Opening your first bank account will provide for a number of conveniences. With a debit card, you can stop paying for everything in cash. You’ll be able to accept direct deposits and pay bills from your checking account. Additionally, if you are opening a savings account, you can earn interest on your money.
Today, technology has made opening a bank account easy! Plus, new products like LendingClub Bank’s Rewards Checking Account allows you to get the best of both a checking and savings account in one!
Bank accounts can be opened online or in person. There are a few documents you’ll need and features you’ll want to have, which we’ll cover below.
Here’s what you need to know about selecting your first bank and opening your first bank account.
Whether you are opening an account online or in person, you’ll need a photo ID. This is often a driver’s license. If you don’t have one or do not drive, a state ID will work. A passport can also be used. You’ll need your social security number and date of birth as well.
Additionally, you’ll need your contact information such as mailing address, email address and phone number.
If you are a minor, the account will most likely need to be opened with a co-applicant. In addition to your information, the co-applicant’s information will be required.
Don’t be overwhelmed by this process. It takes minutes. LendingClub Bank advertises that it takes just 5 minutes to open an account.
Features To Look For In A Bank Account
There are a number of features you’ll want to make sure are available, depending on the account type you’re opening. Savings accounts are the simplest. Most do not charge any fees or require minimum deposits.
Shopping around for the best interest rate can pay off. It can mean the difference between a sub 1% interest rate up to near 2%. You’ll likely be required to deposit a minimum amount to open the account but should be able to withdraw it after that if needed. Check with the bank first.
For checking accounts, look out for fees. Avoiding them isn’t straightforward and can depend on your daily balance, transactions per month, external bank transfers, and other activities.
A minimum deposit will probably be required to open a checking account. This can range from $100 to a few $1000. The account may be required to maintain a minimum balance to avoid any fees.
Debit cards are common among savings and checking accounts. You can use them for purchases and ATM withdrawals.
A debit card should be a free feature offered by the bank. There may be a limited number of transactions before any fee kicks in. This can include purchases and ATM use.
Speaking of ATMs, check that you have access to an ATM locally and that they are available in areas that you travel. You’re looking for in-network ATMs. These are ATMs branded by the bank or partner ATMs, which won’t charge a fee.
Out-of-network ATMs do charge a fee. With the bank’s mobile app, you should be able to use its ATM locator and have it distinguish between in-network vs. out-of-network ATMs. Some banks may not have an ATM network. In those cases, they usually partner with other banks to provide limited no-fee use of their ATMs.
Most banks will not issue a stack of paper checks for new checking accounts. Instead, you can receive a handful of temporary checks. This shouldn’t really be a problem given how little paper checks are used. But if you need them, you can purchase a few hundred basic paper checks from the bank for around $20 - $30. Plus, who really needs checks anymore?
With online BillPay, you can send paper checks to people who need them (maybe a landlord, or reimbursing a friend)? Or, you can use online services like Venmo or Zelle to send money.
Another area you’ll want to look out for is overdraft fees. This happens when money is pulled from your account but the money is not actually available to cover the transaction. This can incur a $30 or more fee. Banks offer a service called overdraft protection, which can pull money from a savings account or credit card. Overdraft services usually don’t cost anything. Inquire with the bank about any overdraft services to make sure they don’t charge a fee.
Which Bank Has The Best Features?
Right now, we’re huge fans of LendingClub Bank. Their rewards checking account has the best features of a savings account (i.e. high interest) combined into their checking account. Plus, they have a no monthly fees or minimum balance requirements, and you can open your account online in less than 5 minutes without digging through your wallet for your license.
They also check off a lot of other features we think you need - free ATM fees worldwide, a great mobile app, online check deposit, and more.
Virtually Anyone Can Open A Bank Account
Whether you are just starting out or have put off opening a checking account, there isn’t much to it. Any of the documents needed can be easily obtained.
One of the main things you’ll want to look for when opening an account is that it doesn’t charge fees or at least that you understand the conditions under which any fees will be incurred.
Beyond that, find a bank that has the feature you’re looking for - like online banking, a great mobile app, and high interest paid on your deposits.
If you’re not banking yet, what’s holding you back?
Robert Farrington is America’s Millennial Money Expert® and America’s Student Loan Debt Expert™, and the founder of The College Investor, a personal finance site dedicated to helping millennials escape student loan debt to start investing and building wealth for the future. You can learn more about him on the About Page, or on his personal site RobertFarrington.com.
He regularly writes about investing, student loan debt, and general personal finance topics geared towards anyone wanting to earn more, get out of debt, and start building wealth for the future.
He has been quoted in major publications including the New York Times, Washington Post, Fox, ABC, NBC, and more. He is also a regular contributor to Forbes.
Editor: John Frainee