Written by Opening a checking account, whether it’s a personal or business checking account, is relatively easy. It becomes even easier when you know what to expect. To open a checking account, you can either head over to your bank or credit union of choice or, in most cases, open an account online. The real challenge is in figuring out which option is right for you.
A financial advisor can help you match the right accounts to your long-term checking and savings goals.
How to Choose a Checking Account
Before you open one, you’ll want to make sure you choose the right checking account for your financial needs. For starters, you want to be comfortable with the bank you’ve chosen. Do you want a major bank with ATM and branch locations all over the country? Or would you prefer an online bank that requires all deposits and transfers to be made electronically? You may also want to consider the bank’s customer service ratings and reviews. These factors can make or break your experience with a bank.
Once you’ve decided you like a bank, you can dive into its checking account options. First off, research all the fees you might face with each account. Many big banks tend to charge a monthly maintenance fee, while online banks often offer free checking accounts. You can usually have a monthly maintenance fee waived by meeting certain requirements, like direct deposits or a minimum account balance. Some accounts require a minimum monthly balance as a standard, charging a penalty if your balance falls below the limit.
Banks also charge overdraft fees when you take more money out of your account than you actually have. Luckily, there are checking accounts with low overdraft fees or overdraft protection. Be sure to find out what the bank’s ATM fees are, as well. Some banks charge for each transaction you make at an ATM that doesn’t belong to that bank. Others provide access to a specific ATM network, like Allpoint, that has thousands of locations. Premium checking accounts may even allow you to use out-of-network ATMs and receive reimbursement for those fees from the bank.
Where Can You Open a Checking Account
If widespread accessibility is what you’re looking for, big banks like Chase, Citi and Bank of America are probably your best bet. These banks allow you to open your checking account in person or online. Banks like Ally and Charles Schwab have few to zero physical locations, meaning you’ll have to head to the bank’s website to apply.
Credit unions offer checking accounts, as well. Credit unions may require that you already have a savings account with them before you can open a checking account. Plus, you must qualify for membership to bank with a credit union. Credit union membership usually encompasses a certain geographic area, a specific company or an organization like a place of worship. Local credit unions based near your home tend to be a good bet. Not only can you usually qualify for membership, but you’re guaranteed a nearby location.
How to Open a Checking Account
Once you are ready to open a checking account your first step – whether online or in person – is to get your application. In person, you’ll simply need to tell a bank employee that you’d like to open an account. Online, it’s as easy as clicking an “Apply Now” or “Open an Account” button on the account’s page. The application will help the bank determine your eligibility to open an account.
During the application process, you’ll need to provide a government-issued ID, like your driver’s license or passport, and your Social Security number. You may also need to show proof of address, like a lease or a utility bill. Banks often run a credit check on you to get a better understanding of your banking history. For example, if your report shows that you’ve failed to pay maintenance fees on previous accounts, a bank may not approve you for an account.
If you are approved, you sometimes have to make an initial deposit, depending on the bank. Not all banks require a minimum deposit and the exact amount will vary from bank to bank. It’s important to know your account’s minimum before opening. That way, you can either bring the right amount of cash or be prepared to make a transfer from another account.
When you open an account in person, you’ll likely create a secure PIN and receive a temporary debit card. You should receive your permanent debit card and account paperwork in the mail within a few days after opening. If you open an account online, you’ll have to wait for your debit card to come in the mail.
How Much Does It Cost to Open a Checking Account?
Banks typically don’t charge fees to open a checking account. However if the bank requires a minimum deposit, you’ll need that money when you open. The required deposit can be at little as $25 or as high as a few hundred dollars for more premium accounts. You can find out the minimum deposit by checking the bank’s website or contacting your branch directly.
Credit unions work differently than banks, in that all account holders own shares in the union. To open an account, you have to buy a share in the credit union. While this might sound scary, the cost is usually between $5 and $25. That deposit gets to stay in your checking account, too, as long as you have the account.
What to Do After Opening a Checking Account
After your checking account is open, start by activating your debit card and enrolling in online or mobile banking. This gives you easy access to your account so you can check your balance, track spending, and manage payments from your phone or computer. It’s also a good idea to create a strong password and turn on added security features like two-step verification to keep your information safe.
Setting up direct deposit is another useful step. With direct deposit, your paycheck or other income goes straight into your account, which can help you access your money faster and avoid unnecessary trips to the bank. You can also use your new account to schedule automatic payments for bills, which helps you stay current on expenses and avoid missed due dates.
Think about how to organize your account based on your financial goals. For example, if you’re focused on avoiding fees, set up alerts to monitor your balance and transactions. If you want to manage your budget more closely, use your bank’s tools to track spending habits. And if saving is a priority, connect your checking account to a savings account and schedule automatic transfers. Setting up your account with these goals in mind can make daily money management simpler and more effective.
Bottom Line
Opening a checking account, especially for the first time, can be a financial game changer. It offers a safe place to keep your cash and an easy way to use that money virtually anywhere. Luckily, it’s easy to open a checking account both online and in person at a bank or credit union. Make sure you have the necessary information, like your driver’s license, and enough money to make your initial deposit.
Tips for Managing Your Money
- If you find yourself struggling to manage your money on your own, a financial advisor can help you create a financial plan. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- Owning a checking account is a step in the right direction when it comes to managing your money. It allows you to keep better track of your spending, making for a better budgeting system than just keeping cash in a jar.
- Part of your budget should include some sort of savings, especially retirement savings. It’s never too early to start saving for retirement. Plus, once you have a checking account, opening an accompanying savings account is just as easy.
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