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Knowing what you need to open a bank account is fundamental to managing your personal finances. Fortunately, opening a bank account is still as easy as ever, and with the advancements of the Internet, you may even be able to open it online. Once you know what you’re looking for in a bank account, all it takes is a little organization and preparation. Here are the steps to follow in opening a bank account.
Know What You Need in a Bank Account
Perhaps the most difficult aspect of understanding how to open a bank account is determining which type is right for you. The number of choices – in terms of types and providers – can be daunting. When you know precisely what you need in a bank account, you can quickly narrow down your choices. Here are some considerations when opening a bank account:
- Do I need a checking account primarily to deposit my paycheck, pay my bills, write checks or all of the above?
- Do I need access to a physical branch? Most bank transactions can be completed online, including check deposits through remote capture on your smart phone.
- Do I need access to a network of ATMs or will I just be using my bank’s ATMs?
- How much money will I be keeping in my account, on average, each month?
- Do I want a high interest savings account linked to my checking account?
- Will I be direct depositing my paycheck or depositing it at a branch?
- What’s more important, convenience or minimal fees?
- Is it important for my bank balance to be earning interest?
- Do I qualify for any special accounts available to seniors, students, or military personnel?
Compare Banks and Account Offerings
Once you identify your needs, use it as your checklist to compare different banks and their offerings. Don’t limit your search to the banks in your neighborhood. The Internet has literally shrunk the financial world, giving you access to an entire universe of financial institutions that reside online. Through any number of comparison websites, you can view the offerings of banks across the spectrum including big banks, regional banks, credit unions, and online-only banks. You can review the details of their offerings and compare fees.
Most bank accounts involve fees of some sort, which is certainly a major point of comparison. It is important to know what fees are charged and why before opening a bank account, keeping in mind that some banks may charge a low fee for one feature, but make it up with higher fees on other features. Here is a list of the fees most banks typically charge:
- Monthly service or maintenance fee. Some banks waive this fee if you keep a minimum balance or make a certain number of direct deposits each month.
- Overdraft or non-sufficient fund fees. These can range from $27 to $35 a month.
- Debit card or ATM fees. Banks offer free debit cards but you could incur fees for using out-of-network ATMs.
- Online banking fees. Most banks offer online checking for free, but you may have to pay for features such as online bill pay.
- Check fees. Most banks now charge for printed checks. If you think you will need checks, you might get them cheaper from a third-party check printer.
Opening the Bank Account
Once you decide on a bank and account type, you are ready to apply for a bank account.
Depending on the bank you choose, you could apply in person or you might be able to apply online. Either way, you will need to be prepared. You will need the following information to complete your application:
- Valid identification. A driver’s license, passport or some other government-issued ID is required. If you are not a U.S. citizen you may be able to use a government-issued ID from your home country.
- Social Security number. You will also be providing your date of birth, address, phone number and email address.
Most banks require an initial deposit when opening a bank account. Typically, the minimum deposit is $25 to $100. Whether you are opening your bank account online or at a branch, you can use a debit card or credit card to make the initial deposit. For an initial deposit at a branch you can also use a cashier’s check, money order or cash.
Completing the Process
Once you submit your application, the bank will run a quick background check on your banking history. If you are approved, you will receive an account agreement that includes your account information. You may have to wait a week to receive your debit card in the mail. Once you have an account number, you should have immediate access to your account on the bank’s online platform. You will also want to set up direct deposit of your paycheck with your employer.
Author: Jeff Gitlen