Opening a checking account is almost a basic process for everyone nowadays. It is a very simple process that can be completed through the financial institution’s website or its physical office. People open checking accounts for various reason, including keeping their money in a safer place, making it easier to make payments, or to build their credit score. A checking account is very liquid, and it allows you to deposit or withdraw money easily using ATMs, electronic debits, and checks, among other means. But even though it may seem very easy to open a checking account, there are several things you should know before opening it. Some of them are discussed below.
What you should know before opening a checking account
1. The type of checking account to open
There are different types of checking accounts including a basic checking account, free checking account, NOW accounts, super NOW accounts, interest-bearing accounts, joint-checking account, express checking account, lifeline checking account, and student checking account, among others. You should analyze the features of these types of checking accounts and select the one that suits your needs. You have to select an account based on the amount you intend to save and the kind of transactions you will be doing.
2. Fees charged
Each checking account has different fees for various services. For example, some accounts have monthly maintenance fee while others are free. Be sure to check all charges including overdraft and service fees. Shop around to find an account that offers the best prices. Understanding these charges will also help you find ways of avoiding them once you open the account.
3. Online and offline services
With modern technology such as the internet, it only makes sense if your potential bank can allow you to open a free checking account online for easier transactions and checking status of your account. You should also be sure on how you will be authorized to access your money, such as by use ATMs, credit cards (cashless banking) and electronic money transfer.
4. Insured or not?
Before opening a checking account, you must choose a bank. Select a bank that is insured so as to protect your savings or investment.
5. Eligibility
It is also important to check the requirements for opening a checking account. This includes necessary documents, age, and minimum deposit amount, among others. Most banks will need you to present your identification document (ID or driver’s license) and social security card. Remember that some checking accounts are only targeted for specific groups of people so be sure to check the eligibility of the account you are planning to open.