Banking
- Opening a Bank Account
Basic Banking: Opening a Bank Account
Having a bank account is a sure way to keep your money safe. A bank account also allows easier access to money-saving and investing tools. Many financial institutions have tools to help customers be successful with their money including financial counselors, budget worksheets, or investment accounts.
When opening a bank account, first choose what financial institution you want to work with. Look at each account’s fees, minimum balance requirements, and any perks offered with the account. Some accounts may come with free checkbooks or no minimum balance requirements. Other accounts may charge a fee if you use your debit card too many times a month or if your account dips below a certain amount. You can open accounts at multiple financial institutions as well; there is no limit on how many accounts you can open.
To open an account, you will need some personal information. This includes an ID, a social security number or ITIN, and possibly proof of your address. Depending on the financial institution you open an account at, you may also have to make a deposit to open your account.
If you open an account at a bank, you can choose to have a savings account, checking account, or both. For most people, having both is beneficial. If you open an account at a credit union, you will most likely be given both a checking and savings account that is linked.
A checking account is a transaction account. This means you can use a debit card linked to your account, and you can make purchases online using your account information.
A savings account is not a transaction account. You would not have a debit card linked to this account, and the money in the account is meant to be kept there to accumulate interest. You can move money between a savings and checking account, although there are rules about how often you can do so. If you plan to spend the money within a month, it is best to keep it in your checking account. If you are saving up your money, you can put those savings in your savings account.
- Debit Card vs Account Number
Every account you open has an account number. This is an identification number you will need when using direct deposit, apps like CashApp and Venmo, and when you want access to your money. If you have a debit card, the debit card will also have its own identification number. This is a number only registered to the debit card. It is different than your account number. This number is important when you are making online purchases. When you are making a payment online, for example for rent or your school bill, pay attention to whether you need your debit card number or your bank account number. If you put in the wrong one, your transaction will not go through.
- Accessing Your Account
You can always go into your financial institution to check on your account. However, most banks and credit unions have free online banking that is quicker and easier. Online banking may be available through their website or as a phone app. Some financial institutions also offer banking by phone where you can call in and get information related to your account. ATMs can show you your current balance, and you may also be able to access other features such as loan payments through the ATM.
- Writing a Check
A check is a financial instrument, like cash or a debit card. A check is a piece of paper that you fill out and can use it to pay for goods or services. Your financial institution can provide checks for you. The checks you write are connected to your checking account, and once someone deposits the check to their account, the money the check is worth comes out of your account. Checks are useful for large purchases, like putting a down payment on a car or paying your bills. Here is a video on how to fill out a check.
