How to open an account at Internet bank
Generally, setting up an online account is safe and easy. Sometimes the processing is rather quick as well. In fact, a number of financial institutions provide the ability to register a new banking account online within five minutes or even less and every year it is getting faster.
In case you're thinking on setting up an online account, below is the information regarding what you should expect, need, beware of and why it is worth considering to have one of such accounts.
The ways to set up a bank account online
Nowadays opening an account online is easier than have ever been before due to advances in technologies.
Once you have selected a bank it is time to start the process of online application by visiting the bank's website or using its mobile application. Usually it is clear where to start. Most banks have a button with the options "open a new account" or "apply now". While things vary from institution to institution there are several steps you need to follow for an account opening.
Firstly, it is necessary to choose an account type. The available options vary but current, savings, money market accounts are pretty standard. If you are a college student, you can also select special current accounts designed for this consumer group.
After that it is necessary to provide personal data including a customer's full name, birth date, tax identification or social security number as well as address. Sometimes it is necessary to provide documents such as a valid driver's license and a bill containing your name and address. There are banks that allow to send documents and personal information via their own secure online networks. Sometimes you need to email copies of the documents in order to verify your identity.
Finally, an initial deposit must be made.
For example, an initial deposit can be made by linking an existing bank account with taking a photo of the cheque, or even by PayPal usage. Provided you are applying online to open an account with a regular bank then you may also visit the office to deposit cash. Please note that it might take several days for funds to be processed but after that you will gain access to the funds and will be able to manage your account.
If you have any questions regarding the process, online banking customer service agents are accessible by phone or online chat.
What is needed
A set of documents as well as information are required by banks in order to verify your identity and fund an account. Here's what is needed:
- Tax identification number, social security number or other proof of identity
- Valid US or foreign driver's license or ID with photo of an applicant
- Routing and an existing account number or another bank's debit card details where an initial deposit needs to be made
Obstacles you may face when opening an account
Although opening an account online has become easier over the years the process still faces some challenges.
For some clients the most obvious obstacle is the lack of personal customer service. Despite the fact that online banks can fill this gap with the availability of 24/7 customer support with chatbots or by phone but this can still be a disadvantage for those who want to visit a branch and speak to specialists face-to-face.
Applicants sometimes have to overcome more objective difficulties such as identity verification problems. For example, banks might try to verify your identity by asking "What street were you living on when you obtained a car lending?" The problem is that you might not remember. Failure to answer such a question may result in the bank reviewing your application manually which will slow the registration process.
Life changes can also be troubling. If you apply for an account shortly after moving, for example, and cannot provide proof of residence then the bank may hesitate to provide you with an account. Or you may be allowed to open it but with restrictions like the presence of a minimum balance for a certain time period.
The reasons to open an account at Internet bank
Online banking popularity is growing and it is really convenient for households to use only online accounts. Here are some reasons why it is worth opening an online account:
- Convenience: a simplified registration process is able to make opening an online account very convenient thanks to advances in technologies. You can not only skip visiting the branch but also do banking operations from anywhere so you there is no need to change the bank when moving.
- Higher percentage rates: online banks generally provide higher rates. Since they do not have the overhead costs associated with conventional institutions they usually pass these savings onto their clients.
- Lower charges: the top online banks collect low or no charges at all. This means you might avoid things like monthly service commissions or minimum balance charges.
- Security: banks provide current, savings, money market accounts, certificates of deposit insured for the sum up to $250,000 by the Federal Deposit Insurance Corporation (shortly FDIC).
Before registering an online banking account you should make a comparison of various options. Thus, you will be able to find a current or savings account with a competitive rate. You should also clarify that the bank offers other necessary features like an own mobile app, automatic savings or a big network of ATMs.
What can be done to make the process smoother
While banks continue to improve the way they serve the clients online there are a few things you can do to make setting up your account as easy as possible.
Before you start registering an account through the app or online it is worth visiting the bank's website to see what information you need to provide. You need to also check the website URL to make sure you are registering with a real bank and not a fraudster. If the bank requests additional documents, please communicate only through secure channels.
Before taking any of these steps it is better to take a closer look at the offerings of banks to check savings accounts that provide competitive rates but also accounts that may be linked with a mobile app that is highly rated.
The current top online banks
With online banking clients can omit visiting its branches. But these banks have other perks as well. For example, you can earn a higher rate in your current or savings account due to the fact that online banks have less overhead than those with physical branches. In addition, low or no charges are collected by the top online banks, they also support intuitive mobile apps. If you feel comfortable with the lack of branches then you can switch your existing current or savings account to a new online banking provider to get these benefits.
Radius Bank
Despite the brand's name is not common, Radius Bank took first place among online banking institutions due to the combination of its generous discounts on ATM commissions, mobile banking app, payments on current and savings accounts and availability of a minimum amount for an account opening.
Bank5 Connect
The savings account is paid at an attractive rate (currently offering depositors 1.85% per annum). You only need $10 to open an account. However, it is necessary to deposit the minimum sum of $100 to receive interest.
The current account of Bank5 Connect stands out for its advantages as it pays 0.76% per annum for customers who have $100 in their account. You can also receive rewards for paying with a debit card at specified restaurants and stores. Bank5 Connect will refund ATM commissions charged outside the bank's ATM network, up to $15 per statement.
Ally Bank
This bank is often included in the list of the best banks, and rightly so. It provides all necessary services such as a checking account with interest, a high-yielding savings account and a mobile app that differentiates from the competition, in conjunction with impeccable customer service.
CIBC Bank USA
It is highly ranked for paying very competitive returns to its savings account. But it requires the deposit of no less than $1000 to open an account.
Mobile app reviews are off but the app provides such services as paying bills and depositing checks with your smartphone's camera.
Salem Five Direct
This bank impresses thanks to its high-yielding savings account which applies no monthly charges. At present clients can earn 1.91% per annum in savings accounts. However, you need to have at least $100 for an account opening.
The current account can also help you make some extra money as it pays 0.25% per annum to your balance. You can also get cashback on purchases made with a debit card and will not be charged a monthly fee for usage of the account. The bank doesn't charge for ATM transactions and refunds up to a definite amount of charges collected by other banks.
HSBC Direct
High percentage rate is the biggest attraction of online banking. At HSBC Direct Savings the bank pays depositors an impressive 2.05% per annum, making it one of the highest per annum rates currently available. What's more, you can earn APY regardless to the amount you have deposited to your account. You just have to deposit $1 to open an account and it applies no monthly maintenance commission.
Discover Bank
A splash was made by this bank as it has lowered all deposit fees. In addition, contributors can also obtain a competitive rate. Currently you will be earning 1.70% per annum on your savings account balance. It is available to everyone and there is no minimum account requirements.
Discover has also the checking account on offer that allows customers to receive cashback on their purchasing with a debit card. Charge-free ATMs are available and clients can use 60,000 of them nationwid.
E-Trade Bank
It is widely known due to its brokerage services but it provides banking services as well.
Other banks probably have higher rates but the this option offers competitive returns. Nowadays, the savings account is bringing 1.75% per annum on any balance.
However, you will need to deposit $100 to open an ecommerce checking account and this brings no interest.
E-Trade current and savings accounts are combined with the popular mobile app. If you also use E-Trade for your investments the app works with both. Once logged into the bank account the information about the investment account is presented in the same view mode.
Quontic Bank
This bank offers competitive returns. The Internet bank which is headquartered in New York currently offers depositors 1.85% per annum. However, you need at least $500 to open an account.
Clients receive interest from their checking accounts but it is tiered and depends on the balance and the number of transactions made on their debit cards. Either way, you will have access to thousands of free ATM machines across the country. For setting up an account you will have to deposit of at least $500.
TIAA Bank
TIAA Bank suits the consumers searching online banking providing a full range of services and competitive rates as well.
Its checking account is also available and you only need $25 to open it. You should also expect to pay a $5 monthly charge unless you live in New York and also maintain a $25 daily balance.
