Skip to Content

Opening a Bank Account: What You Need to Know

Why Open a bank account?

Choosing a financial institution:

Shop around to find a bank that fits your needs. Call or visit at least three different banks before making a decision. Factors to take into consideration include:

Types of Banks:

Choosing an Account:

There are different accounts from which to choose depending on your needs and your financial limitations.

Decide what kind of account or combination of accounts is right for you:

Protect your bank account:

Frequently Asked Questions:

The bank stopped sending me my original cancelled checks. Can they do that?
Yes. Check 21 is a new Federal law that changes the way banks process paper checks, substantially speeding a check's clearance through the system. Banks can now process and deliver checks electronically and send you electronic reproductions of checks instead of sending you the original paper checks. This electronic reproduction is called a 'substitute check'. The substitute check is considered the legal equivalent of the original check and should contain an image of the front and back of the original check, your account number and bank routing number (also known as MICR) and the statement "This is a legal copy of your check. You can use it the same way you would use the original check". Only a substitute check issued by the bank is legally equivalent to the original check to prove payment; photocopies or other images are not considered valid. All checks, including personal checks, business checks, payroll checks and cashier's checks, are subject to Check 21.

I deposited a check but the bank has not credited my account. How long does it take for a check to clear?
Availability of funds generally depends on three things: where the check is drawn (e.g., local or out-of-town institution), the amount of the deposit and the issuer of the check. A check can take from one to five days for all of the funds that it represents to become available. For deposits of $10,000 or more the funds and they are made available in increments. Even with the passage of Check 21, banks are not obligated to make funds available any sooner than in the past.

What is the difference between overdraft protection and bounce protection?
An overdraft occurs when the balance of your checking account is negative, resulting from writing a check or making a withdrawal for an amount totaling more than the amount in your account.

I wrote one large check and two smaller checks. I only had enough money in my account to cover the two smaller checks, but the bank bounced them all, resulting in over $100 worth of fees. Can they do that?
In New York, banks are required to inform consumers before they open a checking account, the order in which checks will be cleared, whether it is by the dollar amount of the check (largest first or smallest first) or any other manner. Be very careful about having the funds to cover the checks that you write. Be aware that if you have bounce protection on your account and your bank clears checks in this manner you will be subject to fees for two checks.

I deposited a check in my account. The teller gave me back a stamped copy of a deposit slip, and then the bank lost my check and would not credit my account until I contacted the writer of the check. Why?
The funds represented by the check are not credited to your account until your bank is paid by the check writer's bank. Any credit you receive until the check clears is temporary. If your bank loses the check after the deposit, you are responsible for contacting the writer of the check to see if the check was cashed or to have them put a stop payment order on the check.

What's the difference between a credit card and a debit card?
Making a purchase with a credit card is like taking out a loan that you must pay back later. You may charge up to the limit posed by the issuer and interest can be accrued. A debit card is an ATM card that allows you to make purchases. Debit cards look just like traditional ATM cards, but they are often confused with credit cards. Think of it as cash or immediate access to a checking account. The money is quickly deducted from your account. Debit cards do not carry the same consumer protection as credit cards. Federal law permits a maximum liability of $50 if the lost or stolen credit card is reported within two days of discovery. The liability increases to $500 after if reported within 60 days. After 60 days there is no limit on liability. Keep in mind that many banks do not allow you to stop payment on a debit card transaction.

My bank statement showed a debit that I didn't make - what can I do about it?
Call your bank immediately - report problems within 60 days of the date of the statement. Contact a customer service representative or a bank manager for assistance. They will take down the details of your complaint and initiate an investigation. The bank must let you know the outcome of the investigation.

Can I bank online?
If you have a computer with Internet access, you should be able to bank online. Connect to your bank's Website and sign up for an account, a user name and a password. Before you deposit money in any bank, use the FDIC institutions search engine ( to determine whether the bank is an FDIC-insured depository institution.

What is the difference between Internet banks and regular banks?
The key difference is that Internet banks exist only on the Internet - with no physical branches. Most online banks are actually the online counterparts of brick-and-mortar parents, from small regional banks with few branches to large national or multinational corporations.

What is online bill payment?
Online bill payment is a service offered by banks that allows you to pay your bills by entering the names of companies to which you owe money, your account number and the amount you'd like to pay. You can program the service to either pay certain bills automatically every month or enter specific amounts each time the bills are due. There is usually a fee for the service, but some banks waive the fee when you meet minimum balance requirements. The money earmarked for bill payments is deducted from your checking account on the day you specify the bill to be paid.

What is direct deposit?
Direct deposit is a service that employers, payroll companies, brokerages and government benefit programs use that will deposit money due to you directly into your bank account using electronic transfer of funds. Direct deposit is a safer, faster and less expensive alternative to issuing paper checks. When you have direct deposit, many banks may waive or lower monthly checking account fees.

How long is a personal check valid?
Six months. A bank is not obligated to honor the check after the validity date has expired.

What is the maximum amount in my account that is insured?
Up to $250,000 per depositor is insured. Multiple accounts at a single bank are added together for insurance purposes. For more information visit the Federal Deposit Insurance Corporation at

The bank I went to would not cash my payroll check. Can they do that?
If you do not have an account at a bank, it has the right not to cash your check. However, your employer can make arrangements with a bank to cash payroll checks.

How do I reconcile my checking account?

This final number should match the ending balance in your checkbook. If the numbers do not match, repeat the steps above to find any missed transactions or miscalculations.

Updated 07/10/2017

Department of Financial Services


DFS Facebook page

Follow NYDFS on Twitter


Sign up online or download and mail in your application.