If you’re looking for an opportunity to open a checking account, but don’t know where to start and what to look for? Opening a checking account is easier than what you might expect, the only thing that might be hard to determine is which type of checking account is suitable for your needs.
Continue reading below since we will be reviewing what you need to know in this guide.
What To Consider Before Opening a Checking Account
Before you decide to open a checking account, you will need to decide which bank or credit union you want to use. From there, the credit union or bank you decide to bank with will have multiple options to choose from.
Definitely try to choose the ones with the best opening bonuses. We’ve developed a checklist of questions you want to consider when opening your account. Just continue reading!
Step by Step Guide
A majority of banks and credit unions out there will allow new customers to open an account with them online or in-person (provided they have physical locations). People are allowed to do so they turn 18 and is a US citizen or legal resident.
Here’s a step by step guide on how to open a checking account.
- Gather your information. Generally, when you open a any type of account. The financial institution must verify your information. You will need these things for that:
- Government issued ID, like a driver’s license
- Social Security Number
- Proof of address (lease or utility bill)
- Contact information (name, home address, email address, phone number)
- Date of birth
- Have money for an opening deposit. Not all banks and credit unions require this, but you should always be ready to make some sort of minimum deposit for a checking account. Some may be as low as $25.
- Fill out an application. You can complete this step either in person or online. Financial institutions will use this time to run a credit check on you to see your past banking history and make their decision to accept or deny you for the account.
- Sign paperwork. Once approved for the account, you must sign for it to finalize everything. If you are applying online, you should be able to sign it electronically, but some banks may want you to mail in or fax your signature.
- Make opening deposit (if required). You have the option of funding your opening deposit in ways such as electronic transfer, wire, or physical check. Keep in mind that it might take a few days for the funds to be available.
- Use your new checking account. Now, just start using your account. Set up your online account and get the mobile app. You’ll usually receive your debit card and checks in the mail a few days after opening. You can set up direct deposit, add bill pay, and link other bank accounts.
Why Open a Checking Account
A checking account is useful because it is meant for your everyday transactions and banking activities. Some of the more common things a checking account is used for can be to:
- Deposit your income
- Pay bills online
- Make purchases with your debit card
- Withdraw cash from ATMs
- Write checks
The money in your account is completely yours and you can use it however you choose. Deposit, transfer, and withdraw money without any limit as long as you have the money in the account.
Where To Open a Checking Account
The first step in opening a checking account is choosing the right financial institution for you. With that being said, you have three main options to choose from. Each option has perks and cons, so it is up to you to choose the best route for you.
- Traditional bank. These are the types of banks you see when you’re driving around. They have physical locations and can be large nationwide banks, such as Chase or Wells Fargo, or smaller banks. They can provide in-person service, but they tend to have more fees and balance requirements.
- Online bank. As the name might give away, these types of banks don’t have physical branches. Because they don’t have physical branches, the smaller overhead costs will result in higher interest rates for your accounts. However, they do not have any in-person banking, so this may be a con for some.
- Credit union. These financial institutions tend to provide better personalized service and lower fees. They usually service a certain area, so the availability may not be as great. But many credit unions now also offer online accounts that anyone can open.
How Much Money Do I Need To Open An Account
Many banks let you open a checking account with $0. Most online checking accounts don’t require an opening deposit. Popular banks like Ally Bank, Discover, and Capital One all have no minimums.
It’s also possible to open checking accounts with physical banks for no (or very little) money. Chase Total Checking has $0 opening deposit. Wells Fargo Everyday Checking only requires $25 to open.
Each bank will have different requirements for their checking accounts. Make sure you can meet them before applying.
What Credit Do I Need
For the process of opening a checking account, you actually don’t need very good credit at all. However, if you have a poor credit history stemming from things such as not repaying debts, then you have a chance of not getting approved.
Most banks will conduct what is known as a soft credit pull when reviewing your application. This means that when they review your application, your credit score will not be harmed.
What’s more important is your ChexSystems report. This reports any previous negative banking activities, like overdrafts, bounced checks, unpaid fees, etc. If you have a poor ChexSystem report, you could be denied for a new bank account.
Features To Look For In A Checking Account
As mentioned above, different financial institutions will offer different things with their checking accounts. It is important that you take into consideration what type of services you’re looking for when making your decision. Here are some things you should consider:
Some financial institutions require that you maintain a minimum amount in your bank account to avoid any monthly service fees. If you don’t think you can maintain the amount required by the bank, you may want to look elsewhere.
Most people, at some point, will need to withdraw money. When this time comes, it would be convenient if you didn’t have to pay any fees. So, look to see if your bank has any free ATMs near you.
Some checking accounts waive a lot of banking fees. But some may charge for things like overdrafts, paper checks, insufficient funds, etc. Be aware of all the potential costs and if there is any way to waive them.
Do you often need in-person banking services? Think about if you’d be okay just doing them online or over the phone.
Are you the type to travel often? Will you need to be able to access your bank while travelling? If this is the case for you, then consider a bank that has physical locations and ATMs nationwide or even globally.
Requirements For Special Checking Accounts
If you’re looking to open a special type of checking account, know these extra requirements.
A joint checking account is simply an account that has two owners. You will need to provide the standard information needed for verification as a normal checking account. This includes an ID, SSN, contact, etc. for both people.
These accounts are designed for teens under 18. A parent will need to be a joint owner until the teen turns 18.
A lot of banks offer special accounts with less fees for college students. You will also need to provide a valid student ID or proof of enrollment/acceptance.
These accounts are for people with credit issues who have trouble getting a traditional bank account. There are no special requirements to open, however, some of these accounts have monthly fees and limited features.
Checking Account Options
Opening a checking account is easy when you have all the necessities ready. So before you commit to one, make sure that you know all the requirements needed to maintain the account you’ve chosen to avoid any extra fees.
You can look into the best rewards checking account and the best free checking accounts. While you’re here on HMB, you can also check out the best bank promotions to take advantage of.