What do you need to know before you sign up for a checking account? If this is your first banking experience, take a look at the dos and don'ts of opening a new account.
Do Learn More About the Different Types of Accounts
Is a checking account the right fit for your needs? The most common types of bank accounts include checking, savings, money markets, certificates of deposit (also known as CDs), and individual retirement accounts (IRAs). The differences between these accounts include:
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Checking account. This basic bank account allows you to deposit and withdraw money easily. As the name implies, you may also write checks from the account. Think of a checking option as a short-term holiday account.
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Savings account. If you don't need to access your money soon or often, a savings account can help you to earn while your money sits safely in the bank. These accounts aren't as easy to withdraw from but accumulate interest.
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Money market accounts. This is a checking-savings mix. Money markets accrue interest and often come with checks. But they also may limit the number of checks you can write monthly.
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CDs. A CD is not an account that you would regularly withdraw from. This interest-bearing option will stay in the bank for a specified time.
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IRAs. This tax-deductible/tax-deferred retirement account helps you save for the future.
You don't have to limit your banking options to one type of account. If you want to write checks or withdraw money and save for the future, you can open a checking account and a savings account, money market account, or CD.
Don't Skip the Fine Print
Not all checking accounts are the same. Even though each account may allow you to deposit and withdraw money (along with writing checks), some have extra perks or risks/penalties. Read the fine print or ask a banker for more information before you agree to open an account. More specifically, look for costs related to purchasing additional checks, account minimums, overdraft fees, services fees, overdraft or service fee alerts, and online or app-based banking options.
Do Bring the Right Documents
Banks require documentation to open any type of account. This helps to prevent fraud and identity theft. Before you open an account, ask your banker what documents the financial institution requires. These typically include a social security number/card and valid ID (such as a driver's license, passport, or state-issued identification card). You may also need to provide proof of your address—such as mortgage statements, a lease, or utility bills.
Contact a company like Bellco Credit Union to learn more.
