How to Open a Bank Account


Even if you live in a cash-only society where retailers on accept cash, it’s still more practical to have a bank account where all that money is stored. Within the United States, it’s pretty much impossible to settle down or settle in without opening a bank account. From lessons learned during the 1930’s Great Depression, the U.S. banking system is backed by the federal government which means even if a bank gets into financial trouble, up to a certain amount of money that belongs to you will be guaranteed by the government.

Whether it’s an unforeseen natural disaster, mold, or theft, keeping large amounts of cash on hand is likely not a safe or convenient way to manage money. USCIS Guide has the breakdown of the why, what, and how when it comes to personal banking.

Why You’ll Need a Bank Account

There are many benefits to opening a bank account but some reasons are necessary. We’ll list out the advantages in order of importance.

  • Paying Bills
    • For utilities such as electricity and gas, most companies will only accept payment in the form of automatic transfers through a bank or by check. These companies typically have a monopoly over different neighborhoods which means you’ll need to abide by their rules to have hot water or working lights in your home.
    • Checks can be issued by a bank or you can set up online banking which allows you to link utilities’ accounts to your bank account so the exchange of money happens completely online.
    • With so many transactions happening within one household for every utility company or payment to a car or home loan, companies can not be scalable unless they make their payment options through banks.
  • Using Checks
    • Whether you want to send a gift to a loved one or you need to pay off something securely and quickly, checks are a great way to do that. The United States has systems in place to check for faulty or fraudulent checks and all check images are stored for record-keeping by banks once they have been deposited.
    • Without a bank account, you cannot use checks because they would not be tied to any monetary value. Therefore, another way to minimize the need to have a lot of cash on hand is to use checks.
  • Access to ATMs
    • For those times when you come across a store or restaurant that takes cash only, you can easily access your cash by visiting one of your bank’s ATM’s or any ATM. It’s best to withdraw cash from your bank because there won’t be any fees. However, if you use a different bank’s ATM, it will charge you a fee for needing to communicate with your bank to get the money transferred.
    • Banks issue a debit card with your name on it for access to ATMs and for making purchases. You will also be able to create a pin number for extra security. Some places like grocery stores let you withdraw cash when you make a purchase with your debit card.
  • Identification
    • Since banks are known to go through thorough vetting processes before they accept a new member, some stores and other places of business accept bank cards as a second form of identification in addition to government provided ones like a driver’s license.
  • Access to Loans
    • Before a bank or other type of financial institution will give out loans, they need to have an accurate picture of your financial situation. A good way to do that is to have a bank account that holds some of your assets. Since there is some risk involved in lending out money, having some money saved up in an account lets a bank know that you are in good standing to pay them back for a loan.

Checking Accounts vs. Savings Accounts

Checking accounts are for your day to day use and is linked to checks that a bank issues. On the other hand, savings accounts are for you to keep your extra income to save up. Typically, savings accounts let the account holder earn a small amount of interest which adds up the longer you keep the money in there. Although banks incentivise people to put money into savings accounts, there are other options to grow the value of your money. Savings accounts are good for people who are just entering the U.S. workforce who don’t have a lot of money to invest in other areas.

How to Open a Bank Account

It’s best to check with a few banks on their website, help line, or at a branch to see what documentation you’ll need to open an account. However, these are generally things you’ll need to bring with you in order to confirm your identity and start an account at a bank:

  • Government issued ID (driver’s license, birth certificate, passport)
  • Minimum deposit amount in a cash or check (if from another bank)
  • Proof of residence (like a utility bill)
  • Social security number

Fees to Look Out For

  • Minimum balance
    • Many banks want you to keep a minimum amount of money in your accounts so make sure to ask your bank representative for this type of fee.
  • Overdrafting
    • If you accidentally overspend the amount that is in your account, most banks will charge a fee. Check your account balance periodically to make sure you have enough to spend so you don’t run into paying unnecessary fees!
  • Minimum deposits
    • Some banks don’t want accounts to sit stagnant with no activity so they will require a minimum number of deposits and sometimes even a minimum amount. Most of the time, if you can keep an account balance past a certain amount, you can upgrade so a more premium tier which won’t require this. Make sure to ask the bank agent for details around this for your account type.