How To Open A Bank Account
U.S. banks
offer many types of accounts: checking, savings,
money market account, CD's (certificates of deposit)
and other investment vehicles to help you save for retirement.
To
open a bank account, you will need to bring the following identification:
- your
driver's license or state i.d. number
- Another
form of i.d. (like a credit card, passport, work i.d. card or student
i.d. card)
- your
social security card, if you are a resident
When opening
a bank account you should balance cost and convenience. Shop around
to different banks. Some banks and credit unions
offer accounts with no monthly fee and no minimum balance, others offer
accounts with monthly fees and a minimum balance but more ATM (automatic
teller) machines and branch locations, while still others pay out interest.
!
Beware of extra ATM surcharges for using other
banks' ATM machines. Some can charge up to $2 in extra fees just for
withdrawing money.
Check
to see if the bank requires:
- a minimum
deposit to open the account
- a minimum
"balance", or amount of money that must remain in the account
(many banks charge a fee if the account falls below a certain minimum
balance). Many banks offer free checking with no minumum balance.
- a monthly
service fee
- a per-check
fee
- a per-transaction
fee
- ATM
fees
- if you
open several accounts, like a checking and a savings account, ask
whether you can combine balances to avoid paying a service charge
on the checking account if you go below the minimum balance.
Some larger
banks now offer online banking so you can pay your bills online. Other
newer banks are completely online.
Credit
Unions
Employees of many businesses and institutions can open an account with
their employer's credit union. Many credit unions offer no-fee, free
checking accounts with no minimum balance, as well as credit cards.
Ask your employer.
ATMs
If you
receive an ATM card from your bank you will be asked to choose a four-digit
PIN (personal identification number) to use at an ATM. Make sure this
number includes four different numbers, not 1111.
- When
using an ATM, especially in a large city, make sure it is located
in a safe area.
- Avoid
using ATM's at night if in an urban area. Many ATM's have security
cameras, but this does not mean you won't be in danger of being mugged.
Checking
Accounts
A checking
account lets you write checks or withdraw money as often as you like
without penalty as long as you meet the bank's minimum balance requirement.
Some types of accounts at some banks require no minimum balance. These
are called "free checking" accounts. Ask your local bank if
they have free checking.
Banks offering
free checking include:
Useful
Tips on Checking Accounts:
!Before
depositing a check, you must endorse the check on the back with your
signature and/or account number. To be safe, you should also write "for
deposit only" on the back. If you do not add "for deposit
only", once you endorse the check, it is as good as cash and can
be cashed by others if it is lost or stolen.
!If
you wish to use the check to pay someone else, you should write, "Pay
to the Order of {the payee's name}".
Savings
Accounts
Savings
accounts are usually accounts that pay a certain amount of interest.
They are designed for savings, not withdrawals, but most allow you a
fixed number of withdrawals at a small or no fee using a book of savings
checks you can obtain from the bank.
CD's
- Certificates of Deposit
If you
are planning to keep more than $500 in your account for longer than
6 months at a time, it might be useful to place the money in a certificate
of deposit, or CD's, interest-bearing bonds held for a fixed period
of time like 90 days or 6 months. CD's generally earn higher interest
rates than savings accounts and pay out interest depending on both the
length of time (60-day, 90-day, 6-month, year) and the amount invested.
