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 Rhode Island, as in other states, bank accounts offer a secure way to store money, with the added benefit of FDIC insurance up to $250,000 in case of bank failure, not robbery. This insurance protects depositors if the bank itself becomes insolvent. Credit cards provide a convenient payment method and can help with building credit history. Banks are mandated to collect personal information for identity verification when opening accounts, in compliance with federal laws such as the USA PATRIOT Act. Acceptable forms of identification include unexpired passports, government-issued driver's licenses, Consular ID cards, and in some cases, municipal IDs. Proof of address can be established with documents like utility bills or lease agreements. An identification number is also required, which can be a Social Security number (SSN), Individual Taxpayer Identification Number (ITIN), or alien identification card number. ITINs are available for individuals who do not qualify for an SSN and can be obtained by submitting a W-7 form, proof of identity, and a federal tax return to the IRS. While some banks may require an SSN to open an account, others may accept alternative forms of identification, making it possible for undocumented immigrants to also open bank accounts or obtain credit cards.
