Overview: What Do You Need to Open a Bank Account?

Some people simply aren’t good with money and would prefer to stay as far as possible from banks.  We may prefer to be paid in cash, store our savings in a coffee can underneath our bed, or even barter our way through life. 

But in today’s increasingly financialized world, opening a bank account is a necessity that few can do without.  Learning how to open a bank account will allow you take advantage of the numerous benefits that the financial system allows. 

In this brief article, we’ll let you know what you need to open a bank account. We’ll also look through some of the most important factors to consider when opening a bank account as well as the benefits that come with opening a bank account. 

The Importance of Opening a Bank Account

Opening a bank account is easy, and in many cases, you can even do it from the comfort of your own home — as long as you have an internet connection and some savings stored away in some other online account.  Learning how to open a bank account is a pretty simple and straightforward affair that you can do in under an hour if you have all your documentation in order. 

Opening a bank account will bring a number of benefits to help you simplify your finances and take control over your money.  Gone are the days when payday was in cash.  Many businesses today won’t even offer you a weekly check; direct deposit into an employee bank account is the preferred method of payment.

If you are paid by a weekly or monthly check, unless you have opened a bank account of your own, you’re probably being a charged a fee to cash your check at sketchy cash advance companies.  These companies take advantage of people who haven’t learned how to open a bank account of their own and usually charge heavy fees to cash your check for you. 

opening a bank account

Image Source: Opening a Bank Account

By opening a bank account of your own, you´ll be able to escape these unnecessary fees to get access to your hard earned money.  You’ll also be able to apply for a number of jobs where the only form of payment is through direct deposit when you learn how to open a checking account.

Opening a bank account will also allow you to discover ways to better budget your money.  Having cold hard cash in your pocket is a temptation that many of us can’t resist; “burning a hole in your pocket” describes what many of us feel when payday comes around. 

Opening a bank account will allow you to take control over your finances and put limits on your own spending so as to help you create a more balanced budget.  For those of us who are living paycheck to paycheck, opening a bank account to put our finances in order can really help to keep our spending limited and under control.

By opening a bank account, you can easily set up daily withdrawal limits that will allow you to control how much you spend on a daily basis.  Furthermore, by learning what you need to open a bank account, you will also be able to set up direct deposits for your monthly bills, including rent, utilities, phone bill, etc.  For those of us who continually forget to pay the bills, learning how to open a checking account is a great way to stay on top of your financial responsibilities. 

Lastly, learning what you need to open a bank account will allow you to set up a savings plan.  Most banks will help their customers find ways to set up a monthly savings plan.  Even if you’re on a tight budget, opening a bank account to save only $50 a month will make a difference for your future. 

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Who Needs to Open a Bank Account?

The short answer is everyone.  Opening a bank account is one of the simplest and most important financial decisions that we all can make.  However, there are some people for whom opening a bank account can bring extra advantages.

College students may find themselves wondering, “What do I need to open a bank account?”  For many students, balancing tuition, living expenses, book expenses, classes, and work is a difficult endeavor.  College is a crazy time of life, but for many people, the financial burden of a college education can also be stressful.  Opening a bank account is an easy way to help college students take control over their financial lives. 

Many banks even offer special accounts for college students and may even give free financial advice to help college students.  By making the decision to open a bank account, many college students will be able to set up direct deposits for their tuition and other study-related expenses. 

Migrant workers are another sector of the population who are often excluded from the benefits of opening a bank account.  Since these workers often don’t reside in the places where they work, the money they earn is often paid in cash.  Many migrant workers may travel to their places of work with the express purpose of saving up money before returning home. 

By learning the requirements to open a bank account, these workers could improve their savings capability through earning interest and establishing a periodic transfer plan to send money back to their home communities.  In fact, many migrant workers may even be able to save money faster if they have a bank account where they can periodically deposit their savings. 

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How to Open a Bank Account

You may ask, “What do I need to open a checking account?” The process of opening a bank account is fairly straightforward and can be done with only the most basic documents. 

Before opening a bank account, however, it’s important to find a bank that offers low fees and good interest rates. Though discovering what do you need to open a checking account may very well help you organize your personal finances, there is nothing worse than losing a sizeable amount of your monthly income through unreasonable bank fees and service charges. 

If you regularly have economic problems, it may be good to find a bank that doesn’t demand a minimum account balance. Many banks will charge hefty fees if your balance drops below a certain figure.  It’s important to read the fine print before opening a bank account. 

Furthermore, if you’re interested in trying to increase your savings, then you’ll need to find a bank that offers a decent interest rate.  Learning how to open a checking account will be helpful if you simply want more flexibility in your financial life.  Checking accounts will help you receive payments, set up direct deposits, make calculated monthly payments, and deal with other important aspects of your financial livelihood.  However, most checking accounts don’t offer very high interest rates.

how to open a bank account

Image Source: How to Open a Bank Account

When considering what you need to open a bank account, it’s also important to think about what that account will do for you.  If you want to earn interest on any sizeable savings that you may have, it’s important to find a bank that specializes in high interest savings accounts. 

Lastly, if you have another existing account already, you should be able to open a new bank account simply by arranging a transfer of funds from your existing account.  Though most banks will make it easy to facilitate this transfer, it’s important to investigate whether your bank will charge a fee for the transfer of funds in order to open your account. 

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Documents Needed to Open a Bank Account

There is nothing worse than making the trek into town to open a bank account and waiting patiently in line before discovering that you don’t have the required documents needed to open a bank account.  Most banks will ask for the same basic documentation for opening a bank account that we have listed below: 

  • Valid photo identification such as a driver’s license or a passport.  Your university ID card won’t work for opening a bank account. 
  • Personal details such as Social Security number, address, and phone number.
  • For joint accounts, you’ll also obviously have to include the photo ID and personal information of the other person who is opening a bank account with you. 
  • If you’re under 18, you’ll also need your parent’s photo ID and personal information to help you open your bank account. 
  • Money.  Though money technically isn’t a document, you’ll need to have some funds in order to open your bank account.  Though some banks will allow you to open a bank account and then fund it later, the vast majority of banks do have a minimum deposit as a requirement to open a bank account. 

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The Long-Term Benefits of Opening a Bank Account

Opening a bank account will mean that you won’t have to carry large amounts of cash with you everywhere you go.  Almost all banks are connected to some sort of ATM system which will allow you to withdraw money during a cross-country trip or even during a vacation to the farthest corner of the world. 

Since most businesses in today’s world accepts plastic as a form of payment, you can pay for everything from gas to dinner with a debit card that your bank will issue you when you open a bank account with them. 

By not relying on cash, you run less risk of having your money lost or stolen. It’s a lot easier to hold on to one card than a handful of loose bills and coins.  In today’s increasingly dangerous world, walking around with a wad of cash is not always wise. 

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Furthermore, through opening a bank account, you’ll also begin the long-term process of building a reputation with your local bank.  Through opening a bank account and maintaining it over time, your bank will witness your financial responsibility.  By deciding to open a bank account, you’re basically creating a record that will show your earnings over time and your responsibility in making payments on time. 

Should you need a loan from the bank in the future for the purchase of a home or a car, having opened a bank account will show the bank your long-term financial reputation and may be an important factor in whether or not the bank will approve your loan request.  

Opening a bank account is an important first step for anybody.  In this article, we have shown you how to open a bank account and given you the requirements to open a bank account.  All that’s left is for you to get online and start researching which bank is the best fit for your own financial needs.

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