checking account overview

Posted : February 12, 2018
Last Updated : February 12, 2018
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checking account overview

A checking account can help you manage your daily finances. Here is an overview of the types of checking accounts from which you can choose and the process for opening an account.

Types of Checking Accounts

Free/Low-Cost Checking
The charge for a low-cost checking account is often no more than $5 per month. However, this fee may be waived if you use direct deposit or use your ATM or debit card a minimum number of times a month.

Electronic-only/ATM Checking
This account usually requires you to use direct deposit and your ATM or debit card. This account might be right for you if you handle most of your banking transactions online or via an ATM rather than going in to a bank branch. Remember to verify the fees. You may be charged a monthly service charge for not meeting a minimum number of online or electronic transactions, writing checks, or using in-person teller services.

Regular Checking
With a regular checking account, there is usually a minimum balance required to waive the monthly service fee. This type of account usually offers unlimited check-writing privileges.

Interest-Bearing Checking
With these accounts, you usually have to maintain a high minimum balance – generally at least $1,000 – in order to earn interest and avoid fees. There are different interest-bearing accounts:
  • Negotiable Order of Withdrawal (NOW) Account
  • Money Market Checking Account

Opening a Checking Account

Requirements for Opening a Checking Account
When you decide to open a checking account, you’ll be asked to prove your identity by providing a photo ID (e.g. state-issued driver’s license or ID card), your Social Security Number (SSN), or Individual Taxpayer Identification Number (ITIN) for your opening deposit.

The bank will then verify you’re who you say you are and have you complete a signature card. A signature card is a form you complete and sign when opening an account. This is the document that identifies you as the owner of the account, and it identifies what your signature looks like. This helps protect you and your money against forgeries and unauthorized account use.

Identity Verification and Checking History
The bank performs identity verification because it wants to make sure that no one is trying to steal your identity to open an account. The bank may also check to see whether you have any outstanding issues with other banks, and how you have managed your accounts in the past. The bank may even pull your credit report to assess your risk as a potential customer.

If the bank determines that you’re not eligible to open an account, ask about “second chance” checking programs. These programs may require you to meet certain requirements (e.g., completing a check-writing workshop). Ask your local financial institution and/or any reputable credit counseling agency if there are programs in your area.



Source: PlanningYourDreams.org
 

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checking account overview






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