you need to open a bank account online depends on the type of account it is and the application procedures of the particular financial institution. However, there are common rules of the road on this.
Currently, checking, savings, money market, and certificate of deposit (CD) accounts can be opened online. That means you will conduct that process through your personal computer, smart phone, or any other device that connects you to the Internet. Usually the application provides a phone number or live-chat click-on if you have questions along the way.
The first step is to choose the bank you want to do business with online. You find out about them through word of mouth, searching for “online banking” on the Internet, or contacting the bank you already deal with.
The bank you select could be a brick-and-mortar bank that facilitates online applications of accounts, which will remain part of their regular operations. That bank might also handle accounts that only exist in cyberspace. Those usually have no or lower maintenance fees and may provide higher interest rates. In addition there are also Internet or online banks that have no brick-and-mortar presence. Their entire operation is in cyberspace, as are the accounts you open. Since their fixed costs are lower than brick-and-mortar banks, they can provide no or lower fees and higher interest rates.
Each bank has its own requirements for what you need to open a bank account online. Read the terms and conditions. Don’t proceed unless you agree.
Common practices for filling out applications for online accounts include providing:
- Full name
- Date of birth
- Social Security number
- Email address (if you don’t have one, you can get one free from services such as Google or AOL)
- Government ID, such as a driver’s license
- (Sometimes) permission for bank to conduct a credit check
- Signature (Many banks accept electronic signatures and applications, which you scan with your signature. Others require you sign the documents and snail mail that paperwork.)
- Initial deposit. The amount depends on the bank. (This can take the form of transferring funds from another account at that bank or your own bank, scanning a check, billing it to a credit or debit card, or sending a check snail mail.)
The next step is that the bank will review your application. Some are rejected. That could be because of two reasons. One could be a negative credit report. That could contain a low credit score or information about late payments on loans or credit card balances. Another reason could be that ChexSystem, which maintains a database of checking accounts, notifies the bank that you have had problems managing your account in the past. Over time, both those kinds of negative background data about you can be addressed and repaired.
Managing your financial transactions online not only provides 24/7 access, and for what you need to open a bank account online, it could be the most cost-efficient way to go.