Checking Accounts for Beginners

How to open a checking account for the first time:

• Bring a check you want to deposit or cash you will be depositing into the bank account to start off.
• It’s important to note that you want to at least maintain a $1,500 balance (typically, this can vary by bank sometimes) or have a direct deposit setup up in order to avoid monthly fees on your checking account. This is essentially a universal practice by most physical banks. If you do not meet the minimum deposit requirement or have a direct deposit setup you will typically have to pay a $10-$15 monthly fee in order to maintain servicing of the checking account. However, some online banks do not have a minimum balance requirement.
• Bring all applicable legal documentation: Social security card, State driver’s license, any other combination of identity verification, etc.
• Sign the paperwork and you will be issued your debit card for the checking account.

Things You Want to Be Aware of When Opening Your First Checking Account:

• Many banking institutions offer promotional offers for opening a new checking account. Take advantage of these if possible! These offers can include a $200 bonus when you deposit $1,500, etc. These promotional offers vary throughout the year but it is essentially free money so much sure to make use of them! However, don’t forget that you will have to make note of the bonus and any interest accrued in the following tax year.
• You probably do not need Overdraft protection. Just make sure you have enough funds for settlement, whenever you are sending an ACH or making a withdrawal.

How to Compare Checking Accounts:

Don’t get too caught up on your APY for the checking account. The differences between APY’s on various checking accounts is usually nominal at best. For many consumers it’s more important to have a convenient bank that provides them with a valued service. With this being said, it’s in your best interest to choose the most convenient bank that also offers a great initial promotion. If you are opening an account that gives a $250 bonus and only depositing $1,500, you are essentially receiving an initial APY bonus of 16.6%. This will almost always outweigh the benefits of a checking account with an APY that is 0.4% as opposed to 0.3%, even in the long term.

Finally, you might want to evaluate other things like applicable out of network ATM fees and accessibility and convenience with regards to your style of banking. If you do a lot of Zelle transfers and online banking make sure that your checking account supports that! In my professional opinion, the last thing you want to do is compromise on banking convenience for a couple basis points in interest.