Opening your first bank account is an exciting time. It’s one of the first steps of establishing your financial footprint in the world. Thanks to easy access banking, it is much simpler these days, but you still need to know the basics.
Opening an account
This is probably the easiest step of the process. You’ll need some form of identification and small cash deposit to open your account. Banks offer multiple types of accounts – checking, savings, checking with interest, checking with rewards, etc. Ask to talk with someone who will help you pick the account that suits your needs. Make sure to ask about fees and minimum balances. Some banks require you have at least a certain amount in your account to avoid fees.
Checking accounts are accessible any time and are the most-popular type of account. They are used for everyday expenses and making purchases. If you have something you want to save money for, like a car or school, you should consider a savings account. You can place money into the account and keep it safe. You’ll even earn interest (money the bank pays you for keeping your account at their bank) on your money.
Most banks charge a small fee for checks. However, you may qualify for free checks as a new customer. The bank will help you order your new checks, and give you a few “starter” checks in case you need to write a check before you get yours in the mail.
Once you receive your checks, keep them in a safe place. The checks will have your account information on them. Later, if you need more checks, you can order them over the phone by calling the bank or online through your bank account.
There are many ways to make deposits. If you receive cash, you’ll need to go to the bank or ATM to deposit the cash into your account. You’ll swipe or insert your card at the ATM and follow the steps on the screen to deposit the cash. You do not need to put in an envelope or include a deposit slip. You’ll receive a printout confirming your deposit. The printout will also tell you when the money will be available for your use.
If you have a check you need to deposit, you can use an app or go to the bank. Almost all major banks are set up to accept mobile deposits. You open the bank’s app and take a picture of your check and it is electronically deposited into your account. It is very important you sign the back of the check and write “for mobile deposit” beneath your signature. Do not immediately destroy the check. Hold onto it for a few days until you know the deposit went through.
When you need to take money out of your account, you can go to the bank, ATM or anywhere that accepts a debit card to make a withdrawal. Similar with making a deposit, you swipe or insert your card and follow the steps on the screen to withdraw cash. If you speak with a teller, they may ask for ID before giving you the cash you request. Banks establish limits to how much you can withdraw and will display that on the ATM screen. If you cannot get to a bank and need some cash from your account, many stores will allow you to receive cash back during a purchase transaction. Some stores charge a fee so make sure you ask before you do that.
Completing a check accurately is very important because if you forget something or write something that can’t be read, it could cause your check to be rejected by your bank.
- Enter today’s date. Do not future date checks. Some people will tell you that it’s okay to do that, but you cannot control when your bank will try to cash the check. They will not “hold” a check for you until the date you wrote.
- Enter the person or business you want to pay.
- Write the amount using numerals and decimals.
- Write the amount using words and numerals for the “cents.” Draw a line after your words to prevent others from writing in a different amount.
- Sign your check.
- In the memo section, write an account number if you are paying a bill or a short note as to why you wrote the check.
Make sure you keep track of all the checks you write. You bank should have provided a check register booklet with your checks for you to write down all your checks, deposits, withdrawals, etc.
Balancing your account
It is important to keep track of how much money is in your account, including transactions that have not posted yet. You can do this by using a check register booklet, a notebook, a spreadsheet or an app on your phone. Every time you use your ATM/debit card or write a check, you need to write it down. Every time you make a deposit, you need to write it down. Some banks offer an electronic version of this when you set up online banking. The software shows you balances after every deposit or withdrawal.
You should access your bank account online (or review a paper statement if they mail you one) and match all your transactions to what they have. Your balances should match. If your balances don’t match, there may have been a mistake at the bank, or you may have forgotten to write something down. Checking the balance often will help you to not overdraw your account.
Congratulations on taking the first step to establishing your financial footprint in the world! If you are a Skill-Builders client and need assistance, please message us here.