Opening a checking account is the start of setting up your financial life. You can use the account to pay for purchases with checks or with a debit/ATM card. You can also receive payments from other individuals or your place of employment.
Before you open a checking account, you need to take certain steps to begin the process. Look below at things you need to do before applying for a checking account at a bank.
What will you use the account for? Do you need the bank to be near you? How much money do you want to keep in your account? What features do you want? Are you worried about bank fees? Once you figure out your needs, then you can figure out which bank will work best for you.
Banks and credit unions offer different features and charge different fees for their checking services. Features to consider include branch locations, extended hours, extra customer service, customized banking, electronic banking options, and overdraft protection. You will also encounter some restrictions such as limits on transactions and length of time it takes for deposits to clear. Some banks have certain policies that include minimum opening deposits, minimum balance, or direct deposit requirements. Banks also differ in the costs and fees they charge, including monthly service fees, overdraft fees, debit card fees, low balance fees, online banking fees, and printed check fees. With so many differences in all these areas of banking, you'll have to compare them and choose the bank that best fits your needs.
You may want to set up a joint account with a family member so that a spouse, parent, or child can access your account. If you use the account for business, you may need to give access to another person. Access can be set up when you open the account.
Now that you have figured out your needs, you are ready to actually open a checking account! Look through the step-by-step guide below.
There are certain items you need to present in order to open a bank account. These include your legal identification (driver's license, Social Security card, passport, or birth certificate), proof of your address (a bill or credit card statement), and the opening deposit (the amount of cash required to open the account, usually between $25 and $100).
You will need to fill out an application document to open an account. You can usually download the application online and fill it out, or you can go to a bank branch and fill out the application there. You will include your personal information on the application so the bank can look at your credit and financial history.
You will need to fill out and sign a signature card for the bank to keep on file. This is used to compare your signature against checks that you sign. With online banking, you might have to fax or email this form.
You have to make an initial deposit to open an account. This can be cash, a check from an existing account, or a money order. Once the deposit clears, you can use the account.
To make account access easier, the bank will give you an ATM/debit card and send you checks and deposit slips. You can now access your money in several ways as you see fit——without having to visit the bank.
Many banks offer direct deposit of your earnings from your employer straight to your bank account. Typically, banks can waive fees for having a checking account if you set up direct deposit. To set up direct deposit, give your banking information to your employer, who will then deposit your earnings into your account electronically instead of issuing you a paper check. Direct deposit is faster than waiting for a check to clear.
Now that you know how to open a checking account, apply your knowledge to the question below.
Question
How can fees affect your decision in choosing a bank account?
Banks charge a variety of fees that can significantly affect your account. Monthly service fees, overdraft fees, debit card fees, low balance fees, online banking fees, and printed check fees differ from bank to bank.
