Opening a U.S. bank account as a newcomer

Step 1 — Know the two basic accounts

A checking account is for everyday money. You pay with a debit card, checks, or online and mobile banking. At a credit union, it may be called a “share draft account” (NCUA — Checking Accounts).

A savings account is a safe place for money you want to keep, like an emergency fund, and it usually earns some interest. A certificate of deposit (CD) also earns interest, but your money must stay in it for a set time (NCUA — Savings Accounts). You can open one or both.

Step 2 — Choose a bank or a credit union

Both offer accounts, cards and loans. A credit union is a not-for-profit institution owned by its members. You may be able to join through your employer, your family, a group you belong to, or the area where you live, work, worship or go to school. The NCUA says that, on average, credit unions pay more on savings, charge less on loans and tend to have lower fees (NCUA — What is a credit union?).

Still, prices and features “can vary greatly between providers,” so the CFPB suggests you shop around and ask questions (CFPB — Selecting a lower-risk account). Good questions to ask (CFPB — Checklist; FDIC — Get Banked):

• Is there a monthly fee, and can you avoid it with a minimum balance or direct deposit?
• What do ATMs cost, including other banks’ ATMs?
• Are there overdraft fees, and can you opt out?

Low-cost accounts exist. Many banks have accounts with low or no minimum balance, and certified “Bank On” accounts have low, clear costs and no overdraft or insufficient-funds fees (FDIC — Get Banked). Accounts that won’t let you spend more than you have may not be advertised, so ask (CFPB — Selecting a lower-risk account).

An app is not always a bank. Nonbank companies, including many financial apps, “are never FDIC-insured,” and FDIC insurance doesn’t protect you if the app company itself goes bankrupt. Ask which bank holds your money, then check that bank (FDIC — Banking With Third-Party Apps).

Step 3 — Make sure your money is insured

At a bank: FDIC insurance protects your deposits if an insured bank fails. It covers $250,000 per depositor, per insured bank, for each ownership category (such as single or joint accounts). It covers checking, savings, money market deposit accounts and CDs, but not stocks, bonds, mutual funds or crypto assets, even when a bank sells them. Look up the bank in the FDIC’s BankFind tool (FDIC — Understanding Deposit Insurance).

At a credit union: the NCUA insures all federal credit unions and the vast majority of state-chartered ones, up to at least $250,000 per member (NCUA — How Does Share Insurance Work?). Some state-chartered credit unions use private insurers instead, which the U.S. government doesn’t back. Federally insured credit unions must show the official NCUA sign at teller stations and on the web pages where you open accounts. If you’re unsure, search the NCUA’s Credit Union Locator (NCUA — Share Insurance).

Step 4 — Gather your documents

The bank or credit union needs to verify your name, date of birth, address and an ID number. That number can be an SSN, an ITIN, a passport number and country of issue, or another government-issued number. Many banks and credit unions ask for (CFPB — Checklist):

• A photo ID. Many banks want a U.S. or state ID. Without one, some accept a foreign passport or a consular ID card, such as Mexico’s Matrícula Consular. Each bank or credit union decides which foreign IDs it accepts.
• A second document, such as your Social Security card, a bill with your name and address, or your birth certificate.
• An SSN or ITIN. Without one, you may only be able to open an account that pays no interest, because interest is taxable.

Before you go, call or check the website and ask exactly which documents they accept.

No SSN yet? See our guide on getting a Social Security number. If you can’t get one, our ITIN guide explains who can get an ITIN. For a U.S. photo ID, see driver’s licenses and state IDs.

Step 5 — Open the account and set it up safely

In most places you must be at least 18. You can apply in person, online or in an app, then make a first deposit, sign the documents and activate your debit card (FDIC — Get Banked). Read the account disclosures, especially the fees, before you use the account (NCUA — Credit Union Accounts & Services). Then:

• Decide about overdraft coverage. An overdraft happens when you don’t have enough money in your account to cover a transaction. If the bank pays it anyway, you repay the shortfall plus fees (CFPB — Know your overdraft options). You may be asked whether you want coverage for ATM and one-time debit card transactions; in the NCUA’s example, one overdraft fee turns a $3 coffee into $43 (NCUA — Credit Union Accounts & Services). Without coverage, your debit card is generally declined when your balance is too low (CFPB).
• Turn on low-balance alerts, or link savings to checking: the transfer fee is usually lower than an overdraft fee (CFPB).
• Expect longer holds at first. Cash deposited in person and electronic payments generally must be available by the next business day, but a bank can hold deposits longer while your account is less than 30 days old. Ask about mobile check deposits, which may follow a different timetable (CFPB — Holds on deposits).
• Report problems fast. If your debit card is lost or stolen, tell your bank within two business days of noticing: you then lose no more than $50. Wait longer, and you could be responsible for up to $500. Report other unauthorized withdrawals right away, and no later than 60 days after the bank sends the statement that shows them (CFPB — Unauthorized transactions).

A bank account can be a first step toward other financial products (FDIC — Get Banked), such as building credit from scratch.

Step 6 — If a bank says no

Banks and credit unions may check reports from checking account reporting companies, such as Chex Systems and Early Warning Services. These reports record problems like an unpaid overdraft on an account the bank closed. If you’re denied because of a report, you have the right to a free copy; check it and dispute any errors. Then ask whether the bank has steps you can take to open an account, or a lower-risk account (CFPB — Denied a checking account).

Policies vary widely, so if one place turns you away, try another (CFPB — Checking account denials). The same goes for IDs: each bank or credit union has its own policy on foreign IDs (CFPB — Checklist).