Managing your money without a bank account is doable but it can be challenging especially during a pandemic. You might get started with your first job, study abroad, or your economic impact payment might have arrived weeks before, but you can’t choose the faster delivery option of direct deposits into a bank account. And all of these can be resolved by having a bank account. You can consider opening an account so that you can easily track your money and save accordingly.
When you open your first bank account, the process might seem a bit daunting. From figuring out what type of account you need, to which bank to choose, and what offers they are providing, you have plenty of choices.
However, you can consider these factors that will simplify the process, and opening your first bank account will be a breeze.
Where should I open my bank account?
Unlike the older times, there are a lot of options nowadays to open a bank account. Even if you find banks intimidating or had issues getting an account before, you get plenty of options to choose from.
Brick-and-mortar banks, online banks, and credit unions are the top three choices but the question arises as to how do you decide which account is the best fit for your needs?
Brick-and-mortar banks
These banks are the big names that you see in cities across the United States to smaller regional banks dedicated to specific states.
A brick-and-mortar bank is an excellent choice for you if you like to visit a branch in person and prefer a huge network of fee-free ATMs.
These banks will offer you all the basic services like checking and savings accounts, credit cards, loans, and other financial products. Many of them will even offer you free checking accounts due to increasing competition.
So, do check out the latest offers, monthly account maintenance fees, and various reviews before you open an account.
Online banks
Online banks usually don’t have a physical location that you can visit but they are a great deal if you want the lowest-cost bank accounts that offer the highest interest rates. If you don’t have time to visit a branch or prefer managing your money online with a digital experience, you may find that an online bank offers you everything you need.
Ranging from fee-free accounts with no minimum balance requirements to waived ATM fees and mobile check deposits.
Credit unions
While many large and regional brick-and-mortar banks are publicly held companies, credit unions are membership-based financial institutions. When you join a credit union you become a part-owner.
Although credit unions require your professional relationship with an eligible company or an organization to qualify for membership. If you have failed to gain membership at a credit union you can try again as Pedro Murillo, area branch manager in the San Francisco Bay Area for Self-Help Federal Credit Union says, “We’re very lenient at giving someone a second chance”.
“If an employee comes in to apply for a loan and doesn’t have pay stubs, what else (can they) show us? A letter from (their) employer? We don’t want to give up.”
A credit union can be a good choice for someone who likes to visit an in-person branch and receive more competitive interest rates on their savings and loans than at a larger or regional bank.
What kind of account is best for me?
A checking account is not as same as a savings account. Checking accounts are made for everyday spending while savings accounts help you to save. So, deciding what type of account you need, can go hand in hand with determining where you will open it.
If you have any preferred financial institution in mind, now is the time to review its financial products so that you can find your perfect match.
If you have a specific type of account that you want to open with particular features, you can use that information in choosing the best account.
And if you are opening your first bank account, you will likely want to open a checking account and in some cases a savings account.
Checking account
A checking account is simply referred to as a bank account and it gives you a financial launchpad. You can receive your payments like your paycheck via direct deposits. You can also send payments for your monthly expenses such as rent, utilities, and groceries either directly from your account or use your debit card when you are shopping.
Many banks will offer you free checking accounts to help you get started. Some may require a minimum monthly balance or direct deposit of your paychecks to keep the monthly fees at zero. Other banks will offer you a no-strings-attached policy and you can avail the benefits of truly free checking accounts.
With all the checking account options available, you have to review all the terms and conditions for the account, including fees, before opening an account.
Savings account
If you open a savings account along with your checking account it could be a smart choice, as it will help you build your emergency fund or save for a larger goal like a house downpayment or buying a car.
Savings accounts help you save money, as they offer limited withdrawal options. Your money can be easily automated from your checking account to your savings account so you can move a certain amount at regular intervals from checking to savings.
If you choose an online saving account at any online bank, you might receive higher interest rates in comparison to the traditional savings account.
What documents do I need to open a bank account?
Once you have decided where you will be the banking and the type of account you will be utilizing, you need to provide the bank with some information. When you set your appointment, make sure to ask what documents to bring.
These are the common documents that you will need:
Once you have completed the procedure, the bank will review your documentation and will inform you when your bank account is up and running.
How to start using my bank account?
Here are some methods that will help you get started with using your bank account: