![How to open a Best bank account 2023](https://dailycatalog.in/wp-content/uploads/2023/01/How-to-open-a-Best-bank-account-2023-782x521.jpg)
How to open a bank account
When you’ve finally selected the best bank account or credit union account for you, the next step is to open the account. Follow these steps:
![How to open a Best bank account 2023](http://dailycatalog.in/wp-content/uploads/2023/01/How-to-open-a-Best-bank-account-2023.jpg)
How to open a Best bank account 2023
- Gather the important information and paperwork: You’ll need the following to open a bank or credit union account:
a. Full name
b. Address
c. Date of birth
d. Social Security number or tax ID number
e. Driver’s license or passport - Fill out the application form: Most banks and credit unions should have an online application form that you can fill out. If your bank or credit union has a branch, you can also visit it if you prefer to deal with a live person. You may need to print, sign, and mail your application form to the bank if it does not give you an option to submit online.
- Fund your account: Your bank or credit union should provide you with information on how to fund your account once you’ve set it up. Usually, you have the following choices:
a. Deposit cash
b. Deposit a check or money order
c. Set up direct deposit with your employer
d. Transfer money from another bank
Here are some specific guides we created for opening a bank account in different situations:
- With someone else: How to Open a Joint Bank Account
- For a child: How to Open a Bank Account for a Minor
- For a business: How to Open a Bank Account for a Business
What to look for in a bank or credit union
Once you’ve identified the type of financial institution you’re interested in, it’s time to dig into the details. Here are a few things you should look into, regardless of your account type:
- FDIC or NCUA insurance: You’ll probably never need FDIC or NCUA insurance, but if you do, you’ll really need it, so make sure that your bank account or credit union has it before you sign up. Most state their member ID number on the footer of their website. You can also contact the bank or credit union if you’re unsure, but most should have the applicable type of insurance.
- Access to funds: Your access to funds will vary depending on the type of account you choose. Focus on the factors that matter most to you:
- Branch locations: Banks and credit unions usually have branch locator tools on their website so you can track down the one nearest to you.
- ATM network: Your bank or credit union may have an ATM network or it may partner with a company like Allpoint or MoneyPass® that offers a nationwide surcharge-free ATM network. Some bank account don’t have any fee-free ATMs at all, but they reimburse you for ATM fees you incur.
- Debit card: All checking accounts should come with a debit card and some money market accounts will as well.
- Checks: Checks are available with checking and money market accounts.
- Online tools: Most banks and many credit unions offer online accounts where you can view your transaction history, pay bills, transfer funds, and more. Some also have mobile apps where you can do all the same things, plus remotely deposit checks.
- Interest rates: Look at the APYs your bank or credit union offers on the type of account you’re interested in and compare this to some of its competitors. Note that some financial institutions employ a tiered system where you earn a higher interest rate for having a larger balance. If this is the case, figure out what kind of interest rate you can realistically expect based on how much you plan to keep in this account. You should also look into how its interest rates on loans stack up against competitors if you think you might ever take out a loan from the bank or credit union.
- Other product offerings: You may only be looking for a checking or savings account now, but in the future you might need to buy a home or start a business and then you’ll need a mortgage or a business loan. Anticipating your future needs and choosing a bank or credit union that can accommodate them can prevent you from having to jump ship as your needs change.
- Fees: Check the fee schedule for the type of account you plan to open. Contact the bank account or credit union if you are unable to find this information on its website or if you have any questions about its fees. Read through it all carefully and make sure you understand what you’re getting into. Common fees to watch for include:
- Monthly maintenance fee: This is the fee you pay to own the account. Some bank account or credit unions enable you to waive this if you meet certain criteria.
- Overdraft fees: You’ll only have to worry about these if you opt into overdraft protection and withdraw more money from your account than it contains.
- Minimum balance fee: If you drop below the account’s designated minimum balance, you might pay a fee until you get your balance back up again.
- Statement fee: Those still getting paper bank account statements might owe a fee unless they switch to eStatements.
- Inactivity fee: Not using your account enough could result in additional fees. Check with your bank account or credit union if you’re unsure of how to avoid this fee.
- Card replacement fee: Some bank account charge you for a replacement debit card if your first one is lost or stolen.
- Minimum balance: Many bank account and credit unions require a minimum initial deposit to open your account and they may have ongoing minimum balance requirements you must meet to avoid fees. The requirements will vary by institution and account type. Make sure you’re comfortable with these before you sign up or you could cost yourself money.
- Sign-up bonus: An increasing number of bank account and credit unions are offering special sign-up bonuses like credit cards do to entice new customers. This could be the deciding factor between two similar bank accounts, but don’t base your decision on a sign-up bonus alone.
- Customer service: Look into how you can contact the bank account or credit union if you have questions or problems with your account. Check into its customer service hours as well. Some national banks have 24/7 customer support while smaller regional banks and credit unions may only operate during normal business hours.
Choosing the right type of bank account
Most banks and credit unions enable you to place your money in:
- A checking account
- A savings account
- A CD
- An MMA
Let’s look at the pros and cons of each.
![bank account](http://dailycatalog.in/wp-content/uploads/2023/01/type-of-bank-account.jpg)
bank account
What is a checking account?
Best for: Those who want a safe place to keep their money with few restrictions on accessing it.
Not for: Those who want to earn a lot of interest on their money.
You should open a checking account for money you plan to use for everyday spending. Unlike savings accounts, CDs, and money market accounts, there are no restrictions on when or how often you can withdraw money from a checking account, as long as you don’t withdraw more money than you have. They’re ideal for paying bills and you can easily turn your checking account funds back into cash as needed with the included debit card. You can also purchase checks for your checking account if you prefer to pay this way.
While some online checking accounts offer interest, these accounts are rare, and even the best interest-bearing checking accounts usually have annual percentage yields (APYs) lower than most savings account APYs. If you’re hoping to grow your money, you’re better off using one of the other bank accounts listed below.
Some checking accounts charge a monthly maintenance fee, but they might waive this if you meet certain requirements, like having a certain number of deposits per month or maintaining a minimum balance. Other fees you might run into with checking accounts are ATM fees for using ATMs outside of your bank account or credit union’s network or overdraft fees if you try to withdraw more money from your checking account than it contains.
Read Also : How to Choose a Best Banks 2022-2023
What is a savings account?
Best for: Those who want a low-risk way to grow their money.
Not for: Those who plan to withdraw money frequently from their account.
A savings account is a low-risk account where you can earn interest on your money. Banks and credit unions take the money you place into your savings account and use it to finance loans for other customers. Then, they give you a portion of the interest they earn from the borrower. The average savings account APY is 0.09%, but some high-yield savings accounts offer APYs in excess of 2%. A higher APY will help your savings grow more quickly.
While you can technically keep the money in your savings account indefinitely, savings accounts are best for money you plan to use in the next three to five years. Invest longer-term savings if you hope to beat inflation and actually increase your wealth over time.
A savings account isn’t the best choice if you expect to withdraw cash from your accounts often. That’s because it’s subject to Regulation D. This is a federal law that restricts savings account holders to six “convenient” withdrawals or transfers per month. Convenient transactions include transfers made online or over the phone, bill payments or other recurring transfers, and overdraft transfers.
If you have more than six of these per month, your bank account or credit union will charge you extra fees. You can still make additional “inconvenient” withdrawals, though, including visiting a branch location if your financial institution has them or requesting a mailed check from your bank account.
Savings accounts don’t usually include checks or debit cards for accessing funds. You may need to transfer funds to a checking account before you can withdraw the money via check or debit card payment. You also need to be mindful of the account’s minimum balance requirement. If it has one and you let your balance fall below that level, you might incur additional fees.
If you’re looking for a savings account, here’s our list of the best savings accounts.
What is a certificate of deposit (CD)?
Best for: Those who want to earn a high interest rate and don’t need to spend that money anytime soon.
![certificate of deposit](http://dailycatalog.in/wp-content/uploads/2023/01/certificate-of-deposit.jpg)
certificate of deposit
Not for: Those who think they’ll need to withdraw their money before the CD’s maturity date
A certificate of deposit (CD), also known as a share certificate if you’re using a credit union, is a special type of savings account that offers much higher interest rates — but there’s a catch. When you put the money into a CD, you’re agreeing that you won’t touch it for the length of the CD term. This can be anywhere from a few months to several years. Usually, the longer the loan term, the higher the interest rate. The best CDs can offer APYs of around 3%.
You can withdraw money from your account before it reaches its maturity date (the end of the CD term), but you’ll pay a high penalty. This is often a certain number of months’ worth of interest, and the farther away you are from your maturity date, the greater the penalty. A few CDs, known as no-penalty CDs, do not charge you if you withdraw your money early, but these usually have lower APYs than other types of CDs.
CD laddering is a popular strategy that lets you take advantage of the higher APYs offered by longer-term CDs’ while still giving you access to some of your funds every year. You start by investing your money into CDs with consecutive annual maturities — for example, a one-year, a two-year, a three-year, a four-year, and a five-year CD. When the one-year CD matures, you roll those funds into a new five-year CD. The next year, the two-year CD will mature and you put this into a new five-year CD as well, and so on. Every year, another CD will mature and you can withdraw the money if you decide or put it into a new one to keep growing your money.
Looking for a CD? Check out our list of the best CDs available now.
What is a money market account?
Best for: Those who want to earn a high interest rate without sacrificing their easy access to their money.
Not for: Those with small savings who cannot meet the minimum balance requirements.
Money market accounts have features of all three of the bank accounts listed above. They keep your money fairly liquid, like checking and savings accounts, and they come with checks so you can withdraw money directly from the money market account. Some may also provide debit cards so you can withdraw money at ATMs or use your money market account to make purchases at stores or online.
Their APYs are often higher than savings accounts, in some cases they’re in excess of 2%, so they’re a wise choice if you hope to grow your money more quickly without tying it up in a CD for years at a time. But that’s not to say they’re without restrictions.
Money market accounts are also subject to Regulation D, like savings accounts, so you’re limited to six online or phone transfers and withdrawals per month. Checks also count toward your six convenient withdrawals per month, but ATM withdrawals do not. Another thing that may discourage some people from choosing an MMA is that these accounts usually have a much higher minimum balance than savings accounts, sometimes up to $5,000. Those without much money in their name may not be able to open one.
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