These days, online banking has become more and more prevalent. Whether you want to make a mobile deposit, transfer money between your bank accounts, pay bills, or even pause or activate your debit card, nearly everything you want to do in personal finance can be accomplished online. That said, if you want to take advantage of all the wonderful features online banking offers, you have to have a bank account in the first place. And that leads us to one, very important question: can you open a bank account online?
Yes, these days, many financial institutions will allow you to open a bank account online. To do so, you will need to provide your name, address, email, social security number, and a government-issued ID number. Additionally, depending on the account you are opening, you may need to provide an initial opening deposit to get started.
Now, being the personal finance nerd that I am, I have opened quite a few bank accounts online. Between savings accounts, checking accounts, money market accounts, and even investment brokerage accounts (I know that’s not technically a bank account, but you get my point), I have plenty of experience in this arena.
So, to put it simply, if you’ve never opened a bank account online, you’ve stumbled upon the perfect article (not to pat myself on the back or anything).
For the rest of this guide, I’m going to explain, step-by-step, how to open a bank account online. Additionally, if you’re not sure where you’d like to open an account, I’m going to introduce you to a few of my absolute favorite online bank accounts, and why I recommend them to our readers. So, if you’re ready to get started, but want to avoid as much headache as possible, keep reading.
Step 1: Select A Bank Account
The first, and most obvious, step in opening a bank account online is selecting the account you are going to actually open. And, while this step might seem pretty straight forward, there are a couple major considerations you should take into account.
Starting off, you need to determine the type of account you would like to open. Now, if you’re in need of a bank account that allows you to easily pay bills and spend money, then your obvious choice will be a checking account (see our recommendation below).
However, if you are looking for a good place to put your savings, then, here at Be The Budget, we recommend either a money market account and a high yield savings account. Now, to be honest, there isn’t a whole ton of difference between these two types of accounts. They both tend to earn better interest rates than a checking account, which allows your money to grow a little bit each year. However, money market accounts will oftentimes allow you to write checks or spend money directly from them.
So, if your reason for opening a bank account online is to save for a big purchase (like a down payment on a house), or emergencies, then a money market account may be the right choice for you.
On the other hand, if you struggle to fight the temptation to dip into your savings, and an extra layer of spending-restriction might do you some good, then a savings account is probably your better option.
If you’ve spent any time reading Be The Budget, you probably know that I hate fees in just about any area of personal finance. Whether it’s monthly maintenance fees, minimum balance fees, ATM fees, investment fees, or anything else, I do my best to reduce the amount of money I spend on things that detract from my net worth.
And when it comes to banking, I truly believe that if you are spending any amount of money on fees, you should take your money and move it into an account that won’t charge you any (or, at least gives you an easy way to get out of them).
Seriously, by putting your money into a bank, you are providing them with the capital they need in order to fund the loans they issue. And when they charge you a monthly fee, it is kind of like double-dipping.
Now, to be clear, I have no problem if a bank decides to operate like that. It’s their business, and they can run it as they see fit. But as long as there are other banks that won’t charge me those same fees, you can bet that’s where I’ll choose to put my money.
To put it as simply as possible, if you’re going to open a bank account online, look for an account that either, doesn’t charge you fees, or gives you an easy way to avoid them.
Check Out These Related Posts:
- 10 Best Ways To Avoid Checking Account Fees
- Can You Deposit A Check For Someone Else?
- Best (And Worst) Places To Keep An Emergency Fund
- Can You Open A Savings Account Without A Checking Account?
- How To Get A Debit Card (3 Simple Steps)
Recommended Bank Accounts You Can Open Online
Once you’ve decided on the type of account you’d like to open online, the next step is actually making your selection. But where should you open a bank account?
With so many different financial institutions out there offering bank accounts that you can open online, it can be hard to decide which one makes the most sense for you.
Luckily, here at Be The Budget, we have done a ton of research, and even opened quite a few bank accounts in order to figure out, exactly, what makes an online bank account awesome.
So, if you’re looking for a good place to keep your money, here are our recommendations for bank accounts you can set up online.
Since a checking account is the central hub for all your financial activity — from paying bills to buying groceries — setting yourself up with a good checking account is an essential part of your overall financial well-being. And if you’re looking for a checking account that you can open online, here is what we recommend:
If you’re thinking about opening a checking account, our hands down favorite account is Axos Bank’s Essential Checking account. Here’s why:
- Quick To Open – Since Axos is an online bank, they have made the process of opening a bank account online about as simple as possible. In fact, it shouldn’t take you more than about 15 minutes to open your account.
- No Monthly Maintenance Fees (And More) – With an Axos Essential Checking, you won’t be charged monthly maintenance fees, overdraft fees, or minimum balance fees. Plus, they offer unlimited domestic ATM fee reimbursements.
- Faster Access To Direct Deposits – The Direct Deposit Express feature can give you access to your money two days earlier than most other banks. That means you’ll have quicker access to your hard-earned money, which we really like.
Around here, we spend a lot of time talking about savings accounts. Whether you are piling-up cash for emergencies, vacations, a wedding, a house, a car, or just about anything else, a savings account is a great place to keep your money. And the best news is, there are all sorts of great options out there.
So without further ado, here are the savings accounts we recommend, and why.
The Axos High Yield Savings account is one of our absolute favorites for a few key reasons.
- Like the aforementioned Axos Essential Checking account, you don’t have to worry about monthly maintenance fees or minimum balance requirements. So, if the purpose of setting up your account is to save for a large purchase, (i.e. a car or a down payment on a house), you don’t have to worry about spending every last dollar of cash you piled up for that particular purchase.
- Good Interest Rate – In the world of savings accounts you aren’t going to find the kind of interest rates you can get from investing in things like stocks, mutual funds, or ETFs. That’s just the way it is. However, that doesn’t mean that you should just accept a sub-par interest rate that only earns 0.1% every year. Especially when the Axos High Yield Savings account beats the national savings account interest rate by a significant margin.
- Low Opening Deposit – Oftentimes, savings accounts that earn a decent interest rate will require you to open an account with a pretty hefty sum of money. Meanwhile, the Axos High Yield Savings only requires an opening deposit of $250.
Next up on our list of recommended savings accounts is the CIT Savings Builder. In fact, this was the very first bank account I opened online. So, I speak from experience when I tell you that this account is a great place to start for someone that has never gone through the process of opening a bank account online. Here’s why:
- No Maintenance Fees – Like I said before, when you open a bank account, you should avoid monthly maintenance fees like the plague. And if you open a CIT Savings Builder, you will never have to worry about them.
- Good Interest Rate – The CIT Savings Builder also allows you to earn an interest rate that beats the national average. However, in order to earn the top-tier interest rate, you either need to maintain an average monthly balance of $25,000, or deposit at least $100 into your account each month. So, if you don’t think you can meet either of those requirements, then you might want to opt for the Axos High Yield Savings instead.
- Great Online Banking Experience – There’s no two ways about it, CIT Bank takes simple and intuitive to a whole new level with their online banking experience.
- Low Minimum Opening Deposit – With a minimum opening deposit requirement of only $100, the CIT Savings Builder has an extremely low barrier to entry. Just another reason why this savings account made it onto our list of favorites.
Another favorite on our list of recommended savings accounts is the Ally Online Savings. Like the other two, you can open it in a matter of minutes, but there are a few special features that you might find really helpful.
- Buckets – If you have more than one savings goal, but don’t like the idea of keeping your money in multiple savings accounts, Ally created a pretty cool tool they call Buckets. Essentially, buckets allow you to visualize your money in theoretical groups, so that you can stay organized, and know exactly how much money you have saved for your various goals.
- No Minimum Opening Deposit – If you’re looking for a savings account that you can open with $0, then an Ally Online Savings account is just the ticket.
- No Monthly Maintenance Fees – Like the other two accounts, if you open an Ally Online Savings account, you will not be charged monthly maintenance fees (which is really nice). Beyond that, Ally is very transparent about the fees they do charge, so it is easy to avoid them.
Money Market Account:
As we discussed earlier, if you feel like you’d like slightly easier access to your savings (for things like emergencies, or large purchases for which you’ve been saving) then a money market account might be your preferred method for saving. But if you’ve never looked into money market accounts, or you just aren’t sure where to start, here are the accounts we recommend.
If you haven’t caught on by now, you should probably know that we are huge fans of Axos Bank. And when it comes to money market accounts, once again, they don’t disappoint. Here’s why:
- No Monthly Maintenance Fees Or Minimum Balance Requirements – Similar to most of the savings accounts we recommend, you will not be charged a fee for monthly maintenance or dipping below a minimum balance.
- Check Writing Privileges – As I mentioned earlier, one of the biggest benefits that money market accounts have over savings accounts, is that many of them allow you to write checks directly from them. So, if the purpose of your savings is to eventually use the money to make a purchase (i.e. a new car, a new house, etc.), or protect you in the event of an emergency (i.e. unexpected medical bills) this account is a great place to keep your savings.
- Good Interest Rate – Like the savings accounts I mentioned earlier, this account offers a nice interest rate.
Step 2: Provide Your Information
Once you’ve decided on the type of account you’d like to open, and which financial institution you’re going to use, your next step will be to actually open the account. And the very first thing you’ll need to provide is some personal information.
So, if you want the process of opening a bank account online to go as smoothly as possible, be sure to have the following information ready:
- Date Of Birth
- Social Security Number
- Physical Address
- Email Address
- Contact Information
- Government Issued ID Number (i.e. drivers license)
- Joint Account Holder information – If you are opening a joint bank account, you will need to provide the same information for the other person attached to the account.
- You may also need to provide your initial funding information, but we will go into that a little further in step 4.
Step 3: Sign And Agree To Terms
After filling out your information, you will likely need to sign a terms of agreement and any other required documents for opening your bank account. Now, I have opened a few bank accounts online, and in my experience, each financial institution does things a little bit differently.
Therefore, if you are unsure about what you are reading, don’t be afraid to give them a call in order for them to explain things a little further. As with any contract, it’s important for you to do your due diligence. So, don’t be afraid to ask questions or get further clarification on anything that doesn’t make sense to you.
Step 4: Fund Your Account
After signing all the required documents, you will need to fund your bank account. And, the easiest way to do this is by transferring the money from a different bank account.
So, if you already have a bank account set up somewhere else, that is your best option.
However, if this is your first bank account, you may need to fund your account by sending a check or money-order through the mail. That said, if you find yourself in this situation, we recommend reaching out to your financial institution directly in order to determine the best method for funding your new account.
Step 5: Set Up Your Account Profile / Mobile App
The fifth, and final, step in opening up a bank account online is to set up your online banking profile, and mobile app.
After all, since the entire point of setting up an online bank account is to start banking online, this is one of the most important steps. And since you’re already knee-deep in the process, I find it’s easiest to just set everything up right from the start.
These days, if you want to open a bank account online, you have plenty of options. From checking accounts to savings accounts, and even money market accounts, it only takes a few minutes, and 5 simple steps to set yourself up a shiny new bank account.
Also, if you’re interested in opening a bank account, but aren’t sure where to start, here are a few links to the bank accounts we recommended in this post:
Recommended Checking Account:
Recommended Savings Accounts:
Recommended Money Market Account:
So, why do you want to set up a bank account online? Leave a comment below.
Also, if you haven’t already, be sure to subscribe to Be The Budget. Our community of money-savers, side hustlers, budgeters, debt-free achievers, and financial-freedom seekers, is getting bigger and more awesome by the day, and we’d love to have you join in on the fun!