Open a Bank Account in 5 Steps!

By insFinance / Published on Wednesday, 22 Feb 2017 06:01 AM

Opening a bank account is not as easy as one may think.  A lot of thought and preparation is needed before you open a bank account. In general, banking may seem intimidating and tedious to many and it is very easy to fall prey to scams. In order to get a better insight into the banking world and how to open a bank account, just follow the following step-by-step tutorial.

Make sure whether you are eligible to open a bank account or not

Before you make your way to the bank, it is always recommended to check whether you are eligible to open a bank account or not. Some banks will allow you to open a bank account once you are 18, while some banks will require your parents to sign some forms. Opening a bank account means that you would have to be willing to share some basic information about yourself, like your social security number. Apart from this, you need to have at least the minimum amount of money required to open an account. This normally varies from bank to bank but in order to give you an idea, a basic Bank of America savings account will require to deposit $300 minimum.

Choose the bank to open an account with

This is one of the most important aspects in opening an account. All banks are different and even though the services provided may be similar but the quality of those services will differ. Large chain banks have branches in many cities and countries and the quality of those services will be consistent in all of those branches. Large chain banks also have a trusted reputation so their chances of failing are very meager. On the other hand, smaller local banks provide a more personal experience. They provide one-on-one attention and will be willing to go to the extra mile for you. But smaller banks do fail more than large banks.

No matter which bank you choose, always put great effort in researching about the bank. You can visit them, check their websites or ask about banks from your family and friends.

Pick the type of account you want to open

If this is your first time opening a bank account, then chances are you will either open a savings account or a checking account. If you have spare money then it is recommended that you open both checking and savings account as both of them fulfill different functions.

Checking Account:

A checking account is best suited for day-to-day transactions. You will not receive any interest payments on the money you store in a checking account. A checking account will also come with a checkbook and a debit card that you can use for purchases.

Savings Account:

As the name implies, a savings account is best meant for saving money. The main difference between a checking and savings account is that in the savings account you will receive interest on the money deposited. The more money you put in the account and the longer you save it, the more interest you will receive. You can still withdraw cash from a savings account but you cannot use that money for checks and debit card payments.

Provide the necessary information

As mentioned before, you will have to share your basic information with the bank you choose to open an account with. Most banks will require you to provide necessary documentation. When you are on your way to the bank, it is recommended that you have a government-issued ID, proof of address and social security number.

Actually open the bank account

You can open a bank account in person, online or even on the phone. It is recommended that you open the bank account in person, especially if this is the first time opening one. The reason behind this is that you can ask multiple questions to the bank representative and receive immediate answers. It is always helpful to ask questions that may bother you on some scale because it will give you more of an insight into the services provided by that respective bank. Another advantage of opening a bank account in person is that it is speedier and you will receive confirmation documents on the spot

This wraps up this tutorial on how to open a bank account in five steps.