There are many reasons to open a checking account. From wanting to go cashless to providing a way to receive direct payroll deposits, a checking account can be beneficial for many financial activities. You'll be able to use one to cover expenses, deposit income, gain interest (only on some) and get access to a debit card.
Opening a checking account is a simple process. And while this can be accomplished in a matter of minutes, it is important you take your time and due diligence in research. Finding the right bank or financial institution through which to open a checking account is just as important as establishing one in the first place.
Research and Make a Short List
Before you make any decisions on what type of checking account open or financial institution to do business with, you will need to figure out your options. Make a list of the different types of checking accounts so you can identify the positives and negatives of each. Once you have a knowledge of what a checking account is and the various types, make another list of banks and what checking accounts they offer.
This first step will help you refine your search and give you clarity when making your final decision.
Investigate the Banks on Your List – Here's What to Look For
After your initial research and listing of financial institutions that offer checking account services that may suit you, it's time to do a little more research. You'll need to know the difference between a bank and a credit union and investigate appropriately.
The main difference between banks and credit unions is that credit unions are non-profit financial institutions run by their members. They normally offer lower fees and better service than typical, big banks.
The traditional bank, meanwhile, offers plenty of rewards and higher interest rates. They do so while sometimes lacking in a more personal financial service and have higher fees to accommodate their larger reach.
When conducting your own investigation into what checking account is appropriate for you these are the items you should consider:
- Interest Rates
- Additional Services
- Free / Paid Account Establishment
- Checking account types
- Minimum balance requirements
Decide on a Bank
Once you have conducted the appropriate research into a number of checking accounts and financial institutions it is time to make your decision. Will you go with a credit union or bank? Select the option most attractive to your own personal financial needs. This can be a tough task. Take time to come to your decisions, and don't be influenced by outside opinion. These are your finances, and you should be comfortable and confident in the decision you make.
Figure Out What Type of Checking Account You Want
Once you decide on a bank to open your new account with, it is time to decide on a type of checking account.
During this step it is important to understand all aspects of the account types. There are pros and cons to each. Entry level checking accounts often offer minimal balance requirements, low fees, and a fast way to establish yourself electronically. They lack, however, in rewards and additional services provided.
More robust checking accounts may require you to sustain a higher minimum balance, but they do so while offering higher interest rates, more rewards, and a number of additional services.
If you are in a financially unstable situation and have had problems in the past you may want to look for a checking account with overdraft protection. This helps protect your account from negative balance withdrawals and often comes with a number of overdraft allowances.
Gather Your Documents
After selecting the financial institution where you will open your checking account and what type of account you would like, it's time to get your papers in order. It is important to have the following:
- Proper identification: Government identification such as a driver's license, passport or social security card are often required to open a checking account. You will not be able to do so with non-government ID's.
- Social Security Number: Most financial institutions require your social security number to open a checking account. Have this number memorized, and don't let anybody else see it without knowing who they are and why they need access to it.
- Alternative documents: Not all financial institutions require the same types of identification or documents to open a checking account. Depending on what institution you choose to open an account with and what type of account you are opening, you may need to provide additional documents. Make sure you know what documents you need so you waste no time.
Apply in Person or Online
There are two main ways to open a checking account: in person or online. Though some banks may allow you to open an account over the phone, the two methods listed previously are the most popular.
The advantage of opening an account in person is a much more personalized experience. You'll be able to sit down with a bank representative and have access to a range of answers and information you may not have thought of before. They'll walk you through the process of your application, verify you have the proper documents, and send you on your way once you are approved.
Should you be strapped for time or don't have the ability to make it to a local bank, you can open a checking account online. If you choose to do this you will need to be more thorough in scrutinizing the application for all its intricacies. Make sure you understand each step of the process. If you have questions, call the bank or wait until you can visit in person.
Now You have a Checking Account
Opening a checking account is a simple process. Just about anyone out there can be approved. While this depends on the type of account you would like to open and with which financial institution, checking accounts have much lower entry requirements than credit cards or other types of loans.
The advantages of a checking account are plenty. You'll have access to a debit card, be able to deposit income, and be able to see your finances online. You'll also be paperless and not have to rely on carrying cash everywhere! Take the time to do your research, ascertain all relevant information, and enjoy the benefits checking accounts have to offer.