Everyone should consider opening their own checking account, where they can safely keep their money with a bank and access their funds remotely at any time. When considering opening a first-time checking account, you should keep a few things in mind.
Benefits of opening a first-time checking account
Setting up a bank account isn’t just for fun. There are several benefits to getting a first-time bank account.
Safety
Having your money in a checking account means it isn’t at risk of being lost to natural disasters or home break-ins. Federal Deposit Insurance Corp. (FDIC) insurance also protects up to $250,000 in your account from potential bank failure.
Convenience
Checking accounts let you easily transfer money to others or withdraw cash. You can set up direct deposit so you get your money automatically and set up automatic bill pay through your account if it’s available.
Avoid the high-interest rates of credit cards
If you don’t pay off your credit card every month, you start owing interest which means you’ll pay much more for items over time than the price tag originally said. If you pay using your debit card or by transferring money from your checking account, you don’t pay interest.
Establish financial credibility
Lenders review your monthly income before deciding whether to lend you money and at what interest rate. With a checking account, you can send them your bank statements. You can use that same bank statement from your checking account when requesting a greater line of credit.
Choosing a bank or credit union
Trying to pick one of the many banks and credit unions can be overwhelming. Do a little research to find out which is right for you.
Reputation and stability
Look for banks or credit unions that have a solid reputation and a history of financial stability. To ensure this, research their track records, financial standing and customer reviews
Account fees and minimum balance requirements
Consider the fees associated with different accounts and whether you’re comfortable with them. The minimum balance requirement will vary between banks, sometimes falling somewhere between $0 and $100.
ATM access and fees
Check the availability of ATMs in your area. Consider what’s best for you and how often you’ll be visiting those places. The frequency with which you stop by might be determined by ATM fees, which some banks and credit unions charge for transactions.
Online and mobile banking services
Nowadays, most banking can be done online or through the bank’s app. ATM and other banking services can be done solely from the app. Check out different banks’ apps and online platforms to see whether you like them.
Customer service
Look for institutions that provide accessible and responsive customer support through multiple channels such as articles, live chat online, call or go to the business in person to get help.
Products and services
Setting up a bank account isn’t the only thing you can do at your bank or credit union. You can also open savings accounts, take out loans, open and manage credit cards, browse investment options and access additional financial services.
What are the requirements to open a bank account?
Setting up a bank account requires you to bring a few things with you to your appointment and meet a few requirements.
Government-issued ID
Bring a valid driver’s license, passport or other government-issued ID with you to your appointment.
Minimum age
Typically, you have to be at least 18 to open your own account, but your parent or guardian can also open an account in your name.
Social Security number
You will need to have your Social Security number or Individual Taxpayer Identification Number to open a bank account.
Minimum deposit
Most banks require that you make an initial deposit when you open a checking account. That will typically be somewhere between $25 and $100.
Proof of address
Most banks in the U.S. require a proof of address. That can be a bill, a mortgage document, a bank statement or other types of posted mail with your name on it.
Tips for managing your first-time checking account
Opening your first bank account is a big step therefore you should keep a few things in mind.
Tracking spending
Checking accounts keep track of every purchase you make and every bit of money that comes into the account. You are able to see where your money is going and where you may need to make financial adjustments.
Establishing a budget
Having a card on hand makes some people spend more easily since you have access to all of your funds at once. Make sure to establish a budget so that you are able to save instead of spending more than you typically earn.
Using mobile banking apps
Banking apps are fantastic because they let you check your balance, transfer money and more right from your phone or computer.
Setting up automatic payments
Automatic payments help you make sure you always pay your bills on time. Those can be linked directly to your debit card or bank account. Just make sure to set up alerts before the money is withdrawn from your account so you aren’t surprised by the decrease in funds you have available.
Protect your account information
Phishing attempts and suspicious emails are common. Make sure not to share your account number, PIN, and online banking credentials with anyone
Welcome to the world of banking
Opening a checking account for the first time is a big step, but it’s one nearly all adults take. Having a bank account makes keeping track of your finances easy. It can also help you track your spending and stay on top of your bills. As you explore different checking and banking accounts, make sure to compare fees, perks, and policies to find the perfect fit!
FAQ
What fees should I expect with a first-time checking account?
Some banks charge a monthly service fee if you don’t meet account minimums. You also have to be mindful not to pull out more money than you have, resulting in overdraft fees. Other fees may apply as well, be sure to compare fees before making your decision.
What are the benefits of having a checking account?
Checking accounts let you access your money from anywhere so you can pay bills and transfer money easily. The money could earn interest depending on what the financial institution is offering.
Can I switch banks or close my first-time checking account without penalty?
Yes, typically, you can switch banks or close your first-time checking account at any time. Some banks may charge you a fee for closing your account before a certain time period, so make sure to ask about this before making any decisions. If you’re switching banks, make sure to transfer all funds and automatic payments over to your new account before closing your previous one.
