What happens when you open a savings account online

You visit a bank or credit union's website, enter your personal information, verify your identity, and fund the account—all without visiting a branch. Most online accounts are active within one business day. The bank checks your Social Security number against ChexSystems (a banking history database) and may run a soft credit check that does not affect your credit score. You will need a government ID, your Social Security number, and a way to fund the account—either a debit card, another bank account, or a wire transfer.

Online-only banks and credit unions typically offer higher interest rates than brick-and-mortar branches because they have lower overhead costs. You can deposit checks by photographing them through the app, and you can withdraw cash at ATMs in the bank's network or at partner locations. Some online banks charge no monthly fees; others waive fees if you keep a minimum balance or set up direct deposit.

Key Takeaways

  • You will need a valid government ID, your Social Security number, and proof of address to open an account online.
  • The entire process takes 15 to 30 minutes, and most accounts are ready to use within one business day.
  • Online banks often pay higher interest rates than traditional banks because they have fewer physical locations.
  • You can deposit checks by taking a photo through the mobile app, and withdraw cash at ATMs in the bank's network.
  • The bank will check your history in ChexSystems; a negative record there may slow approval or result in denial.

Documents and information you need before you start

Gather these items before you open the browser: a valid government-issued photo ID (driver's license, passport, or state ID card), your Social Security number, and proof of your current address. Proof of address can be a recent utility bill, lease agreement, mortgage statement, or government mail dated within the last 60 days. Some banks will accept a bank statement from another institution.

Have your phone nearby. Many banks text you a one-time code to verify your identity during signup. If you are opening the account on a computer, you may need to use your phone to complete identity verification—some banks ask you to photograph your ID or take a selfie to confirm you are the person on the document.

If you plan to fund the account immediately, have a debit card or the routing and account number of another bank account ready. You do not have to fund it right away; you can open the account and transfer money later.

Step-by-step: the online signup process

Start on the bank's website or download the mobile app. Click the button labeled "Open an Account," "get your free guide," or "Sign Up"—the exact wording varies by bank. You will be asked whether you want a savings account, checking account, or both. Select savings account.

Enter your full name, date of birth, email address, phone number, and Social Security number. The bank will ask for your current address and mailing address (these can be the same). You will create a username and password for online banking. Write these down or save them in a password manager—you will need them to log in later.

The bank will then ask you to verify your identity. This step varies: some banks ask you to photograph your ID and take a selfie; others ask security questions based on your credit history (like "Which of these addresses did you live at in 2019?"); still others use a third-party verification service that checks public records. This step usually takes 5 to 10 minutes.

Once identity verification is complete, you will see a summary of the account terms: the interest rate (called the Annual Percentage Yield or APY), any monthly fees, and the minimum balance required. Read this carefully. Then you will be asked to fund the account or skip this step. If you fund it now, enter your debit card number or the routing and account number of another bank account. The bank will debit a small amount (usually $0.01 to $1.00) from that account to confirm it is real; you will see that amount refunded within one to three business days.

How long approval takes and when you can use the account

Most online savings accounts are approved instantly or within a few minutes. You will receive a confirmation email with your account number and login details. You can log in and view your account balance immediately, even if money has not arrived yet.

If you funded the account with a debit card, that money usually appears within one to three business days. If you transferred money from another bank account, it typically takes one to three business days for the transfer to complete. If you did not fund the account during signup, you can transfer money in later through the app or website.

Some banks hold new accounts for a brief period before allowing withdrawals. This is rare, but if your bank does this, you will see a note in your account settings. Most banks let you withdraw money immediately after it arrives in your account.

If your application is denied or delayed, the bank will send you a letter explaining why. Common reasons include a negative ChexSystems record (unpaid overdrafts or fraud at another bank), a mismatch between the name on your ID and the name you entered, or an address that does not match public records. If this happens, contact the bank's customer service line to ask what went wrong and whether you can reapply.

Comparing online banks: interest rates, fees, and features

Interest rates on savings accounts vary widely and change frequently. As of early 2024, online banks typically offer APY rates between 4% and 5.35% on savings accounts, while traditional brick-and-mortar banks often offer 0.01% to 0.5%. The difference matters: on a $10,000 balance, a 4.5% APY earns you $450 per year, while a 0.1% APY earns you $10. Check the current rate on the bank's website before you open the account, because rates can change after you open it.

Monthly fees vary. Many online banks charge no monthly maintenance fee. Others charge $5 to $15 per month but waive the fee if you maintain a minimum balance (often $500 to $2,500) or set up direct deposit. A few banks charge a fee no matter what. Read the fee schedule before you open the account.

ATM access varies by bank. Some online banks own their own ATM networks; others partner with networks like Allpoint or MoneyPass, which have thousands of ATMs nationwide. A few banks reimburse out-of-network ATM fees. If you withdraw cash frequently, check how many ATMs are near your home and work.

Mobile check deposit is standard at all online banks: you photograph the front and back of a check through the app, and the bank deposits it. Funds usually appear within one to three business days. Some banks limit the number of checks you can deposit per day or per month; check the terms.

What to do if something goes wrong during signup

If your application is denied, the bank will explain why in a letter sent to your address on file. If the reason is a ChexSystems record, you can request a copy of your ChexSystems report for free at www.chexsystems.com. You have the right to dispute any inaccurate information on that report. If the report contains an error, you can file a dispute, and ChexSystems will investigate.

If you cannot complete identity verification because your ID does not scan clearly or your address does not match public records, call the bank's customer service line. Many banks can verify you manually over the phone. Have your ID and proof of address ready.

If you funded the account but the money never arrived, log into your account and check the transfer status. Most banks show pending transfers in the app. If the transfer shows as complete but the money is not there, contact the bank's customer service line. If you used a debit card and the money was debited from your card but did not arrive at the bank, the bank can investigate and usually refund the money within five to ten business days.

If you cannot log in after opening the account, use the "Forgot Password" link on the login page to reset your password. If that does not work, call customer service. Have your account number and ID ready.

Moving money into your new savings account

You can fund your account in several ways: debit card, bank transfer, wire transfer, or mobile check deposit. Debit card and bank transfer are the fastest and easiest. Wire transfers are faster but cost money (usually $15 to $30) and are best used for large amounts.

To transfer money from another bank account, log into your new savings account and look for a link labeled "Transfer," "Move Money," or "Add Funds." You will enter the routing number and account number of the other bank. The bank will debit a small amount to verify the account is real; once verified, you can transfer larger amounts. Transfers usually take one to three business days.

To deposit a check, open the mobile app, find the "Mobile Deposit" or "Deposit Check" option, and photograph the front and back of the check. The app will tell you the deposit amount and when the funds will appear. Most checks clear within one to three business days.

Frequently Asked Questions

Can I open a savings account online if I do not have a Social Security number?

Most banks require a Social Security number or Individual Taxpayer Identification Number (ITIN). Some online banks accept ITINs; others do not. Call the bank before you start the application to confirm. If you have neither, a few credit unions and community banks may open accounts for you, but you will likely need to visit in person.

What if I do not have a government ID?

A government-issued photo ID is required by federal law. If you do not have a driver's license or passport, you can obtain a state ID card from your state's DMV. Some banks may accept a passport card or tribal ID. Call the bank to ask what forms of ID they accept before you apply.

How much money do I need to open an account?

Most online banks have no minimum opening deposit. You can open the account with $0 and transfer money in later. Some banks offer higher interest rates if you maintain a minimum balance (often $500 to $2,500), but you do not need that balance to open the account.

Can I open an account if I have been denied before?

Yes. If you were denied because of a ChexSystems record, you can request a free copy of your report, dispute any errors, and reapply to a different bank. Some banks specialize in second-chance accounts and accept applicants with negative ChexSystems records. If you were denied because of an address mismatch, update your address with the DMV and try again.

Is my money safe in an online bank?

Yes, as long as the bank is FDIC-insured. Check the bank's website for the FDIC insurance logo, or search the bank's name on www.fdic.gov. FDIC insurance protects up to $250,000 per account holder per bank. If the bank fails, the FDIC will return your money.