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Banking has come a long way since the days of our parents.
These days, thanks to the online banking revolution, banking tasks are much easier to manage. After all, two-thirds of Americans do most of their banking online, according to one American Banking Association survey.
To start saving time with online banking, you’ll first need to open up a bank account online. If you’ve never done it before, it’s a lot easier than you might think.
What Does it Mean to Bank Online?
Online banking is a style of bank account management in which you can complete almost all banking activities online. By banking online, you can open your account, transfer money between accounts, send money to friends and family, and pay bills — all from your phone or computer.
Banks that offer online banking can be entirely online. In other words, there are no physical branches that you can visit. Other types of banks offer both options, where you may be able to visit a branch location and conduct your business online, depending on what is most convenient for you.
It’s important to note that if you choose an online-only bank with no physical branches, you may be limited in your ability to use cash. With these banks, you may not be able to withdraw or deposit cash at all, unless you use an ATM.
Furthermore, many online banks only allow you to withdraw cash at an ATM but don’t accept cash deposits, even at special deposit-accepting ATMs.
Where to Open an Online Bank Account
Fortunately, there are many options for places to open an online bank account.
Check if Your Local Banks Offer Online Banking
The first option is to check with your current bank to see if they offer online banking. These days, most banks offer this option, with the exception of small banks and credit unions.
Start with your bank’s website. If you can’t find the information you’re looking for, give them a call and ask what the process is like for current members to set up online banking.
CIT Bank offers great rates on its savings accounts. If you’re interested in opening an account here, you can do it entirely online.
You’ll need to provide your Social Security Number and your driver’s license number (or other state ID number). Finally, to make an opening deposit, you’ll also need to write yourself a check from your current bank account or provide your routing and account numbers to fund your initial deposit.
Discover Bank also offers some great high-yield accounts you can open entirely online.
The process for opening an account at Discover Bank is simple. Again, you’ll need to provide details like your Social Security Number, name, email, etc. Discover Bank’s savings account has no minimum deposit requirements, so you don’t need to transfer any money to fund your account right away.
BBVA Compass takes it a step further than some other banks by offering a Consumer Switch Kit. This kit helps you completely switch banks, including setting up direct deposit to your new bank account and checking to make sure all your financial information points to your new bank.
Steps to Open a Bank Account Online
Opening a bank account online is often easier than doing it in person. After all, how many times have you gone to apply for something in person and forgotten a key document you need?
With online banking, you don’t have to worry about that because you apply right from the comfort of your home.
1. Gather Your Information
Banks are required by law to verify your identity. The easiest way to do this is by checking your government-issued identification.
It’s handy to have a scanner or scanner app handy, since you may be required to scan the entire document. In other cases, the bank will only ask for the identification number. In particular, you may need these documents:
- Social Security Number or Social Security Card
- Driver’s License Number or Driver’s License (or other state-issued ID)
If you’re not a U.S. citizen, you may also need to scan and send in your immigration papers.
2. Research and Choose an Online Bank
The next step is to find a bank you’d like to open an account with.
If you’re happy with your current bank, you can check with them to see if they offer online banking. That way you won’t need to open a new account. If your current bank doesn’t offer an online option or you’re not satisfied with the products and services, there are plenty of alternatives to choose from.
Try searching for banks according to what’s most important for you. For instance, maybe you prefer the highest-rated banks for customer service or the banks that have the highest APY on savings accounts.
3. Choose Your Account
Once you’ve narrowed it down to a particular bank, it’s time to choose what accounts you want to open.
Most banks require customers to open one savings account at a minimum. If you choose a credit union, you’ll need to make a small deposit in a savings account to establish your membership before you can open any other account types.
4. Complete Your Application
Now it’s time to actually apply for these accounts. You can usually apply for all of your chosen accounts at the same time rather than completing a separate application for each account.
You’ll need to provide the documentation you gathered earlier in this step as well as details about yourself such as your name, address, and phone number. If you’re applying with a credit union, you’ll need to provide proof that you meet the membership criteria.
Some banks require you to mail in a page with your signature on it so they know what it looks like. You may have to print out and mail in a form or wait for them to send you a form with a stamped envelope to mail back. This can take a few days to process, so keep this in mind if you’re looking for a bank account you can open and start using quickly.
5. Fund Your Account
The last step is to make an opening deposit. The easiest way to do this is by linking your current bank account by providing your new bank with the necessary routing and account numbers.
Some banks will make a small test deposit of $1.00 or less into your account to verify that you actually do own the account. If this happens, you’ll then need to go back to your new bank and report the exact amount of the deposits to confirm the link between the two accounts.
From there, you can deposit as little or as much as you want into the new account and close your old one if you wish.
FAQs When Opening a Bank Account Online
Here are the answers to some popular questions that come up regarding banking online.
Are There Any Free Bank Accounts Online?
Yes, there are many free bank accounts available. You’ll need to be careful to read the fine print though so you understand exactly what fees are involved. You can find all of the information you need in the bank’s Schedule of Fees or Truth-In-Savings Disclosure.
For example, some banks don’t charge any fees at all and are thus truly fee-free. Other banks advertise as being “free” because they don’t charge a monthly fee. However, they may come with other fees such as overdraft charges or inactivity fees.
Can You Open a Bank Account Online with No Deposit?
This depends on the bank’s policies. Some bank accounts have minimum opening deposit requirements while other banks have no minimum requirements at all.
The best way to know is by contacting the bank or reading through the fine print.
Can You Open a Bank Account Without a Photo ID?
You’ll be hard pressed to find a bank that doesn’t require a photo ID. In fact, most banks require two forms of ID in order to open a bank account online or in person.
Opening an Online Bank Account is Easy
The internet has made many everyday activities easier, and opening a new bank account is no exception. As long as you have the right documents in place and a way to scan them, opening a bank account online shouldn’t take more than a few minutes of your time.
Best of all, you only have to do it once and you’ll be all set with your new online bank.
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