Opening Accounts at a Bank or Credit Union
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Opening Accounts at a Bank or Credit Union
Opening a checking or savings account is a simple process. Once you have selected the financial institution you want to build a relationship with, make a visit to a convenient branch and meet with a personal banker or customer service representative to open your account(s).
Things To Know
- It is important to understand the difference between a debit card and a credit card.
Steps in the process for opening your account include the following:
- Determine the type of account. What type of account do you want to open? There is checking for your day-to-day transactions, and savings for money you are putting away for short to intermediate goals.
- Account titling. If you are 18 or older you can open the account just in your name. If you are under the age of 18 you will most likely need to open a joint account with a parent, legal guardian or other adult (co-owner). Be sure this is someone responsible and someone you can trust. Having a joint account allows both you and the other individual to perform transactions on the account. Once you reach the age of 18, you can retitle the account in just your name.
- Identification. You must provide two forms of ID when you open the account. If it is joint with someone else, they will need to provide two forms of ID also. Your primary form of ID must be a photo ID like a driver’s license or passport. If you don’t have either of these but the joint account owner does, you may be able to use a different form of ID. You will also need to provide a secondary form of ID like a student or work ID. You will then need to provide basic information like date of birth, Social Security number, address and employer.
- Opening deposit. Be sure to bring cash or a check to deposit to open the account. Most banks require a minimum opening deposit of $25 or $50 to get the account started. If you deposit a check you will not have access to the funds until the check clears (the bank receives the money from the bank the check is from).
- ATM card. If you are under age 18 you will have the option of being issued an ATM card. ATM cards allow you to access money through ATM machines as well as perform other basic transactions like transferring money from your checking to your savings account or making a deposit to your account. You will be issued a personal identification number (PIN) with your ATM card. This PIN allows you to access your accounts at an ATM and should be kept confidential. Anyone who knows the PIN could access your accounts if they have your ATM card.
- Check card. If you are age 18 or older you have the option of being issued a check card (also known as a debit card.) Check cards can be used at an ATM to withdraw, deposit, or transfer money but also can be used as a debit card when making purchases at most retail stores. When you use your check card to make a purchase, the funds are automatically withdrawn from your checking account to pay for the purchase.
Like ATM cards, you will be assigned a PIN with your check card. When using your check card to purchase items at a retailer, you have two options for how you process the transaction. You can choose to process your transaction as debit or credit. If you choose debit, you will enter your PIN to process the transaction and funds will be deducted from your checking account immediately. You will have an option of getting cash back too rather than going to an ATM.
If your debit card has a credit card logo on the front (VISA, MasterCard) you can choose the option of processing the transaction as credit. If you do choose credit, the funds will still be automatically deducted from your checking account, but it could be 2–3 days before they are deducted. Be sure to check your account balance before making additional purchases to see if the transaction was processed. If the transaction has not been processed, your account balance is overstated.
Debit vs. credit cards
It is important to understand the difference between a debit card and a credit card. While they may appear similar they are very different. With a debit card your funds are automatically deducted from your checking account. With a credit card you are billed for all of the purchases you made in a month. When you receive your bill you are responsible for making a payment for some or all of the balance outstanding. If you don’t pay the entire balance, you will be charged interest, typically at an average rate of 18–24% annually.
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