A bank account is a safe place to store your money. In the unlikely event the bank is robbed, your money is insured and will be replaced—at least up to $250,000. If you store your money at your house or place of business, for example, it is much more likely to be stolen by known or unknown persons. Opening a bank account will also help you gain access to credit—with a credit card, personal loan, home mortgage loan, or small business loan—and will help you develop a savings plan for the future.
Similarly, credit cards are a safe and convenient way to pay for many monthly expenses—including groceries, gas for your vehicle, utilities (electricity, water), and your phone bill. Credit cards also help consumers pay for larger, more unexpected expenses such as car repairs and medical bills.
Some banks require a Social Security number to open a bank account or credit card account, but other banks do not—so it is possible for an undocumented immigrant, for example, to open a bank account or credit card account.
Banks are required by law to obtain some basic personal information from you when opening a new bank account or credit card account. This information—and the documentation required to provide it—includes:
• Name and date of birth—as shown on (1) an unexpired passport; (2) a government-issued driver’s license—including a foreign license; (3) a Consular Identification or Consular ID card; or (4) a birth certificate. And in some cities that issue municipal IDs—such as New York City and San Francisco—those IDs may be sufficient proof of identity.
• Proof of address. Banks and credit unions generally require proof of a street address to open a bank account—which may be shown by presenting (1) a current driver’s license or municipal ID; (2) a utility bill; or (3) a lease agreement.
• Identification number. The requirement of an identification number may be met through (1) a Social Security number (SSN); (2) an Individual Taxpayer Identification Number (ITIN); (3) an alien identification card number; or (4) another government-issued document that proves your nationality or residence—such as a passport or foreign driver’s license. ITINs are used by the Internal Revenue Service (IRS) to process income taxes and are only available to noncitizens in the U.S. who are not eligible for a Social Security number.
To get an ITIN a person must (1) complete the required W-7 form available at https://www.irs.gov/pub/irs-pdf/fw7.pdf; (2) submit proof of identity (passport or driver’s license) along with a completed federal tax return; (3) mail in the application, or take it to an IRS walk-in office, or deliver it to an approved Acceptance Agent (generally colleges, accounting firms, tax preparers, banks, credit unions).
In Kentucky, as in other states, bank accounts offer a secure way to store money, with the added benefit of federal insurance through the Federal Deposit Insurance Corporation (FDIC) up to $250,000 per depositor, per insured bank, for each account ownership category, in the event of a bank failure. This protection does not cover theft due to robberies. Credit cards provide a convenient payment method and can help build credit history, which is useful for obtaining loans and mortgages. Banks are mandated to collect personal information for identity verification when opening an account or issuing a credit card, which can include a name, date of birth, proof of address, and an identification number such as a Social Security number (SSN), Individual Taxpayer Identification Number (ITIN), or alien identification card number. While an SSN is commonly used, an ITIN or other government-issued documents may suffice, especially for undocumented immigrants. To obtain an ITIN, individuals must complete a W-7 form, provide proof of identity, and submit a federal tax return. This process can be facilitated through IRS offices or Acceptance Agents. It's important to note that specific requirements may vary by bank, and some banks may have additional criteria for opening accounts or issuing credit cards.
