Open a Bank Account

Why Open a Bank Account?

A bank account can make it easier to store, receive, spend, and manage your money. While not everyone uses a bank account, having one can give you more options and may help you avoid certain fees and inconveniences.

• Keep Your Money Safe: Storing cash in your home puts your money at risk in the case of unexpected events like fire, flood, theft, or loss. Most banks are insured by the Federal Deposit Insurance Corporation (FDIC), while most credit unions are insured by the National Credit Union Administration (NCUA). These programs generally protect deposits up to $250,000 per depositor, per insured institution, for eligible account types.
  
  
• Get Paid and Manage Everyday Payments: A bank account can make it easier to receive, spend, and manage your money. With direct deposit, your paycheck can go directly into your account. Having an account can also help you avoid check-cashing fees. Many companies, utility providers, and government agencies let you pay bills directly from your checking account, which may cost less than paying by credit card. You can also link your account to payment apps like PayPal to send and receive money.

• Access Additional Features: Depending on the account, you may also have access to features such as budgeting tools, account alerts, fraud monitoring, credit score monitoring, or interest earned on your money

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Banks vs. Credit Unions: What's the Difference?

You can open an account at either a bank or a credit union. Both typically offer checking and savings accounts, loans, and online banking. Services, fees, and eligibility criteria vary from one financial institution to another, even among banks and credit unions. 

Banks include both traditional banks with physical branches and online banks that provide customer support via phone or chat. Online banks may offer accounts with lower fees or higher interest rates, but you won't have the option to visit a branch for in-person help, and depositing cash may be more difficult or limited to certain locations.

Credit unions are member-owned and may offer lower fees or loan rates. Some require you to meet certain membership criteria based on where you live, work, attend school, or an affiliation with a union, church, school or other group. Some credit unions also focus specifically on making financial services more accessible to communities that have historically faced barriers to banking. For example, Juntos Avanzamos ("Together We Advance") is a designation for credit unions committed to serving Hispanic/Latinx/Latine and immigrant communities. Participating credit unions offer features such as:

• Bilingual services
• Financial products designed with the needs of immigrant communities in mind
• Acceptance of alternative forms of identification, such as foreign passports, matrícula consular cards, and other forms of government-issued IDs.

Several California credit unions have received the Juntos Avanzamos designation. You can view the list here. 

Here's a general comparison:

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Checking vs. Savings Account

Most banking institutions offer several types of accounts. The two most common are checking accounts and savings accounts, which serve different purposes. Many people choose to have both: a checking account for everyday spending and paying bills, and a savings account for setting money aside for future goals or unexpected expenses. Let's compare them:

Having a checking account is a great way to learn how to manage your money and take control of your finances. By finding a savings account with no fees and a high interest rate, you can save money more easily and watch your savings grow over time.

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Ready to Get Started?

Step 1: Compare Your Options

Look for federally insured banks and credit unions and compare accounts based on what matters to you, such as fees, minimum deposits, branch or ATM access, online banking, cash deposits, and identification requirements.

If you're not sure where to start, consider looking for a bank or credit union that is Bank On certified. Bank On is a national initiative that works with banks and credit unions to offer checking accounts that meet national standards for affordability and accessibility. Certified Bank On accounts typically include:

• Low or no monthly fees
• No overdraft or nonsufficient funds (NSF) fees
• Low minimum opening deposits (typically $25 or less)
• A debit card
• Online bill pay and mobile banking (at participating institutions)

You can search for participating financial institutions using the Bank On Account locator.

Step 2: Gather Your Documents

Requirements vary depending on the financial institution and account type, but commonly include:

• Government-issued photo ID
• Social Security Number or ITIN
• Name
• Date of birth
• Address
• Initial deposit (sometimes)

Depending on the bank or credit union, you may be able to open an account in person at a branch, online through their website or mobile app, or by starting an application online and completing it in person if additional information is needed.