When it comes to opening a bank account, you must meet certain requirements. One of the most common questions is, “what do you need to open a bank account?” Generally, you will need to provide personal identification, proof of address, and a minimum deposit to start the account. But what about online bank accounts? Do you need a guarantor to start one?

The short answer is that it depends on the bank and the account type you are opening. For example, some online banks may require a guarantor, while others do not. However, online banks are becoming increasingly common not to require a guarantor.

Why do Some Banks Require A Guarantor?

A guarantor is the one who agrees to take responsibility for the account if the account holder is unable to make payments or meet other account obligations. Banks may require a guarantor for online accounts to ensure they can recoup any losses if the account holder defaults on their obligations. This is particularly true for online banks that are not as well-established as traditional brick-and-mortar banks, as they may have less information about the account holder’s financial history.

Why Don’t Some Banks Require A Guarantor?

Many online banks do not require a guarantor for several reasons. For one, they may have more sophisticated systems in place to assess the creditworthiness of account holders. They may also have more information about the account holder’s financial history, as they may have access to credit reporting agencies. Additionally, online banks may have more flexibility in assessing risk, allowing them to offer accounts to a broader range of customers.

What To Look For When Choosing An Online Bank?

When choosing an online bank, it is important to find one that meets your needs and is reputable. Here are some things to look for:

  • The bank should have a good reputation and be FDIC-insured.
  • The bank should offer the account features you need, such as online banking and mobile check deposit.
  • The bank should have a good customer service team.
  • The bank should have a good mobile app.

How to open an online bank account without a guarantor?

Opening an online bank account without a guarantor is possible, but it may require some additional steps. Here are a few things to keep in mind:

  • Check the bank’s requirements.
  • Gather necessary documents.
  • Consider a secured credit card. Some online banks may offer secured credit cards as an alternative to a traditional bank account.
  • Look for online banks that use alternative credit scoring.
  • Check the bank’s fees, interest rates and other terms.
  • Also, “You will likely need an initial deposit when opening a bank account,” explains SoFi advisors.

Conclusion

whether or not you need a guarantor to start an online bank account depends on the bank and the type of account you are opening. Some online banks may require a guarantor, while others do not. But, it is becoming increasingly common for online banks not to require a guarantor. When choosing an online bank, it is important to find one that meets your needs and is reputable. Look for one that has a good reputation, is FDIC-insured, offers the account features you need, has a good customer service team and has an excellent mobile app.