What Are the Best Tips for Opening a Bank Account?

Geri Terzo

Sometimes, the safest and most practical way to handle money is to put it into the hands of a financial institution that accepts deposits. Opening a bank account, whether for savings or checking, is a common way to manage money. Typically, selecting a banking institution with locations that are near where an account holder lives or works is practical. In some cases, however, an online account may be best. For a checking account, selecting a bank with the lowest minimum balance requirements or fewest fees is possible, while the savings account with the most attractive interest rates will deliver the highest returns.

Many free checking accounts require that the account holder maintain a minimum balance.
Many free checking accounts require that the account holder maintain a minimum balance.

When opening a bank account, the types of fees that might be assessed along the way should be examined. For instance, it may be possible to open a particular type of account that is most appropriate for the transactions that are likely to occur and that a bank rewards. A bank might charge fees to checking account holders who continue to receive paper statements. For those customers who agree to keep banking transactions electronic, however, any fees might be withheld. A customer opening an electronic account may not have access to the convenience of turning to live bank tellers for deposits or withdrawals.

When opening a savings account, select one that pays the highest interest rate on money deposited.
When opening a savings account, select one that pays the highest interest rate on money deposited.

Customers who use a checking account for the most basic of services, including making deposits, withdrawals, and writing checks should open a bank account with a provider that does not charge ancillary fees. For instance, some financial institutions may apply a fee after a certain number of checks have been written. Even if customers are not earning interest on the money in this type of account, at least there are no unnecessary and frequent charges being issued. Also, to avoid further charges, individuals might avoid opening a bank account with a firm that requires customers to maintain minimum balances.

Checking bank statements online can help people stay on top of their spending.
Checking bank statements online can help people stay on top of their spending.

Opening a bank account with an Internet provider has benefits but also some drawbacks. Customers might be able to earn higher yields by investing in an online savings account versus selecting a brick-and-mortar bank. Along with higher interest rates, however, an online bank might have a hefty minimum balance requirement or charge fees that can be avoided by selecting a more traditional financial institution. Small investors who are investing in the financial markets might also be able to open checking or savings accounts with the same firm. When investing in the stock market, an individual can avoid the minimum investment requirement sometimes by also opening a bank account at the brokerage.

When selecting a bank, it's important to ensure that the institution is FDIC insured.
When selecting a bank, it's important to ensure that the institution is FDIC insured.
Some online-only banks advertise lower rates and better interest earnings than conventional banks.
Some online-only banks advertise lower rates and better interest earnings than conventional banks.

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