Opening Your First Checking Account: What You Should Know
Whether you’re heading off to college or starting your first job, a checking account offers a way to manage your money in the short term and build good financial habits that can pay off for years to come. But, before you complete a checking account application, you’ll want to identify the type of account that matches your financial needs. While it’s easy to open an account, there are a few things you should know to select an account among the many available options. Don’t worry, we’ve got you covered.
Here’s what you should know about opening your first checking account.
You’ll need proof.
To open an account at a financial institution, documentation is needed to support you are who you say you are. Banks and credit unions may require different forms of proof, which often include:
- A government-issued identification card, i.e., U.S. Driver’s License/ID or U.S. Passport with Signature
- Social Security Number
- Proof of address, e.g., utility statement, cable bill, etc.
Besides proof of identification, most financial institutions require a minimum deposit to open an account. If you’re considering a checking account at a credit union, remember that they often require members to first open a savings account to establish membership with the institution. A small deposit is needed to open the savings account before you as a member can open additional accounts. This initial deposit establishes you as part-owner of the credit union and opens the doors to other financial services.
Checking accounts have different names.
When you review the account offerings of a financial institution, you’ll likely find there are several types of checking accounts with names that might explain the difference. For example, “Basic Checking Account,” “Student Advantage Checking,” “Premier Checking Account,” “ Checking PLUS,” etc. Each account bears a unique name to help consumers differentiate between them. Some will have minimum balance requirements, monthly account fees, and dividend payments if you maintain a minimum balance. Review the benefits and features of each account. Ask questions about those that are not self-explanatory. Your financial needs will determine which checking account is the best fit.
Features vary by financial institution.
Most financial institutions offer account holders the ability to monitor their accounts 24/7 using online banking. Online, mobile, and text communication regarding your account lets you initiate transactions such as bill payment and account transfers without visiting a branch location. The extent of these features vary by institution and may include the ability to:
- Pay your bills online with electronic checks or transfers at no additional cost;
- Deposit paper checks using your mobile device;
- Access your cash using an ATM debit card; and
- Provide a limited safety net to cover specific transactions when funds aren’t available in your account, i.e., overdraft privilege.
Checking accounts may even offer a variety of travel benefits, entertainment discounts, and purchase protection similar to those found with many major credit cards.
Use this checklist to help you decide which checking account is right for you.
Checking Account Selection Checklist
□ Is earning interest on my deposits of primary importance?
□ Do I plan on using the checking account to help monitor my spending?
□ How much money do I plan on depositing each month?
□ Will I direct deposit my paycheck into my checking account?
□ How often do I anticipate using out-of-network ATMs?
□ Which online banking features are most important?
□ Which checking account features will help me more easily reach my financial goals?
Different institutions offer different checking accounts to meet the needs of consumers. As long as you know what you’re looking for before opening your first checking account, the variety of accounts available won’t overwhelm you. Contact a Hughes Federal Credit Union representative today to open a checking account with no minimum balance requirements or monthly fees.