How To Open An Online Checking Account: A Step By Step Guide For Beginners

Filed in Online Banking by on December 2, 2020 0 Comments

You can now open a checking account online and manage your account securely by signing in on your phone or computer, instead of waiting for the bank to open first.  

You can check your balance, deposit a check, transfer funds or authorize a bill payment from almost anywhere using your smart device of choice.

While banks and credit unions may offer online banking, online banks may offer additional incentives such as higher interest rates or rewards. Follow these six steps to compare your checking options, find an account that fits your needs and learn how to open a checking account online.

How To Open An Online Checking Account

1. Research your Options

The first step may be the most time-consuming, but it’s time well spent. Familiarizing yourself with the features of the checking account before opening a checking account online can help ensure that you are happy with the account once you are up and running. Don’t know what to look for? Here are several features that you might want to keep in mind:

  • FDIC insurance: Verify that your funds on deposit are insured by the Federal Deposit Insurance Corporation (FDIC) up to the maximum allowed by law. This insurance kicks in if an FDIC-insured bank or financial institution fails. You can check the FDIC’s BankFind tool to determine which financial institutions offer this protection.
  • Interest or rewards: Because online banks don’t have to pay to operate branch locations, they may pass the savings on to consumers in the form of higher interest rates, fewer fees or rewards (think cash back when you use a debit card).
  • Potential fees: As with traditional checking accounts, opening an online checking account could come with a variety of fees. Some banks, for example, may charge you if your account’s daily balance falls below a specific dollar amount. You may want to consider ways to avoid bank fees, like selecting a bank that doesn’t require a minimum daily or monthly balance so you have extra flexibility. Don’t forget to check out fees for overdrafts, insufficient funds, ATMs and wire transfers.
  • Readily available ATMs: Because online banks may not have branches where you can withdraw cash, no-fee ATMs that are easy to access can make all the difference. While some banks won’t charge a fee for an ATM transaction, the ATM’s operator may still do so. To avoid this, look for a bank that offers to refund ATM fees or that has ATMs that are part of a large, ATM network that doesn’t charge a fee.
  • Easy deposits: Most online banks accept deposits by mail, ACH transfer, wire transfer and direct deposit. But one of the most convenient ways to deposit money is through a mobile banking app.
  • Options for bill pay: If you enjoy writing checks, you may want to open an online checking account that doesn’t charge for them. Alternatively, online checking accounts may come with no-fee bill pay.
  • An easy-to-use mobile app: If you’re taking your banking online, you may also want to manage your money from your phone. The bank’s mobile app should allow you to check your balance, deposit a check, transfer funds or authorize a bill payment from almost anywhere using your smart device of choice.
  • Customer service: When you have a question or need assistance, you’ll want someone to be available to help. Although there won’t be a branch you can walk into, you may have the option of contacting a banker over the phone, by email or with online chat.

2. Create a Profile

Once you have decided where you want to open an online checking account, you will probably need to start by creating an online profile. It’s not too different from creating any other online account.

To improve the security of your account when opening a current online account, try choosing a long password consisting of letters, numbers and symbols; that you do not use for other accounts; and it does not depend on personal information such as your date of birth.

3. Gather Required Documentation

Most online banks have a simple application that you’ll need to complete to open an online checking account. You’ll likely need to provide personal and contact information such as:

  • Your full name, date of birth and mother’s maiden name
  • Your Taxpayer Identification Number (often a Social Security number)
  • A U.S. mailing address (not a P.O. box) and possibly a previous address
  • Your email address and phone number.

If you are under 18, you will need a parent or guardian to agree to supervise your account. Or maybe you’re opening a joint account with a family member or significant other. In either case, you will need the above information for each person who will be associated with your new account.

4. Complete the Online Application Process

The online bank account opening application can only take a few minutes if you have a phone or computer and the necessary documentation.

Your bank will take you through a series of prompts to verify your identity, confirm the specific product (account) you want and give you a chance to read the terms and conditions. You will type the required information into text fields inside of online forms.

It’s a good idea to read through the bank’s terms and conditions before agreeing. They typically include information about rules, fee structures and interest rates.

5. Fund your Account

Once you’ve entered all of your information, you’ll have to decide how to fund your account, which is an important step when learning how to open an online checking account. If there is a minimum deposit requirement, you’ll need to deposit at least enough money to fulfill the requirement. Generally, it’s easy to fund your new account by transferring money directly from another bank. Alternatively, you can mail a check when you’re opening an online checking account.

6. Use your New Checking Account

Once you know how to open a checking account online, you’ll be a few days away from being completely set up. If you order a debit card or checks, they should arrive in the mail shortly. You’ll also be able to create your personal identification number (PIN) so you can use your new debit card. In the meantime, you may be able to use your online account to transfer funds and pay bills online.

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