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What things should you take into consideration when creating a bank account?

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6 answers

Kim’s Answer

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Wow, what a complex question!

First, I would learn about credit unions, and decide if I want a bank account or credit union account. I am pretty biased, as I have been with a credit union forever ( 40 yrs), and have been pretty happy with them. That does not mean banks are bad!


Features I would look for, in no particular order:

  1. interest rates charged for loans, and paid for deposits. Compare to others. Rates should be on line.
  2. Full service: do they handle car loans, student loans, housing loans, credit cards?
  3. Overdraft protection: if you manage to overspend on your account, will they return the check as unpayable, or, if you have funds in savings, will they transfer the money to cover the check? What if you don't have enough? Will they cover you anyway? How much will they charge for this extra convenience? Don't be embarrassed to ask this question. It's not that you are planning on needing this feature, however, mistakes happen to the best of us!!
  4. Do they have an automatic bill payment feature so you can set your other bills up to be paid automatically, and, if so, is there a charge?
  5. Limits on number of transfers between accounts, and any other features.

Beyond that, you want to think about who, if anyone, you want to allow to have access to your account, and under what conditions. If you were to get incapacitated, say, medically, or be stranded halfway across the country, is there someone you trust to access your account in those situations? Do you also trust them to NOT go snooping into your affairs just because they can if they want to?


When you open an account, they want proof of identification and ask some pretty strange questions. They will want to know what to do with your account in the event of your death. Not something most young folks think about, I know! Something to think about!


It's much more difficult to handle finances than it was years ago, because so much is done on credit, and credit is too too easy to spend! Please be careful, try to budget, and get help when needed!


Best of luck!

Kim

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Amit’s Answer

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Hi Alicia,


Great question. There are so many options out there when it comes to choosing a bank account, the task can appear daunting. You should consider a few things when researching banks and bank accounts.


  • Look for banks that do not charge monthly fees on your checking/savings account, these monthly fees will eat away at your balance without providing a big benefit.
  • If you frequent ATMs for cash, you should find a bank that has many ATM locations in your area, or one that reimburses you for third party ATM fees.
  • Also think about if it is important for you to have access to mobile banking, because not all banks offer that service with accounts.

Hope this helps.

Amit

Amit - Thank you for your answer. We need more advice like this, now more than ever! There are more than 1k unanswered questions on CV right now. Hoping you'll answer a few more this week! Jordan Rivera COACH Translate
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Cathleen’s Answer

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HI Alicia, What a great future you have in front of you!

For many students this is their first account. I recommend that you find a bank that:
- has a branch close to your college and your home, so you can access it during school and on breaks.
- has a student account that has no minimum balance requirement and free ATM access

You will want to sign up for online banking and for an ATM card.

You can order your checks through the bank. Sometimes these are expensive, so you can also choose to order them through an online vendor to save money. Just be sure it is a reputable vendor, since you are sharing your account information. My kids did not order checks at first because they used Venmo and their ATM card for everything. They did find a couple of instances where they needed to write a check and ended up ordering some.

You should look at your online banking every day. If you see a transaction that you are unsure of, call the bank to investigate. Fraud does happen and catching it quickly frequently enables the bank to get your money back.

Try not to spend money if you do not have it in the bank. Overdraft fees get very expensive for college students. Be careful with your budget. If you need to, work a small part time job. My daughters found jobs at the school that worked well with their class schedule. It earns you money to deposit in the bank to cover your needs and you also have less time to spend it!

This is an exciting time for you. And you are asking the right questions. Wishing you the best of luck!



Cathleen recommends the following next steps:

  • Find banks near school and home.
  • Review for a checking account that has no fees and provides free ATM access.
  • Open account. Sign up for online banking, mobile banking and ATM card access.
  • Set up Venmo account.
  • Have a great experience in college
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Katya’s Answer

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hi Alicia, before opening an account I would recommend to look for these items:

1) How would you prefer to bank- digitally or in the banking center
2) what is the purpose of the account- daily spending or saving for the future
3) how much minimum are you planning to keep in your bank account-mits always important to review the monthly disclosures for certain types of account and understand how the monthly fees work. because a lot of times- if you keep below your daily average balance- the bank will change a monthly fee- which is unnecessary fee to pay
4) what are the banks mobile and online banking features- do they have seller, do they do wires, do they have a free credit score review, how is their daily alert system works,do they have an option to chat with the representative, do they block your debit card online in case you are traveling and your card was lost
5) how many transactions doe you plan to do on monthly basis
6) is there an option for direct deposit- in order for you to avoid the monthly fee

if you are interested in the saving account-what is the interest rate, how is it compounded daily or monthly, what is the minimum balance

it all depends on which type of account you are interested in- checking, saving, student accounts are also available in some financial institution which is a great option to take advantage of while you are in school to make sure that you are safe and utilizing all the benefits.
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Angel’s Answer

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Hi Alicia,

There are many things to keep in mind when opening a new bank account. One thing that people look for is convenience. There are a lot of banks that are switching to mobile/online banking. The other thing to recognize, is what you are trying to do. Are you a high school student? College student? Freshly Graduated? All of these things will help you pick a bank that will help you set up your goals for the future... Time to start thinking about 401(k)s, credit cards, etc.

There are many benefits to each bank, just make sure they align with your personal goals.
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Mikayla’s Answer

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Hi Alicia,

There are many things to keep in mind when opening a new bank account. You can find reviews for nearly any bank online. You'll want to look into interest rates, locations, whether they're FDIC insured (they should be), minimum balances, etc. Additionally, you may be able to get a reward for opening an account with a specific bank (you can google this).

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