Banks can be intimidating to some people, but taking advantage of their services is one of the best things you can do for your financial well-being. Whether you’re just out of school and making money for the first time or haven’t had to open an account in years and need a refresher, every person who has an income needs a bank account to manage their funds and help reach their financial goals.
We’ll cover the basics of starting a bank account, highlighting the benefits and providing some tips along the way. From accessibility to security, there isn’t a better way to manage your money.
Why Does Everyone Need a Bank Account?
Security – Of the many benefits of having a checking or savings account, safety is the most significant. Storing large amounts of cash at home is dangerous in its own right, but banks offer many advantages besides just having a vault. Identity fraud protection and suspicious transactions are usually monitored by lenders and will keep you protected from theft. As payment methods have gone electronic, banks have increased their security protocols to keep consumers safe.
Convenience – Electronic payments have made paying for goods and services speedy and straightforward. Direct deposits, as well as deposits made at windows or ATM’s, are available almost instantly with a debit card. You can also make purchases worldwide and access your money at any time with an ATM.
With online banking, keeping track of your finances is a breeze. You’ll have access to every transaction you’ve made, and in many cases, a full breakdown of where your money is going. This will help you curate a monthly budget and help you grow your savings.
Checking vs. Savings
The biggest question most newcomers have is: what’s the difference between checking and savings accounts?
Checking accounts always have a debit card attached to them and is the primary way to access your funds – although some people still use paper checks for bills or large purchases. Many new checking accounts don’t even come with paper checks!
Savings accounts are similar, but the ultimate goal is to make the funds less accessible. Some savings accounts will allow a card to be attached, but typically transferring money from savings to checking is the easiest way to access your account. Savings accounts are crucial to controlling the amount of money you spend each month and can grow rapidly with proper management.
How to Open an Account
Opening a bank account is simple and, in many instances, can be done entirely online. You’ll need a few documents such as a driver’s license and social security card, as well as an initial deposit amount. Every bank’s minimum deposit is different, typically ranging from $25 to $500. Look for free accounts with no maintenance fees when first starting, as many of the benefits of premium accounts won’t appeal to those just beginning.
After filling out and signing some forms, you’ll be all set! With your account and routing numbers, your employer should be able to handle any direct deposit paperwork so you can start getting your paycheck instantly on payday, without the need to pay a check-cashing fee.
Some banks can issue debit cards on the same day, but more commonly, they’ll arrive a few days later in the mail. After you receive your PIN, you can change it or keep the issued number and begin making purchases with a swipe or tap.
With all of the benefits of bank accounts, it’s safe to finally smash the piggy bank and secure your money correctly. Checking accounts make purchases fast, and tracking your spending a breeze. And even with just a minimum deposit, opening a savings account at the same time will provide motivation to save spare change in case of an emergency. Start managing your money the smart way by opening a bank account today!