Learn Which Bank and Bank Account Should You Choose?

Open the appropriate account type. 

First, choose a bank account that meets your needs. For example, for everyday banking, you might select a checking or savings account, a money market account for your emergency fund or a certificate of deposit (CD) for your long-term needs. You should also open a savings account while you open a checking account. This allows you to link the accounts, manually move money between them, and set up automated transfers, making it easier to save money regularly.

 

Keep an eye out for transaction restrictions. 

Savings and money market accounts have a monthly withdrawal or transfer of a maximum of six. Checking accounts are less restrictive, but you may only be able to make debit card transactions and ATM withdrawals of up to a particular dollar amount every day. Therefore, you should open a bank account with a greater daily spending limit if you frequently exceed that limit.

Take a look at the fees. 

Fee schedules differ depending on the kind of account. Check the website of the bank account you’re thinking about opening to learn about monthly maintenance fees, early withdrawal penalties for CDs, and other fees to see if you can afford it. Free accounts—those with no monthly maintenance fee—still exist, and it’s worth looking for one if you want to save your banking costs.

Examine the minimal balance needs. 

To avoid paying the monthly maintenance fee, you should retain this amount in a single for-fee bank account or total deposits at the bank. It can range from $25 to $10,000, so consider an account with a low minimum balance requirement if you want to avoid paying maintenance fees. If your average balance is low or middle-of-the-road, you could be better suited to opening a free bank account.

Many banks will also waive monthly fees if you receive a particular amount in direct deposits into your account during a statement period, have other products with the bank open, or are a senior citizen.

 

Examine the Small Print

Read any bank pamphlets you get, as well as the bank account agreement, carefully to ensure that you understand the terms and conditions of your new bank and bank account.

In addition to daily limits on debit purchases, some accounts limit the number of free checks you can issue in a statement period. Similarly, the bank may have specific procedures regarding when funds are available for withdrawal or stop payment on a check.

If your bank provides online account management, the tiny print is even more important because the services accessible online address many convenience alternatives. For example, there may be fees associated with online banking or bill payment. If you’re unsure what a policy means or how it will affect you, ask questions before opening a bank account.

What Should You Do If Your Bank Denies Your Application?

Banks, like other businesses, do not want to lose money, so they may deny your business if they consider you to be a hazardous customer due to a poor banking history. Most banks monitor your account activity and account closure history with ChexSystems, a consumer banking activity reporting firm.

You might have problems obtaining a new account if you have a history of overdrafts or, worse, if another bank terminated your account because you wrote bad checks. You may only be eligible for a “second-chance” account that does not require a review of your ChexSystems report. You’ll almost certainly have to pay higher-than-average fees for these accounts, but you may usually “graduate” to a standard bank account after a certain amount of time if you don’t make any more mistakes.

If you are refused a bank account, federal law requires the bank to send you an adverse action notification that names the entity that provided the negative information that resulted in your denial. Therefore, it’s critical to read this notice and request a free copy of your ChexSystems report within 60 days of receiving it to learn about the issues that drove the bank’s decision. In this manner, you can address harmful banking behaviors and ensure that your next bank account application is approved.