Opening a bank account shouldn’t be difficult. In our age of highly developed banking system, a life without bank accounts defies imagination. Indeed, it seems easier for us to visualize activities somewhere on the untrodden Venus or Uranus than picture a person who doesn’t know how to open a bank account. While people usually have a very clear idea of what to do in the bank, what follows is not a manual for dummies. Nor is it a guide for those who have just landed from the untrodden Venus and Uranus themselves. Rather, it’s a gentle reminder to anyone who opens a bank account for the first time — young people or immigrants arriving to a new country — or to those who did it so long ago that need to refresh their memory of the exact process.
How you actually open a bank account depends whether you do this online or come to your chosen branch and have a face-to-face conversation with a bank manager. To understand more about mobile banking and to learn how to open a saving account with free mobile banking platform, we think Chime is the best one out there. You can read these chime bank reviews for more info.
Of course, it’s important to know what account you want. Here are some of the most common:
Checking Account. People open checking accounts so that they can have a place to keep their money for everyday use. You can withdraw cash from such an account whenever you wish. If you work, this is where your salary will go.
Savings Account. As the name implies, a savings account is a place to store cash and earn interest for future use. If you ever decide to use some of your savings, you can easily transfer your funds from your saving account to your checking account and start spending them.
Money Market Account. Another type of the account that also allows you to earn interest on your money is the Money Market Account. It’s a saving account, but with higher interest rates than the regular saving account. The catch is that the money market account also requires higher minimum deposits and balances than other saving accounts do.
Certificate of Deposit. If you have an amount of money that you know you will not be spending at least within the coming half-year, a better option is a Certificates of Deposit (CD). The CD is a savings account that has fixed interest rates coupled with a fixed withdrawal day called the “maturity date.” CDs have no monthly fees — but if you decide to withdraw your funds before the maturity date, you’ll pay a penalty. The longest period during which you can lock your money in the CD account is five years.
Online Only Account. As it’s name suggests, the Online-Only Account can only be accessed from your computer or smart phone; no bank employee in the bank will help you deposit money or checks into this account. Online-only accounts are the cheapest option and have no monthly charges, despite offering relatively high interest rates. However, there are drawbacks. For example, you’re unable to obtain a cashier’s check, wire money, or get a money order from an online-only account.
You can usually apply online for the bank account of your choice at your preferred bank’s website. Some banks, however, will require you to print out the completed application, sign it, and send it to them by snail mail. Typically, you’ll need to present the following documents: your Social Security Number or any other Tax Payer Identification Number, the proof of your physical address validated either by your official bills or your rent contract, and a passport or driver license. If you’re under 18, you’ll need an adult to open an account with you. In most cases, minors are allowed to obtain a credit card from joint accounts with their parents.
Most banks have their own minimum account limits, with the possible exception of online-only banks which typically require no initial deposit. There are also minimum balance requirements, which can result in monthly fees. By the way, it doesn’t matter how you make your initial deposit: you can bring cash with you, write a check, pay the amount by a debit card, or make a transaction from another bank account.
After you have opened your account and put there the required deposit, it is advisable to ensure that you monitor all operations performed there as attentively as you can. By setting an email or phone text alerts, you will allow your bank to inform you when your account balance is running low or when large withdrawals are being made. You may also set online bill payments and thus to guarantee that they are paid on time.
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