How To Open a Bank Account?
Whether it be a client who’s had joint bank accounts for years and is now opening their own accounts, or a new couple who are getting married and haven’t opened a bank account since high school, the process of opening a joint or separate bank account can feel confusing. You want to pick the right account for you, but are surrounded by so many options to choose from. Today we will discuss the easy steps to opening a bank account, as well as understanding your options.
Determine Which Bank or Credit Union You Want to Use
We see banks on every corner as we drive to work, and ads for financial institutions are everywhere from billboards to commercials. So how do you choose which option is best for you? Begin by reviewing the financial institution’s website, or walk into a brick-and-mortar branch to ask questions. Questions to consider are:
What account fees are attached to the account?
What happens if I overdraft (take more money out than you had in your account at the time) my account? -
What amount of interest do I earn on my account balance?
What types of accounts do you offer? - savings, checking, money market, etc.
What is the minimum balance I have to keep in my account?
Are there any unique features or benefits for banking with this institution?
Review at least three financial institutions before comparing and contrasting the positives and negatives of each one.
Choose the Right Account Type for You
Once you know what bank or credit union you want to use, what type of accounts would be best to open for your specific needs? There are four main types of accounts:
Money Market Account - the interest paid on this account is based on interest rates in the money markets
Checking Account - used for everyday spending, this account includes access to a debit card and checks
Savings Account - primarily used for saving money, rather than everyday expenses
Certificate of Deposit (CD) - typically, the longer period of time you choose to leave the money in this account, the higher interest rate you will collect on the balance at the end of the term. You cannot touch the money for the term without potentially losing the higher interest rate.
Discuss with the financial institution what option may be best for you based on your needs. You may also consider opening more than one account for different purposes. For example, you may have a checking account for your everyday expenses and a savings account to save up for a specific purchase, like a home.
Provide Your Personal Information
In order to open an account, you will need to verify your identity. When going to open an account, be prepared to provide details such as -
Driver's license or other form of identification
Social security card or number
Paperwork showing your address, like a mortgage statement or lease
Completed application paperwork
Initial deposit, if applicable, for accounts that require a minimum deposit
In addition, be aware that the financial institution may run your credit.
Add Money to Your Account
Typically, you will need to make an initial deposit into the account. From there, you will be able to set up direct deposits, such as from your employer; use the ATM or online system for deposits or withdrawals; and transfer funds to different accounts electronically.
It is always important to consider the minimum account balance for each account so you don’t overdraft the account. Most financial institutions will allow you to set up email or text warnings before your account gets too low.
Now You Can Use Your Account
You’re all set-up and ready to go! Depending on the account type you chose, it may take time to access all of its features. For example, you will usually need to wait about a week before you receive your debit card in the mail.
Make sure to check out your financial institution’s benefits and see how they can add to your financial goals. A helpful financial institution is there to answer your questions and help you maximize your savings potential.