If you’re a new adult, it’s time to get your financial act together. For many young people, this means opening their first checking account. Setting up a checking account is easy and doesn’t require much in the way of paperwork. However, there are some things you should know before opening an account, how much is it to open a bank account and use it?
Open a checking account as early as possible
As a student, you may need more resources and time. However, if you start early, it will be easier to open a checking account when needed. For example, if your family’s income changes suddenly or there are other issues requiring additional funds, they can use the checking account without any trouble. In addition to being able to open an account at any age, another benefit of establishing one early is that it gives more time for learning how to use it properly and effectively manage finances through this type of account.
Consider opening a checking account with a credit union
If you’re looking for a checking account that offers higher interest rates on deposits and better loan terms, consider opening a checking account at a credit union. Credit unions are not-for-profit organizations owned and operated by their members. They tend to offer more favorable interest rates on loans and lower fees than banks. For example, suppose you need to be in better standing with a bank, but your credit score is high enough to qualify for membership at one of these institutions. In that case, it may be worthwhile to start researching them to get back into the banking world again.
When you open your account, get ATM and debit cards
After opening your account, you’ll need a bank card. This can be an ATM card or a debit card. An ATM card is used at any ATM, while a debit card can be used at any store. You can also get a checkbook and PIN for your account, but you don’t need a credit card if you don’t want one—use cash or write checks instead of swiping the cards at checkout counters! “You may also be able to make deposits from your mobile device, at the teller window or at ATMs,” explains SoFi financial experts.
Don’t overdraw your account
You don’t want to overdraw your account. That’s why ensuring you have enough money in your checking account before making a purchase is important. If you overdraw, which happens when your balance becomes negative, you’ll be charged a fee by the bank—and even worse, the bank could close down your account. To avoid these problems, set up an automatic transfer from your savings account to cover any unexpected expenses and prevent overdrafts.
Keep track of all transactions and review them regularly
Now that you have a checking account keeping track of your transactions is important. You can do this by keeping the paper statements or downloading them from your online bank.
Reviewing the transactions regularly will help you keep track of your spending and avoid mistakes like accidentally overdrawing your account due to insufficient funds (which is where I’m always messing up). To avoid this situation, ensure enough funds are in the account before writing checks or withdrawing cash.
Determine your banking needs
When setting up a checking account, it’s important to determine your specific banking needs and find the type of account that best suits them. Consider factors such as how often you’ll be using the account, the type of transactions you’ll make, and any specific features or benefits you require. In addition, consider the interest rate offered on the account, as well as any fees that may be associated with it. By assessing your needs, you can make an informed decision and choose the right type of account to meet those needs.
Learn about online and mobile banking options
In today’s digital age, it is important to be familiar with online and mobile banking options. Many banks and credit unions offer online banking services, allowing you to check your account balances, view transaction history, transfer funds, and more, all from the comfort of your home.
In addition, mobile banking apps allow you to access your account information and make transactions from your smartphone or tablet, providing added convenience and flexibility. So before opening a checking account, ask about the bank or credit union’s online and mobile banking options and make sure they meet your needs and preferences.
Establish a budget
Having a budget is an important part of managing your finances, and setting up a checking account is a great opportunity to establish a budget for your spending. Consider your income sources, fixed expenses, and discretionary spending, and create a plan for how you’ll allocate your funds. Once you have a budget, it’s important to understand how to manage your account balance. That may involve monitoring your account regularly, alerting you of low balances or unusual activity, and avoiding overdraft fees by keeping your account balance positive.
Regularly review and update your account
Your financial needs and circumstances may change over time, and it’s important to regularly review and update your checking account to ensure it continues to meet those needs. Consider changes in your income or expenses, banking habits or preferences, and any new financial products or services available. Taking the time to review and update your account regularly can help ensure that your account continues to work for you, now and in the future.
Take advantage of additional benefits, such as overdraft protection and reward programs
Overdraft protection is a service many banks and credit unions offer to help you avoid costly overdraft fees. When you opt for overdraft protection, your bank will automatically transfer funds from another account, such as a savings account, to cover any transactions that would cause your checking account to become overdrawn. That can help you avoid costly fees and protect your account from becoming overdrawn. Before setting up a checking account, be sure to inquire about overdraft protection options and any fees that may be associated with the service.
Many financial institutions offer rewards programs that allow you to earn points or cash back for using your checking account. For example, you may earn rewards for making purchases with your debit card, using online banking services, or maintaining a minimum balance in your account. These rewards can add up over time, providing a valuable benefit to your checking account. When setting up a checking account, be sure to inquire about any rewards programs that may be available and determine if they align with your spending habits and financial goals.
If you’re still wondering what to do, remember that checking accounts are essential and should be set up as soon as possible. A checking account can help you better manage your finances.