Why Would Someone Not Be Able to Open a Bank Account?


Banks across the U.S. offer a wide range of account types, but not everyone qualifies to open an account. Legally, banks must verify the identity of people attempting to open any type of account. A number of factors can cause a bank to refuse to open an account. Some restrictions relate to state and federal laws, while other rules are bank-specific.


Federal law requires banks to record the legal name, date of birth and physical address of anyone attempting to open a bank account. Prospective account holders must identify themselves with an acceptable form of identification, such as a passport or driver's license. For tax purposes, banks must also record the Social Security number or taxpayer identification number of all new customers. Foreign nationals without TIN's can open accounts but must sign a W8 form. In addition, banks cross-reference customer information with lists of known terrorists. People failing to produce the required information, as well as people on terrorist watch lists, cannot open accounts.

Bad Credit

When customers write checks they do not have the funds to cover, they overdraw their accounts. Often these accounts are abandoned, and the bank has to cover the loss. To help limit bad accounts, banks either check the credit scores of people opening new accounts or obtain reports from ChexSystems, a vendor that tracks charged-off bank accounts. People who owe money to other banks are often ineligible to open new accounts until they settle the debt. Likewise, people with low credit scores are perceived as high-risk customers and are unable to open accounts.

Age Restrictions

Generally, people over 18 are regarded as legal adults who can enter into legal contracts. People opening bank accounts must sign an account signature card that doubles as an account contract. Consequently, people under 18 cannot open bank accounts. State laws vary, and in some instances people under 18 can open accounts if state laws specifically permit them to. Adults can open bank accounts on behalf of minors, but the children will have no access to the funds.

Account Requirements

In addition to legal requirements, many banks impose restrictions on new accounts. New account holders receive temporary checks at the account opening and can therefore start writing checks as soon as they leave the bank. To reduce the risk of account holders immediately writing bad checks, banks require people to make minimum deposits when they open accounts. Deposit minimums vary but typically start at between $25 and $100. Banks often require larger minimum deposits to open certificates of deposit and money market accounts, and people lacking sufficient funds cannot open these accounts.

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