When it comes to opening a checking account online, the process is straightforward and convenient for most individuals. However, before diving in, it’s essential to consider a few key factors. Are you leaning towards opening a standard checking account through a traditional brick-and-mortar bank or credit union’s online platform, or are you more inclined towards an electronic checking account at an online-only bank? While the application process may seem similar, the account features can vary significantly between the two options.
Regulation and FDIC Insurance
Both types of checking accounts, whether through traditional or online-only banks, are subject to the same regulatory oversight. Entities like the Office of the Comptroller of the Currency (OCC), Federal Deposit Insurance Corporation (FDIC), Federal Reserve System (FRS), National Credit Union Administration, and state regulators oversee these accounts. Furthermore, both traditional and online-only bank accounts are FDIC insured, but it’s advisable to verify the bank’s FDIC status independently.
Features by Bank and Account Type
Checking accounts at traditional and online-only banks serve as deposit accounts that allow fund withdrawals for various purposes. Common features include direct deposit, debit cards, online bill pay, electronic funds transfer (EFT), mobile banking, and overdraft protection.
When selecting a bank to open your checking account, it’s crucial to match your preferred features with the available options. Different banks offer varying features, so thorough research is recommended to make an informed decision.
Gather Up Information
Once you’ve identified a bank, visit its website to compile the necessary information and documentation you’ll need for the application process.
This typically includes details such as your full name, date of birth, citizenship status, current and previous addresses, phone number, email address, Social Security number, and a government-issued ID like a driver’s license or passport.
Moreover, be prepared to provide information on how you will fund your account, whether through routing and account numbers, a credit/debit card, or a check from your existing bank. For joint accounts, the same information is required for all account holders.
Complete the Application
Fill out the online application using the gathered information. Following submission, you may receive confirmation via email or text with instructions on the next steps. This could include signing a physical or electronic signature card, depending on the bank’s requirements.
If a signature card is needed, you’ll typically receive it by mail for physical signatures, while online banks often accept electronic signatures for quicker processing.
Verification Process
During the application process, the bank verifies your credit history and generates a consumer banking report, which may involve agencies like ChexSystems or Early Warning Services. Be mindful that certain account-related information can impact this report as per the Fair Credit Reporting Act (FCRA).
How to Handle a Denied Application
In the event of an application denial based on the consumer banking report, the bank must disclose the reporting entity and how to request a copy of the report. You have the right to challenge inaccuracies, either by petitioning the bank for reconsideration or disputing the report with the respective agency.
Alternatively, explore “second chance” accounts if offered by banks, though these usually come with additional fees and restrictions but provide an avenue to rebuild your financial standing.
Fund Your Account
Upon approval, the next step involves depositing funds into your new account, typically requiring a minimum deposit. You can fund the account through various methods like check, wire transfer, debit card, or electronic transfer from another account. Keep in mind that cash deposits are usually not accepted during the online application process.
Debit Card/Checks Arrive
If your chosen account includes a debit/ATM card or checks, expect these to arrive by mail post-approval. Activation instructions for the debit card and checks will be provided, usually arriving separately for security reasons.
Start Using Your Account
Depending on whether your account is with a traditional or online-only bank, adjust to the available banking methods. Online-only banks may limit operations to online platforms, while traditional banks offer both online and in-branch services.
Transition your financial activities like direct deposits and bill payments to your new account and familiarize yourself with the bank’s customer service options for any arising issues.