Have you finally decided to open a bank account? If yes, there are certain things you must note. First off, you must understand that opening a bank account is not child’s play. You cannot simply walk into a bank and tell the cashier or bank manager that you want to open a bank account. To open a bank account, there are certain requirements that you need to meet.
The requirements for opening a commercial bank account are: a valid government-issued photo ID, your birthdate, Social Security Number or Taxpayer Identification Number, or Phone Number, an initial deposit (not all banks requires this).
Opening a bank account becomes relatively easy when you know the process, including the requirements. Below, I have noted a few things before opening a bank account, including the requirements.
Why Commercial Banks Are Regulated?
Commercial Bank Account Opening Requirements:
Let’s begin with the things you need to open a bank account (requirements). Afterward, we’ll move to the various types of bank accounts and then round up with what you need to know before opening a bank account.
What Do You Need to Open a Bank Account?
There are a few ways to open a bank account. You can open one online or at a branch if the bank offers brick-and-mortar locations. The information you’ll be asked to provide will be similar whether you are opening a checking account, a savings account, or both. Here is a list of the things you’ll need to open your new bank account:
- A valid government-issued photo ID, like a driver’s license or a passport. Non drivers can obtain a state ID card at the Department of Motor Vehicle office.
- Other basic information, like your birthdate, Social Security number, taxpayer identification number, or phone number.
- An initial deposit is needed by some banks, too. Thus, it makes sense to do a little research (in this regard) before visiting the bank to open an account. Depending on your circumstances, you might need other items, too.
- Identification details for other applicants if you are opening a joint account: Because the account will be owned by multiple individuals, the bank will want all owner’s identification and personal information.
- A co-owner if you aren’t up to 18. Ask a parent or legal guardian to sign legal documents with the bank.
What Kind of Account Should You Open?
Ok, so you have made up your mind to open a bank account. You have selected the bank you wish to open an account with, but you are yet to determine the kind of account to open. If you find yourself in this situation, don’t fret, I will take you through the major type of bank accounts that exist. In the end, you should be able to decide which to open.
Traditional banks, online banks, including credit unions can offer diverse account options. The list can include:
- Savings accounts
- Money market accounts
- Certificates of deposits
- Checking accounts
Thinking about what you need to manage your money can help you determine which kind of bank account to open. Also, it helps to compare the features of each account option before making the big decisions on which to open. Let’s look at the three major types of accounts.
Checking Vs. Savings Vs. Money Market Account
Checking accounts, savings accounts, and money market accounts all have one major thing in common: they are all deposit accounts. While these accounts share some similarities, they work differently and don’t often share the same features and benefits.
A checking account, for instance, is designed for depositing money that you’ll use to settle bills or cover day-to-day expenses with a linked debit card or via writing checks. Some checking accounts earn interest or offer rewards, but that is usually not the primary purpose of having a checking account. Savings accounts and money market accounts also can earn interest, and both are designed to retain the money you don’t plan to spend immediately.
For instance, you may use a savings account for your emergency fund, or you could save money toward a down payment on a home in a money market account. Some money market accounts offer debit cards or check-writing features. Both money market accounts and savings accounts have been bound by federal rules regarding the number of withdrawals you can make every month. Checking account isn’t subject to these rules, although the bank or credit union may set limits on withdrawals.
Importance of Banking System in the Economy
What to Expect When You Open Your New Account?
Opening a bank account may seem difficult from afar. However, the truth is that opening a bank account is something you can do relatively quickly, either online or at a bank or credit union branch.
Generally, you can expect the bank to request that you fill out an application form for a new account—that is often the first step. From there, you’ll need to confirm your identity and provide any other information the bank asks for, like your address or phone number.
If the bank asks for a minimum deposit, you’ll have to make that deposit when you open your new account. If you are opening an account online or making your first deposit using an ACH transfer from another bank, you would need to give the new bank your routing number and account number to finish the transfer.
Some banks require extra verification before you can start using your new account if you are linking it to an account at another bank or credit union. For instance, the bank may make one or two small test deposits into your new account. You will have to confirm these amounts to authenticate your account, which can take some days.
