Your main choices are traditional banks, credit unions, and online-only banks
You can open a checking account at a brick-and-mortar bank branch, a credit union, or an online bank. Each route has different requirements, fees, and features. The right choice depends on whether you want in-person service, how much money you plan to keep in the account, and what fees matter most to you.
Traditional banks like Chase, Bank of America, and Wells Fargo have physical branches where you can deposit cash and speak to someone face-to-face. Credit unions are member-owned financial institutions that often charge lower fees and offer better interest rates, but membership is usually limited to people who work in a certain industry, live in a certain area, or belong to a specific organization. Online banks like Ally, Charles Schwab, and Discover have no branches but typically charge no monthly fees and pay higher interest on deposits.
Key Takeaways
- Traditional banks offer in-person service and cash deposits at branches, but often charge monthly maintenance fees unless you meet balance or direct deposit requirements.
- Credit unions typically have lower fees and better rates than banks, but membership depends on your employer, location, or affiliation with a specific group.
- Online banks charge no monthly fees and pay higher interest, but you cannot deposit cash in person and customer service is phone or chat only.
- You will need a government ID, proof of address, and usually a small opening deposit to open an account at any institution.
- Some banks and credit unions offer second-chance accounts if you have been denied in the past or have a negative banking history.
Traditional banks: when you need a branch and a teller
A traditional bank is the right choice if you deposit cash regularly, need to speak to someone in person, or want a familiar name with branches near your home or work. Banks like Chase, Bank of America, Wells Fargo, and regional banks like PNC and U.S. Bank have thousands of branches nationwide.
The trade-off is fees. Most traditional banks charge a monthly maintenance fee—typically $10 to $15—unless you meet one of their requirements. Common ways to waive the fee are keeping a minimum balance (often $500 to $1,500), setting up direct deposit, or maintaining a certain number of debit card transactions per month. Read the fee schedule before you open the account, because the requirement that sounds easiest to you might be the hardest to maintain.
To open an account at a traditional bank, visit a branch with a government ID (driver's license or passport), proof of your current address (a utility bill or lease), and usually a small opening deposit—often $25 to $100. Some banks let you open online and then visit a branch to deposit cash later. Ask whether the bank uses ChexSystems, a checking account verification system; if you have been denied accounts before, the bank will check your history there.
Credit unions: lower fees and better rates if you meet membership requirements
Credit unions are nonprofit organizations owned by their members. They typically charge lower fees than banks, pay higher interest on savings, and offer lower rates on loans. The catch is that membership is restricted—you must work for a certain employer, live in a certain county, belong to a certain organization, or have a family member who is already a member.
To find a credit union you can join, use the CO-OP Network locator or the Alliant Credit Union locator online. Search by your employer name, your zip code, or your affiliation. Many credit unions have no monthly maintenance fee at all, or waive it with a small minimum balance of $100 or less. Some credit unions also offer second-chance checking accounts for people with banking problems in their past.
Opening an account at a credit union works the same way as at a bank: bring a government ID, proof of address, and an opening deposit. You may also need to show proof of employment or membership may be able to access. Credit unions are insured by the National Credit Union Administration (NCUA), which protects your money the same way the FDIC protects bank deposits—up to $250,000 per account.
Online banks: no fees, but no cash deposits and no branches
Online banks like Ally, Charles Schwab, Discover, and Chime operate only on the internet and through mobile apps. They charge no monthly maintenance fees, pay higher interest on checking balances than traditional banks, and have no minimum balance requirements. The trade-off is that you cannot walk into a branch, deposit cash in person, or speak to someone face-to-face.
Most online banks let you deposit checks by taking a photo with your phone and uploading it through the app. If you need to deposit cash, some online banks partner with ATM networks or convenience stores like CVS and Walgreens where you can deposit cash for free. A few online banks, like Chime, offer partnerships with retailers where you can get cash back without a purchase. Before you open an account, check whether the bank's deposit methods work for how you actually handle money.
To open an account at an online bank, you do everything on your phone or computer. You will need a government ID, proof of address, and a Social Security number. The bank will verify your identity electronically and usually fund the account within one to three business days. Online banks are insured by the FDIC just like traditional banks.
Second-chance checking accounts for people with banking problems
If you have been denied a checking account, closed an account with a negative balance, or have a history of overdrafts or fraud, you may still be able to open a second-chance checking account. These accounts are designed for people with banking problems and usually have higher fees, lower limits on debit card transactions, and stricter overdraft rules.
Traditional banks like Chime, LendingClub, and some regional banks offer second-chance accounts. Credit unions often have them too. The account will still be reported to ChexSystems, so opening a second-chance account will not erase your history, but it shows that you are working to rebuild your banking relationship. After you maintain the account responsibly for six months to a year, you may be able to move to a regular checking account with lower fees.
What you need to bring or provide to open an account
Every bank and credit union will ask for the same basic information. You need a government-issued photo ID—a driver's license, passport, or state ID card. You need proof that you live at your current address, usually a recent utility bill, lease, or bank statement with your name and address on it. You need your Social Security number so the bank can verify your identity and check ChexSystems.
Most institutions also ask for an opening deposit, though the amount varies widely. Traditional banks often ask for $25 to $100. Credit unions and online banks may ask for $0 to $50. Some banks waive the opening deposit if you set up direct deposit. If you do not have a government ID, some banks will accept a passport card, tribal ID, or military ID. Call ahead if you are unsure whether your ID will work.
Comparing the three routes: a quick reference
| Feature | Traditional Bank | Credit Union | Online Bank |
|---|---|---|---|
| Monthly fees | $10–$15 (often waived with requirements) | $0–$5 (often no fee) | $0 |
| In-person service | Yes, at branches | Yes, at branches | No |
| Cash deposits | At any branch | At any branch | Limited or through partners |
| Interest on checking | Usually 0% | Usually 0–0.25% | Usually 0.01–0.50% |
| Membership requirements | None | Employer, location, or affiliation | None |
| Opening deposit | $25–$100 | $0–$50 | $0–$50 |
Frequently Asked Questions
Can I open a checking account online and then use it right away?
Online banks let you open and fund an account entirely through your phone or computer, usually within one to three business days. Traditional banks and credit unions may let you open online, but you often need to visit a branch in person to verify your identity and make your first deposit. Call or check the website before you start the process.
What happens if I have been denied a checking account before?
Banks check ChexSystems, a database of banking problems. If you were denied before, the bank will see it. You can still open a second-chance account at banks and credit unions that offer them, though fees may be higher. You have the right to see your ChexSystems report for free once per year at chexsystems.com.
Do I need a minimum balance to avoid fees?
It depends on the bank. Online banks and many credit unions charge no monthly fee regardless of balance. Traditional banks often waive fees if you keep $500 to $1,500 in the account, or if you set up direct deposit. Read the fee schedule before you open the account so you know what you are committing to.
Can I open an account without a Social Security number?
Most banks require a Social Security number to verify your identity and check for banking problems. If you do not have one, ask the bank whether they accept an Individual Taxpayer Identification Number (ITIN) instead. Some banks and credit unions will work with you, but options are limited.
Which type of account is best for someone who rarely uses cash?
An online bank is usually the best choice if you pay for almost everything with a debit card or transfers. You get no monthly fees, higher interest, and no need to visit a branch. If you want the option to deposit cash occasionally, choose an online bank that partners with ATM networks or retailers in your area.