Opening a bank account is the first step to financial freedom. To perform any transaction, pay for goods online, buy flight tickets, invest in stocks or even trade the financial markets, you must have a fully functioning bank account. Having a bank account also allows you to manage your finances, access credits, save up money and receive interest on the money saved. The merits of having a bank account are endless, and you would only be doing yourself a great deal of good if you get one as soon as you can.
The world has become a global village where everything can be done online. The advent of the internet has made accomplishing tasks that were once herculean so easy. The world is easier to access now just with your phones and computers. This technological advancement undoubtedly cuts across all fields, with the banking sector not left out as well. In times past, to perform any transaction, you have to be physically present in the bank. With banks moving with the trends, deposits, savings, and even withdrawals can be made without being physically present in the bank.
Even with all these online features banks offer, it is common see people ask if bank accounts can be opened without going to the bank. The answer to this question is not as hard as it seems. Bank accounts can be opened online. Although most banks allow customers to open bank accounts with them online, certain criteria must be met before a person can be granted access to open a bank account. Banks can also prevent people from opening an account with them if they have a history of mismanaging funds or a negative credit score.
Criteria Needed to Open a Bank Account Online
As easy as opening a bank account online is, some information will be demanded from you to verify your identity. Be rest assured. These are basic information that you already have prior to opening the account.
- Personal Information: To open a bank account online, you will be required to share some detail about yourself. This is compulsory so that the bank can save your details and open an account for you. Some of the details you might be required to drop include your name, social security number, date of birth, and any government-issued issued ID numbers such as driver’s license, U.S. military ID or passport.
- Contact Information: Apart from your personal information, banks require you to drop your residential address, phone number, email address, post office box or mailing address or any other relevant information the banks can reach in case of any contingency.
- Funding Information: Another criterium that banks may require before allowing you to open an online account with them is your previous accounts’ routing number and account number. For banks that require an initial minimum opening deposit, the amount to be deposited is deducted from the funding information given by the customer. This minimum opening deposit is usually in the range of $25 to $100.
- E-Signatures: After providing all the necessary information to open the bank account online, the bank will need you to sign legal agreements with an e-signature. After this, your bank account is ready for use. It should be noteworthy that some banks will prefer a normal signature to an e-signature to complete opening an account online. After dropping all your details and information, you will still be required to physically go to the bank to sign so that the bank account can be fully functional.
Challenges Faced While Opening a Bank Account Online
You may find it difficult to complete opening a bank account online. This can be due to some reasons. You don’t have to panic if this happens, as you can try again after rectifying the issue, and your online bank account will be ready. Below are some of the issues faced during opening bank accounts online.
- Low Credit Score: Your credit score is an important determinant that banks affirm before approving an online bank account. If you have a history of overdrawn checking accounts after verification, there is a high chance that the process will fall out. Also, if you have “thin” credit, probably because you are still young and don’t have a rich credit history as you haven’t borrowed enough, your request to open a bank account online may not be granted.
- A Hint of Fraud: After applying to open a bank account online, banks check your account history. You may be denied at the slightest whim of fraud or any suspected criminal activity. It is, therefore, important to know the state of your checking account history before opening a bank account online to prevent frequent denial.
- Under Age: Statutorily, persons below the age of 18 cannot open bank accounts independently. This same regulation also apply when a person below 18 wants to open an account online. Although there are special provisions under which a minor can get a special bank account, this is better done with an adult co-signer and a visit to a bank branch.
- Citizenship: It is easier to open a bank account if you are a citizen of the country you reside. Apart from access to the documents and information required to complete the online process, there are extra criteria that are needed by a non-citizen to open a bank account online. This doesn’t mean that a non-citizen cannot open an online bank account. It might become compulsory to visit a physical branch to complete the process along the way.
- Corporate Accounts: Opening a corporate account requires more details than a normal personal account. Due to the other necessary documents such as employer identification number, business formation documents, business licenses and permits that need to be submitted, a physical presence in a local bank might be inevitable. In recent times, provisions have already been made such that these documents can be sent by mail to the bank branch, but all banks haven’t yet incorporated them.
Advantages of Opening Bank Accounts Online
With most people preferring to do virtually everything from the comfort of their rooms, the number of individuals using online services to get their daily needs keeps increasing. This is the same case for bank account opening. There is no difference between an account opened online, and another opened physically in the bank. They can both perform the same basic financial transactions. Opening a bank account online gives you the opportunity to enjoy additional benefits that you may not get if you visit a bank to open an account. The advantages you stand to gain if you opt to open your bank account online instead of visiting a bank branch include:
- Ease and Convenience: It is relatively easier to open a bank account online than visit the bank. With some clicks on your phones and computers, you can get yourself a working bank account; easy-peasy!
- Saves Time and Resources: A big advantage of opening a bank account online is that you don’t have to go through the exactingness of long queues or the stress of travelling. This gives you time to focus your resources on other productive activities. Also, online services are open 24/7, which means you can just go to your bank’s website and open a bank account without any worries.
- Security of Funds: Having an online account gives you security because you alone have access to your account. No cashier knows your balance. You are your own banker.
How to Open a Bank Account Online
There are a few steps that you have to follow to open a bank account online. These steps are:
- Find a Bank That Suits Your Need: The first step to consider on the way to opening a bank account is to find a bank that suits the purpose of opening the account. Some banks require zero deposit after opening an account, while some require an initial “minimum opening deposit”. Online banks such as Chime, Current, Sable, Capital One 360 checking require no minimum opening deposit, charge no service or maintenance fees and give interest on money saved.
- Choose the Type of Account You Want: Another decision to make before opening an account is to know the purpose the bank account will serve. If the account is used for paying expenses or making transactions online, then a checking account may be the best for you. If it is just for savings and not so many transactions, you can go for a savings account. You can also check if the bank is FDIC-insured to know if you would be able to get your money back if the bank fails.
- Fill Out the Bank’s Application Online: After determining the type of bank account you want, go to the desired bank’s website and fill out the account opening application form. You would be required to provide personal details and other necessary information that will be used to verify your identity.
- Fund Your Online Bank Account if Required: After submitting your details, you might be required to fund the newly created account to get your bank account running. This might take a few days before the process is completed, and then you can take charge of your bank account and start managing it.
What to Do if You Can’t Open a Bank Account Online
You might get stuck while opening a bank account online even after following the steps above. If you face this problem, do not panic. There are alternatives you can explore and things you can do to get your bank account working. Some of the processes you can take if you can’t open a bank account online are:
- Understand why the bank rejected your application, resolve them and apply again.
- Try opening an account online with a different bank and see if you will be successful this time around.
- If your rejection is mismanagement of funds due to account abuse or serial overdrafts, clear your ChexSystems report to remove this anomaly.
- Use alternative banking solutions such as a second-chance checking account or prepaid cards till your problem is solved, and you can open a bank account online.
Frequently Asked Questions
There are some other frequently asked questions about opening a bank account online. Some of them include:
How Much does Opening a Bank Account Online Cost?
People often wonder if it will cost them to open bank accounts online. You don’t have to pay to have a bank account opened online. This sounds amazing, right? However, some banks require you to deposit some amount for you to be able to use the account. This initial deposit can be made by transferring money from another account or payment by checks and prepaid cards.
Who can Open a Bank Account Online?
Anybody can open a bank account online, although people under the age of 18 will need an adult to co-sign for them as they cannot open an account on their own and might be required to physically visit a bank branch to complete the process.
How Many Hours Will Opening a Bank Account Online Take?
It doesn’t take a lot of time to open a bank account online. You simply need to observe some procedures. On average, it takes less than 15 minutes to complete all the processes involved in opening a bank account online.
What Banks Can I Open an Online Bank Account With?
You can open a bank account online with virtually all banks, including national banks, although a few regional credit unions and banks are an exception to this. Some banks operate online without having physical branches. Top online banks are FDIC-insured, and they offer higher rates with little or no service charges. Opening an account with online banks is exclusively done online.
Closing Thoughts
Banking has become so easy that you can do almost every financial activity from the comfort of your bed, including opening a bank account without going to the bank. Instead of going through the struggles of physical banking, why not save yourself the stress, time and resources by opening a bank account online. Open a bank account online and enjoy banking at your convenience and with additional features. To know more about some banks and how you can open an account online with them, you can check here.
