In this article:
A checking account is the foundation of a healthy financial life. If your finances are a tool bag, the checking account is a screwdriver—functional, versatile and constantly in use. Almost anyone who has built a stable financial profile started by depositing their money into a checking account.
The good news: Getting a checking account is easier than you think. We'll walk you through the process, and explain why opening a checking account is a necessary step in building a successful financial future.
What You Will Need to Open a Checking Account
Before you open your account, make sure you have the necessary documents and information on hand. Here are the main items you'll need:
- Proof of identification. To open your own checking account, you need to be over 18 and have a current government-issued photo ID such as a driver's license, passport, state ID or military ID. If you're opening a joint account, the other person will also need to provide a form of ID. Prospective customers also need to be legal U.S. residents, providing their Social Security number or Taxpayer Identification Number as proof.
- Proof of your current address. This could be a lease, mortgage statement or utility bill.
- Cash for the initial deposit. Banks and credit unions usually require an initial deposit to open a checking account; the minimum amount required varies by bank.
Though banks and credit unions don't check your credit score when opening an account, they will sometimes run your ChexSystems report. A ChexSystems report is a like a credit report for banks, displaying previous banking problems such as negative balances, frequent overdraft fees, bounced checks and fraud. It's rare to be denied a checking account, but most rejections happen because of poor marks on your ChexSystems report.
Before opening a checking account, research which bank and what type of account is best for you. Some banks charge monthly maintenance fees if you don't reach their minimum balance or have regular direct deposits, often up to $15. Others have a small ATM network and charge fees when you use an out-of-network ATM. Some checking accounts offer interest, while others don't.
If you need to go to a branch to make deposits on a regular basis, choose a bank with locations near you or that allow free cash deposits at ATMs. Some people prefer a large national bank, especially if they move frequently, travel a lot or hope to use their bank for a variety of financial products. Others want a local credit union because of their low fees and personalized customer service.
Ask your employer if they have ties to any bank or credit union. If you work for the government, you may be eligible for a special credit union that has lower fees and higher interest rates.
How to Open a Checking Account
You can open a checking account by filling out an application online or in person, usually in just a few minutes, as long as you have the necessary items noted above. The bank will then issue you a debit card, typically arriving in the mail seven to 10 business days later. A debit card allows you to pay for items using the funds from your account.
If you order checkbooks, those will also come after the account opens. If you need checks before they arrive in the mail, you can typically get temporary checks from your bank. Checkbooks are often free the first time but may carry an extra fee when you order more.
Once the account is created, you can set up recurring direct deposits from your employer to your checking account. Many banks also allow you to deposit checks via their mobile app, though you can also go to an ATM or branch location.
Benefits of Having a Checking Account
Checking accounts are the first step in financial independence for many people. Students often open their first checking account in high school or college, while others open checking accounts as a way to pay for expenses without relying on carrying cash. Here are some benefits of having a checking account:
- They offer several ways to help you pay for goods and services, through the use of checks, debit cards and electronic payments.
- They allow you to have your paycheck deposited directly into your account.
- They are insured up to a certain amount, keeping your money safe.
- They allow you to pay your bills online, making bill paying more convenient.
When you keep money in a checking account, you can pay your bills or send money to a friend without using cash. Debit cards and checks provide easy payment methods, while online systems such as Zelle, PayPal, and Venmo put payments and transfers just a click away on your phone or computer.
Checking accounts are usually FDIC-insured, making them a safe place to keep your money. The FDIC (Federal Deposit Insurance Corporation) is a federal insurance agency that guarantees funds held in most banks and credit unions, up to $250,000 per account.
Does Closing a Checking Account Affect Your Credit Score?
People close checking accounts for a variety of reasons. They may find a better deal at another bank, or they may be moving to an area where their current bank doesn't exist.
A closed checking account won't appear on your credit report because a checking account isn't a form of credit. The details of your checking account, like how much money you have or how often you make deposits and withdrawals, also don't appear on your credit report and can't be seen by a creditor unless you grant them access.
If you close a checking account with a negative balance, you might incur a red mark on your ChexSystems report. This could damage your ability to open another checking account in the future.
Before closing a checking account, verify that you don't have any recurring bills connected to the account or any checks that have yet to be deposited. A service provider will probably charge a hefty fee for a returned check.
Beyond Checking Accounts
Once you've built a comfortable relationship with your bank through using your checking account, you can look into other products the bank offers, such as savings and money market accounts or certificates of deposit (CDs). These offer higher interest rates than checking accounts (some of which don't offer interest at all) and are better for long-term savings rather than everyday use. If you have a large balance in your checking account, consider opening one of these accounts, either through your bank or another financial provider, to get more bang for your buck.
As you continue to build a strong financial foundation, consider obtaining a copy of your free credit report to see where your credit stands and to help you better understand how to improve your financial future.
Want to instantly increase your credit score? Experian Boost™ helps by giving you credit for the utility and mobile phone bills you're already paying. Until now, those payments did not positively impact your score.
This service is completely free and can boost your credit scores fast by using your own positive payment history. It can also help those with poor or limited credit situations. Other services such as credit repair may cost you up to thousands and only help remove inaccuracies from your credit report.