It’s never too early to start saving money. While your piggy bank is great place to start, as you get better about saving, you’ll want to put your money in a safer place. Opening a savings account in a bank is one of the best ways to manage your money all while learning how to make good financial decisions.
If you’re under 18, opening a savings or checking account may be difficult. You’ll need an adult you trust to sign the contract with you. This can get tricky because technically, they share this account with you, it’s what banks call a “joint account”. If you have a parent or guardian you trust to help you with this, it’s definitely worth it. If not, you may want to research banks that allow accounts for people under 18 years of age to sign up without a parent/adult signature.
What kind of account should I get?
With all that squared away, you’ll want to do a little bit of research on what kind of account will work best for you. Typically, there are two kinds of accounts that banks offer:
- Savings Account
- Checking Account
A Savings Account is meant for money you plan on keeping for a long time. Think of it as your piggy bank with a lock on it. You can access that money, but it isn’t easy. You can take money out of your savings account via the bank or an ATM, but if you wanted to use a check or a card to pay for something, you’d need a checking account. The nice thing about a savings account is that your money gains “interest”. Interest is basically money the bank gives YOU for keeping your money safe in this account. The more money you keep in your savings, the more the bank pays you in interest. It typically isn’t much, but hey, free money!
A Checking Account is what most people use to pay for things day-to-day. With a checking account you will get: checks (of course) and a debit card. This what you can use to pay for your groceries, bills and all the fun stuff you want on Amazon. Unlike a saving account, the money you put in to this account won’t earn interest. So whatever you put into this account is what you have easy access to.
What bank should I choose?
After you figure out the kind of account you want to open, start looking up banks near you. Small, local banks are great because they can provide more personalized customer service to you and easily answer questions about your account. The downside is that they usually only have a few locations so finding a bank may be a challenge. Bigger, more well-known banks can’t provide the same one-on-one service as a smaller bank, but they have many more locations and ATMs available.
Keeping these facts in mind, the next thing you should consider when choosing a bank is their rules for new accounts. All banks require a minimum deposit that could range from $25 – $300. Depending on how much money you have, this will definitely affect your decision about which bank to go with.
Some banks also have a minimum balance (the lowest amount of money you can keep in your account before you are charged a fee or have your account closed), a limit to how many times to can take out money or a monthly charge for using the account. Be sure you research ALL the rules before opening any kind of account. These rules are different from one bank to the next so if you don’t like the rules at one bank, check another!
When you’re ready to open your account…
So you’ve picked a kind of account and a bank, now you’re ready to open an account! The best way to open an account is to go to the bank in person, that way you can talk to someone face to face and have any other questions answered before depositing your money. Some banks allow you to open an account online or over the phone, but those can be tricky. We’ll focus on going to your bank in person for this article.
- Figure out what you need. If you need a certain amount of money to open an account, make sure you bring that with you. You’ll also have to bring a picture ID (like you learner’s permit/drivers license or a passport), your social security number and sometimes, proof for your address (so a piece of mail with your name and address on it)
- Fill out any of the paperwork needed. The bank will usually give you a form to fill out to apply for an account. Fill this out completely and truthfully.
- Keep all the papers the bank gives you. Once you open your account, the bank will give you all kinds of information about your account. Keep everything somewhere safe. These paper will also give you information on how you can monitor your accounts and keep your information (and money!) safe.
Opening your first bank account is just one step towards financial success. After you open an account, you’ll be one step closer to building a solid foundation for years to come.