How to open a Bank account: What you need
If you want to open a bank account, being ready with the proper documents and being informed will save you time and money. There are a few steps that you need to follow to ensure that you make the right decision. If you are not sure about what you need to open your bank account, here is everything that you need to know.
Most of the credit unions and bank accounts have a straightforward procedure. Opening a bank account is a matter of choosing a bank, providing your details, and funding the account.
Choose a credit union or bank.
There is a massive difference between credit unions and banks. Banks are for-profit enterprises, while credit unions are not for profit. Credit unions offer better customer service as compared to banks. Moreover, credit unions provide a higher interest rate on deposits and low rates on loans. Banks implement new tools and technology more quickly. Some of the factors that you should consider when choosing between credit unions and banks include:
• Determine what matters most to you. Identify which account and customer service feature works best for your situation and make a prioritized list.
• Research on which regional, national, or online credit unions and banks provide the best account feature for what you are looking for. Local and regional banks have a friendly fee structure while getting the fee waived at national banks. Online banking can help you earn a higher interest rate on a savings account and reduce your costs.
What to ask a credit union or bank account?
• What fees do the bank account and credit unions charge, and how much are they? Ask the financial institution about the overdraft and monthly maintenance fees.
• How many branches and ATMs do they have? If in-person services are essential to you, look for a credit union or bank account with local branches. If you need to withdraw and deposit money frequently, ensure that you have access to the nearby ATM.
• What interest rate does the bank or credit union offer? Check out the different accounts' interest rates that you are considering from various credit unions and banks.
What do you need to open an account?
The most convenient way of opening a bank account is by visiting the institution's website. One of the advantages of opening an account online is that you can do it at any time and from anywhere. If you are not comfortable opening a bank online, you can visit the branch during business hours. Before you leave the house, ensure that you have the following items:
• Social security number
• Government-issued IDs such as passport, driving license, and military ID.
• Mailed and physical address
• An initial deposit
Select the product you want
Once you have decided on the institution that you want to open your account, the next step is to choose the account type and services.
• A checking account is used to make payments and receive direct deposits.
• A savings account will allow you to earn more interest.
• Certificates of deposit are products that can earn you more interest than savings, but they require you to lock up the funds for a certain period.
• Money market accounts earn slightly more than saving while still maintaining access to your funds.
A bank can offer a variety of products, each with different levels of services and names. Premium accounts contain more features and have a higher monthly service fee, overdraft fee, and ATM fees.
Make sure that you choose a feature or fee that meets your budget and needs. For instance, if you want to keep a low balance in your account, select an account with no or fewer fees. If you plan to open an account online, you have to visit the website and evaluate the products. Click “open an account” and click “checking” to analyze each product.
Provide your information
When opening a bank account, you will have to provide personal information to the bank. To protect themselves and comply with the law, banks cannot open an account without verifying your identity.
You will need to provide the bank with information such as your birth date, identification number, name, and mailing address. If you are opening a bank account online, you will be asked to type this information. If you decide to open up an account in person, be sure to prepare to hand your ID to the banker who will make a photocopy.
Most of the bank accounts will check your credit to see if you have any problem paying for your loans. You do not need to have good credit to open an account. However, having bad credit can sometimes lead to denial.
Agree to the terms and conditions
You will have to agree to the rules and accept certain responsibilities for activities in your account. You should read the terms and conditions to know what you are getting into. If you decide to open the account online, you will complete this step by clicking the “I Agree” button.
Below 18 years old
If you are below the age of 18, you will need a person over the age of 18 to open an account. You will be able to use online banking and debit cards, and eventually, when you are 18 years old, you will get your account.
If you plan to open a joint account, you will need the personal information of all the account holders and the signatures from each of them. The best way to do this is to get everyone together in one place and complete the application process.
Signing and funding your account.
If you are opening your bank account online, you will need to print, sign and mail the institution's documents. If you are opening a saving or checking account, you will be required to make an initial deposit into the account. Sometimes, this is required as part of the opening process, and other times, the funds can be deposited after the account is up and running. There are several ways that you can fund your account:
• Deposit cash which will be available for spending the next day.
• Deposit a money order or check that will be available within a few business days after you have deposited.
If you follow all these steps, you will have your bank account in your name. The account will be ready for use within a few minutes or days. To make the most out of your account, sign up for free account features that can help you manage your money, such as online bill pay, alerts, and remote check deposits.