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how-to-open-bank-account
Banking

How to open a bank account

When you want to know how to open a bank account, you've got to ask yourself a few questions.

One being ⎯ what type of bank account should you open? The other being – should you use a bank or credit union?

There's no argument that banks and credit unions provide the safest place to store your money. Fortunately, whether you choose a bank or a credit union to store your money, the steps to open a bank account are practically the same.

There are several types of bank accounts. Knowing the difference will aid in your decision to open a bank account.

How to open a bank account

Here’s what you’ll need to open a bank account:

1. Photo Identification. Valid U.S. government (Federal or State) issued ID that includes a photo. Example: Drivers License, U.S. Passport or State ID. If you're not a U.S. citizen, you may be able to open an account with identification issued from your home country. Some banks may also require secondary identification such as a credit card.

2. Social Security number. Most banks still require your Social Security number or a Taxpayer Identification Number that you get from the Internal Revenue Service.

3. Proof of Address. Documents like a lease or utility bill with your name and current address can serve as proof of address.

4. Other personal information. This will include your date of birth, physical address, phone number, and perhaps your email address.

5. Initial deposit. You’ll only need this right away if your bank requires a minimum amount to open an account. You can usually fund your new account with a check, debit or credit card, or money order.

    • If funding your new accounts by electronic transfer from another financial institution, you’ll need their routing number and your account number.
    • If funding with a debit or credit card, you’ll need the card number, expiration date, and CVV code.

Types of bank accounts to consider

When you're new to banking start with a basic bank account like a checking account or savings account; or both.

  • Checking accounts. The checking account is mainly for your daily financial transactions. It’s the most liquid kind of account, meaning you’ll be putting money in and taking money out fairly frequently. It will be easy to access via your debit card, ATM, or checks. Consider a free checking account to avoid monthly maintenance fees.
  • Savings accounts. A savings account is for emergency funds or short-term savings goals. Make sure you find a high-yield savings account as the national average savings rate is currently pretty low at 0.09 percent. When you're ready to look at investment products like Certificate of Deposits, Mutual Funds or IRAs you can do a little research and contact your banker for options and advice.

How to choose a bank

5 Best Checking Accounts

 

Final thoughts

There's really no comparison when it comes to the importance of a bank account. From the safety and convenience a bank offers you to the opportunity to build a banking relationship and take advantage of ways to grow your money, having bank account is tantamount to building and maintaining wealth.

apy-calculator
Savings Accounts

APY Calculator: Find out how much interest your money can earn

APY Interest Calculator


Initial Investment (Optional):

Your Addition:

Annual Interest Rate (APR%):

Compounding Interval:

Years to Invest:

Future Value:

Total Deposits:

Interest Earned:

CIT Bank Savings Builder - 1.85% APY

High Yield Savings Account that only requires $100 to open an account plus $100 minimum single deposit per month to earn 1.85% APY or maintain a balance of $25k. Considering that the national savings rate earns 0.09% APY this is a good deal to grow your money faster.

UFB Direct Savings - 2.15% APY

UFB High Yield Savings Account will earn you 2.15% APY on balances of $10,000 and greater – more than 20X the national average. This account does not require a minimum deposit to open. Open now with $0

BBVA Money Market - 1.90% APY

Open a Money Market account online today with a $25 deposit. Earn 1.90% APY with an account balance of $10,000 or more. With the BBVA Money Market account, you will have access to an ATM card that allows you to withdraw cash when you need it.

what-is-a-money-market-account
Money Market Accounts

5 Important Facts About Money Market Accounts

What is a Money Market Account? Simple answer – it's a hybrid checking and savings account that earns high interest.

Money market accounts work much the same as other bank deposit accounts except the bank pays interest on your balance periodically according to the terms of the account. Money market accounts are a very popular savings vehicle but they are not long-term investment vehicles.

With money market accounts you earn interest on your money and they are FDIC insured up to $250,000.

Banks and credit unions offering money market accounts may have minimum deposit amounts or minimum balance requirements.

Money market accounts offer a great addition to your financial accounts for their flexibility and high interest rates.

5 Facts About Money Market Accounts

1. Money market accounts pay higher interest.

Money market accounts generally offer better interest rates than you’ll get from a traditional savings account. The interest is compounded daily. Plus, if you open a money market account at an online bank, you'll likely get much higher rates than a traditional brick-and-mortar bank.

2. Money market accounts make it easy to access your money.

Because a money market account combines features of both a checking and savings accounts, customers can access funds the same way funds in a checking account are accessed. Most money market accounts allow you to write checks or withdraw cash, and some offer a debit card that you can use to make purchases. That means you can also add money to a money market account whenever you like, unlike with certificates of deposit (CDs.) Money market accounts allow you to earn interest on your money while keeping your money accessible.

Money market accounts are great for things like:

  • Emergency funds
  • Saving for a major purchase
  • Vacation funds
  • Tuition funds
  • Budgeting for quarterly tax payments

3. Money market accounts may require large minimum balance.

Because of their competitive rates are good for people with high account balances. You may need to maintain a certain balance in the account at all times in order to earn the highest interest rate or avoid paying monthly fees, which eat into your return. Opening a money market account can be worth the return, even with the minimum balance restrictions. For instance, the average savings rate is currently 0.09% according to the FDIC. While a money market account at UFB earns 2.00% APY on balances of $25,000 and greater – more than 20X the national average.

4. Your balance is safe with money market accounts.

The Federal Deposit Insurance Corporation (FDIC) insures money market accounts up to $250,000 per depositor. That means you won’t lose your money in the unlikely event of a bank failure. Money market accounts are not money market mutual funds although they have similar names. They are entirely different products. A money market mutual fund is an investment product that is not FDIC-insured.

5. Restrictions can eat into your profit.

Be mindful that money market accounts come with federal withdrawal restrictions like savings accounts. They are still subject to the same withdrawal limitations of Regulation D that restricts activity. You have access to cash in a money market account, but there are transaction limits. You won’t be able to make payments with your checkbook or debit card more than six times per month by law. However, there are some unlimited transactions that do not apply toward your limit of six. These include withdrawals with a teller at a bank location and withdrawing money from an ATM.

Who should open a money market account?

Even if a bank requires a high minimum balance, a money market is good for saving money. Everyone needs an emergency fund. You may as well get as much bang for your buck. If you want the flexibility to write a limited number of checks, access to an ATM card all while earning a higher than average savings rate, a money market account may fit the bill. Your money is not locked away, like in the case of a Certificate of Deposit.

Check out these 3 Money Market Accounts

CIT Bank – 1.80% APY

CIT Bank is an online bank that offers competitive annual percentage yields (APYs) on its savings accounts, with its Savings Builder in the top tier of APYs. CIT Bank's Savings Builder APY is actually higher than their money market account. The 1.80 APY is one of the highest APYs in the market. It only requires $100 to open and a $100 monthly deposit to earn 1.80% APY.

  • Earn one of the nation's top rates — More than 25x the national average.2
  • Make at least one monthly deposit of $100 or more to earn the interest rate.
  • No account opening or maintenance fees.
  • Daily compounding interest to maximize your earning potential.
  • A limit of six transactions per statement cycle.3
  • Deposit checks remotely and make transfers with the CIT Bank mobile app
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    UFB Direct – 2.00% APY

  • Earn 2.00% APY on balances of $25,000 and greater – more than 20X the national average.
  • No monthly maintenance fees with a $5,000.00 balance, otherwise fee is $10.00 per month.
  • Minimum opening deposit of $5,000.00.
  • Access your funds 24/7 with easy-to-use digital banking tools.
  • Enjoy peace of mind with FDIC insurance up to the maximum allowable limit – Certificate #35546.
  • [dt_divider style=”thin” /]

    BBVA Bank – 1.50% APY

    BBVA Money Market offers 1.50% APY. BBVA is a large, Alabama-based bank that operates online in ALL states as well as branch locations in Alabama, Arizona, California, Colorado, Florida, New Mexico and Texas. The minimum balance required to earn 1.500% APY is $10,000 but there are no monthly maintenance fees and only requires $25 to open an account.

    • $25 minimum opening deposit.
    • Interest compounds and is credited monthly.
    • 24/7 online access with Online and Mobile Banking.
    • Option to link to your BBVA checking account for Overdraft Protection.

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    online-checking-account-no-chexsystems
    Banking

    Online Checking Account No ChexSystems: Digital Accounts To Open Instantly

    With an online checking account – no ChexSystems, unbanked consumers looking to conduct financial transactions through a bank can open a new account.

    With a stronger economy in 2019 and access to online and digital banking, there's no reason for U.S. consumers to be unbanked. If a negative banking history is prohibiting the unbanked from opening a new bank account, there are many banks that don't use ChexSystems.

    Wasting money on fees for checking cashing or prepaid debit cards is no longer necessary.

    It’s become clear that consumers enjoy smart, safe and convenient ways to bank. Digital banking can be a means by which consumers without a bank association can begin to bank again. Digital banking is not just apps and sites, it's full-service banking that offers customers the best of both worlds.

    Benefit from new technology to open an online checking account – no ChexSystems. A ChexSystems record, paid or unpaid, can remain up to 5 years and millions of people are unbanked because they have been flagged as high risk.

    An online checking account- no ChexSystems may actually help unbanked consumers manage finances better.  With instant alerts and updates it's easier to keep up with transactions and avoid mishaps that may land consumers in ChexSystems.

    Online Checking Account No ChexSystems

    1. BBVA Online Checking

    Accounts at are available to consumers in ALL States except Alaska and Hawaii. BBVA Bank branches can be found in Alabama, Arizona, California, Colorado, Florida, New Mexico and Texas.

    BBVA Online Checking account’s most popular feature is the rewards program. With the Simple Cash BackSM rewards program you can search for different deals that offer cashback that is deposited directly into your account.

    You can open the BBVA Online Checking with a $25 minimum.

    BBVA Online Checking Account details

    • No service fees. You won’t pay a monthly fee.
    • Deposit checks online. Mobile Check Deposit for any members who are enrolled in direct deposit with their Chime Spending Accounts.
    • Opening Deposit. Open the checking account with as little as $25.
    • Unlimited check writing. There is still a population of people who write checks for things like mortgage, groceries, rent, utilities and other bills.
    • Large ATM Network. No ATM fees nationwide at more than 64,000 AllPoint, participating 7-Eleven and BBVA USA ATMs.
    • BBVA Wallet. The BBVA Wallet app manages your payment cards and provides convenient access to them when you need it.
    • ClearBenefits program. This optional program offers roadside assistance, identity theft protection and cell phone protection.
    • FDIC-Insured. Deposits are FDIC insured up to $250,000.

    A few things to consider

    Overall the BBVA Online Checking Account offers anyone unable to open a bank account due to ChexSystems or bad credit a second chance at banking. However, there are a few things to consider with an online checking account – no ChexSystems:

    • Expensive Fees. Outgoing domestic wire transfer will cost you $30 and incoming domestic wire transfers is $15. Overdraft or Non-sufficient funds fees will cost you $38.
    • Paper statement fee. You’ll be charged $3 per paper statement if you decide not to get your statements online.
    • Low interest rate. When you’re looking for a savings account, you generally want the highest interest rate possible. Unfortunately, BBVA's basic savings account rate is 0.05%. However, if you have at least a minimum deposit of $10,000, you could earn 2.00% with BBVA's Money Market Account.

    What makes BBVA stand out in the digital banking arena is that customers get a human connection. Plus, BBVA offers an award-winning interactive app and an easy-to-navigate website that provides a great user experience.

    With BBVA you get the best of both worlds, both digital banking and human banking.



    2. Chime Spending Account

    Online-Checking-Account-No-ChexSystemsAnyone can open a Chime Spending Account. Chime customers get a Chime Visa® Debit Card, a spending account, and an optional savings account.

    Chime’s most popular feature is early direct deposit. Customers with direct deposit can get paid up to 2 days early. Customers enjoy free online checking account – no opening deposit and no overdraft fees.

    You can earn instant cash back on purchases from specific retailers, or in general categories like groceries, entertainment, utilities.

    Enroll in Chime’s automatic savings program so that every time you make a purchase or pay a bill with your Chime Visa® debit card, you’ll be adding to your savings account. Chime automatically rounds up transactions to the nearest dollar and transfers the difference into your savings account.

    Chime spending account details

    • No service fees. You won’t pay a monthly fee.
    • No overdraft fees. Any purchases that would bring your balance below zero would just be denied..
    • Get paid early. Set up Direct Deposit and receive your paycheck up to 2 days earlier than your co-workers.
    • Deposit checks online. Mobile Check Deposit for any members who are enrolled in direct deposit with their Chime Spending Accounts.
    • No deposit required. Open a Chime spending account with $0 dollars.
    • Optional savings account. Save money automatically every time you make a purchase or pay a bill with your Chime Visa® Debit Card. Chime rounds up transactions to the nearest dollar and transfers the round up from your spending account into your savings account but don't expect to earn a high interest rate. Chime's savings rate is currently 0.1%.
    • FDIC-Insured. All deposits into your Chime Account are FDIC insured up to $250,000 through our partner, The Bancorp Bank, Member FDIC.

    A few things to consider

    Overall Chime Spending Account offers anyone unable to open a bank account due to ChexSystems, EWS or bad credit a second chance at banking. However, there are a few things to consider with an online checking account – no ChexSystems :

    • Wire transfers. Chime does not currently allow wire transfers.
    • Paper statement fee. You’ll be charged $3 per paper statement if you decide not to get your statements online.
    • Bank transfers to Chime accounts. You can link an external bank account you own to your Chime spending account. But Chime only supports a handful of major banks for this transfer service, i.e. Bank of America, Chase, Wells Fargo, Citi, US Bank, USAA.
    • No check writing. Chime members do not get a checkbook. However, Chime will draft a check on your behalf and send it anywhere in the United States. Checks typically take 3-9 business days to arrive.
    • Low interest rate. When you’re looking for a savings account, you generally want the highest interest rate possible. Unfortunately, Chime is at the bottom end of the spectrum — 0.01% APY.

    What makes Chime stand out in the digital banking arena is that customers get a human connection also. While Chime's technology is cutting-edge and most transactions can be completed on the App, Chime offers a human experience too. Chime's representatives understand digital bank customers want and sometimes need to speak to a human banker.

    best-money-market-rates
    Money Market Accounts

    Best Money Market Rates 2019

    2019 has made finding the best money market rates far more easy. Banks, especially online banks are competing for your business and savings rates are on the rise.

    We like money market accounts because they allow you to save for the future while earning a great rate. But the most desirable feature to money market accounts is their liquidity.

    Money market accounts offer easy access when you need your money, without paying penalties for early withdrawal.

    The funds may also be more liquid: With checks and a debit card included, you can make transactions straight from your money market account, where savings accounts typically require you to transfer funds to yourself first.

    Both accounts, by law, have the same transaction limit, though — six per month.

    1. CIT Bank – 2.30% APY
    2. BBVA – 2.00% APY
    3. State Farm – 2.25% APY
    4. Sallie Mae – 2.20% APY
    5. UFB Direct – 2.15% APY

    Best Money Market Rates

    1. CIT Bank: 2.45% APY – $100 minimum deposit

    CIT Bank offers one of the best money market rates. The are primarily an online-only bank but available to residents in all states. With less overhead costs associated with banks with branch locations, they can return those savings to customers. CIT Bank consistently out-pays other top nationally available accounts. Earn a better-than-average-rate that only requires $100 to open and does not charge a monthly service fee. Learn more.

    2. BBVA: 2.00% APY – $25 minimum deposit 

    BBVA offers high interest with no fees plus a low minimum opening deposit of $25. The BBVA Money Market Account is a top contender at 2.00% APY. No monthly fees and daily compounding make this money market account one of the best options available. Customers also get quality mobile banking tools including mobile deposit capability to easily manage your money. Learn more.

    3.  State Farm Bank: 2.25% APY – $1,000 minimum deposit 

    State Farm LogoState Farm Bank pays a competitive rate as long as you maintain a $500 average daily balance or have a direct deposit (ACH credit) each statement cycle. If not you'll have to pay a minimum balance fee of $10 which can reduce your earnings. The State Farm Bank money market savings account has an ATM card available. Unfortunately, the 2.25% is an introductory APY for the first 12 statement cycles when opening a new consumer money market account. Learn more.

    4. Sallie Mae: 2.20% APY – $0 minimum opening deposit 


    SallieMae money market account offers a high rate of 2.20% APY and does not require a minimum balance to open and no monthly service fees. Account holders can write checks from their account and manage their account completely online at any time without talking to a banker. You can setup automatic transfers to grow your savings and deposit checks via your mobile device. Learn more.

    5. UFB Direct: 2.15% APY – $5,000 minimum deposit 

    UFB Direct's money market account is very competitive among high-interest money market accounts. In fact, its rate is currently more than 20X the national average. No monthly maintenance fees with a $5,000.00 balance, otherwise fee is $10.00 per month. Customers earn 2.15% APY on balances of $25,000 and greater. Learn more.

    Benefits of a money market accounts

    • Up to $250,000 is insured by the FDIC or NCUA for credit unions. Unlike investment accounts, earnings aren’t dependent on market fluctuations. You also don’t face penalties for accessing the funds, as long as you stay within the six-per-month limit.
    • Because a money market savings account is not an investment account, you run no greater risk for a higher yield.

    See how much interest you can earn with our savings apy calculator.

    types-of-bank-accounts
    Banking

    Types of Bank Accounts: How to choose the right bank account

    Banks are all around you. But how do you choose between the types of bank accounts to fit your financial needs.

    That’s what we help you do at Bankiful.

    We research banks based on various needs of the regular consumer. But first let's start with the types of bank accounts available to U.S. Consumers.

    Basic types of bank accounts

    The two most popular types of bank accounts are checking accounts and savings accounts. Each account serves different needs.

    • Checking accounts are best for daily financial transactions. They are the most accessible type of bank account. Checking accounts allow you to deposit checks, make withdrawals, and pay bills either through writing paper checks or electronic payments. Most checking accounts come with debit cards, which you can use to make purchases and withdraw money from ATMs. Some checking accounts earn interest, and many charge fees for maintenance, ATM withdrawals and overdrafts.
    • Savings accounts allow you earn interest on your deposits and serve as an easy way to stash your cash. Savings account typically limit the number of free withdrawals you can make per month due to a federal rule called Regulation D. Under Regulation D you are limited to six monthly savings transfers or withdrawals. However, using an ATM or teller helps get around the limit. The national savings rate is a low 0.09% APY unless you open a high rate savings account.

    Other types of bank accounts

    While savings and checking accounts meet many financial needs, other types of bank accounts have their own advantages. Here are two more types to consider:

    • Money market accounts earn more interest than your basic savings accounts, but they require a higher minimum balance, usually between $5,000 and $10,000. Additionally, there is no fixed interest rate for money market accounts: Instead, the interest rate varies based on money markets. Some offer the option of checks, but there is often a minimum check amount and a limit to the number of checks you can write each month. The number of withdrawals allowed is also limited.
    • Certificate of Deposits (CDs) earn interest at a higher rate than money market or savings accounts, but the money is not accessible to you for a set amount of time—typically between a few months to a few years. Like money market accounts, they require a minimum initial deposit. CDs are excellent tools for saving money, but only if you’re sure you won’t need access to the money until the end of the CD’s term. If you’re forced to withdraw before the time is up, you’ll pay a stiff penalty.
    • Retirement accounts allow you to avoid paying income tax on interest you earn from a savings account or CD each year. But you may have to pay taxes on those earnings at a later date. Still, keeping your money sheltered from taxes may help you over the long term. Most banks offer IRAs (both Traditional IRAs and Roth IRAs, and they may also provide retirement accounts for small businesses.
    This is what we look at when researching and recommending banks throughout the U.S.

    Accessibility:
    Is the bank based locally based or are there branches throughout the U.S.

    Online Tools:
    Can you do online what you would do in a branch

    Mobile Deposits:
    Higher than average interest rates on savings products

    Customer Service:
    Live help when you need to ask a question

    Free Banking:
    Are basic checking and savings accounts free so you can keep more of your money.

    High Interest Savings Products:
    Savings Accounts, Money Markets, Certificate of Deposits.

    Second Chance Banking Products:
    Second chance banking accounts for people with ChexSystems or EWS records who need a fresh start at managing a bank account.

    Overall Financial Products:
    Personal loans, Mortgage Loans, Car Loans, Student Loans, Business Loans. Lines of Credit, Credit Cards, Investment Products.

    Bank Bonus:
    New and existing customer opening cash bonus for opening an account.

    You can open multiple bank accounts to fit your financial needs. Once you know how to open a bank account, the process can be duplicated for most banks whether you open an online account or visit a branch.

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