To store your money in a secure place like a bank, you need to open an account in your name. Opening such an account online or offline requires certain documentation and formalities are needed to be fulfilled.
Some documents you might need include a government-issued ID among other personal details. That’s why some banks also ask for an initial minimum deposit to open an account.
Checking account v/s Savings account
Savings account
Objectives of opening a savings account
- Store money for contingency
- Save money to fulfill some goals
The ideal savings account would have
- Zero or low monthly fee
- Interest rates that are high, mostly at par or above 0.40%
Checking account
Objectives of opening a checking account
- Writing checks
- Pay monthly or yearly bills
- Buying things with debit cards
The ideal checking account would have
- Zero or no monthly fee
- Wide ATM network
- The overdraft fee is zero or negligible
Elaboration of the documents that are needed
The formalities needed for both savings and checking accounts are alike in most aspects and include the following.
- Government-issued IDs include passports, driver’s licenses, etc. If you don’t have a license you can get a State ID at the DMV.
- Minors that are under the age of 18 need a co-owner. This can be a parent or guardian.
- The basic personal information like name, date of birth, address, Social Security Number, phone number, taxpayer identification number, etc.
- Initial deposit if the bank obligates you to submit.
- Details of other members for identification and verification purposes are also needed in case it’s a joint account.
Opening a new account: What happens next?
Opening a new account is a rapid process. In most cases, banks will open your account within a short period of 15 minutes. Some banks require a minimal fee of $10- $100 as a deposit. Many others don’t. That’s why a person with an existing account in another bank can transfer the money to the new one without any hassle if needed.
Consider these before closing your account
It can be hard to manage multiple bank accounts, and in such cases, it is a better option to close the account you utilize less or give your lesser benefits. If you want to close your account at a bank, here are some things that you need to know.
- Direct deposit: Tell your employer about your new account and give the details
- Paying bills: If the bills are automated, cancel the transactions through the application. Remove the old bank details and add the new one.
- Application, automated texts: Delete the mobile application for the old account, turn off notification. Download the mobile application of the new bank, and manage your notification as per discretion.
- What to do with checks?: Incinerate or destroy checks from the old account. That way, they cannot be misused.
- Recurring transactions: Update your information on all the payment platforms like Venmo, Paypal, etc.
- Safe-deposit: If you have a safe deposit box, collect your items and check your rental agreements for any obligations.
- Get a written notice: This step is crucial because some banks reopen closed accounts for bills payment. That leaves you clueless about what to do. That’s why it is important to get a written letter for closing the account.
