Opening and Types of Bank Account: by Rushil Pandey 11h

Opening and types of bank
account
By Rushil pandey 11h

OPENING OF BANK ACCOUNT
• Finding and opening a bank account can seem intimidating given the sheer
number of options out there. Fortunately, most banks and credit unions
follow a straightforward process similar to the one described below. Getting
your account open is just a matter of picking a bank, providing certain
details, and funding your account. Once the formalities are done, you can
start using your account and save time and money.
CHOOSE A BANK OR CREDIT UNION
• You might already know where you want to bank even if you don't know how to
open an account there. If not, shop around. Start by finding the best match for
your immediate need (a checking account or savings account, for example). As
you compare institutions, be mindful of account usage restrictions and fees that
can eat into your savings.
• There are three basic categories of financial institutions:
 Banks, including community banks and big banks: These might be well-
known brands in your local community (or nationwide). They offer most of the
basic services you need. Local and regional banks tend to have more friendly fee
structures, but it may be possible to get fees waived at big banks
Credit unions: A credit union is a customer-owned financial institution that
provides many of the same services and products that banks provide. If you
join one of these not-for-profit institutions, you'll often enjoy competitive
rates because they're not necessarily trying to maximize profits. But that’s not
always the case—so review fee schedules carefully.
Online banks and credit unions: These institutions operate entirely online.
There’s no branch to visit (or pay for), and you’ll handle most service
requests yourself. If you’re comfortable with your computer or mobile device
—and performing basic banking transactions—an online bank can help you
reduce your fees, earn higher interest rates on savings accounts, and even get
free checking.
Visit the Bank Branch or Website
• The easiest way to open an account is to visit the institution’s website. Search
for the bank online, or visit the website listed on the bank's marketing
materials (be careful when you type in the web address—impostor sites with
similar names may exist).
The advantage of opening accounts online is that you can do it at any time,
from anywhere. But if you're only comfortable opening accounts in person,
show up at the branch during business hours. Before you leave the house,
have the following items ready:
• Your government-issued ID (such as a driver’s license, passport, or military ID)
• Your Social Security Number
• Your physical and mailing address
• An initial deposit (if required)
PICK THE PRODUCT YOU WANT
• Checking accounts: Use these for making payments and receiving direct
deposits.
• Savings accounts: These accounts allow you to earn interest.6
• Money market accounts: These products sometimes earn slightly more interest
than savings accounts (while maintaining your access to cash).
• Certificates of deposit (CDs): These products can earn much more than savings
accounts but require you to lock up your funds for a certain period.7
• Loans: You can take out one of several types of loans (auto, home, personal
loans, for example).
• Within one of the above categories, a bank may offer multiple products, each
with a different name and level of service. Premium accounts that come with
more features have correspondingly higher fees (like monthly service fees, ATM
fees, and overdraft fees) and higher thresholds to avoid the service fee
PROVIDE INFORMATION
• As you open a new bank account, you'll need to provide sensitive information to the bank. To protect
themselves and comply with regulations such as the Patriot Act, banks can't open an account without
verifying your identity.9
• You’ll need to provide simple details like your name, birthday, and mailing address, as well as
identification numbers (in the United States, this is most likely your Social Security Number, but you
may be able to use an ITIN). You'll also be asked to present a valid government ID (such as a driver’s
license or passport).5
• If you're opening a bank account online, you'll type this information into a text box. If you set up your
accounts in person, be prepared to hand your ID to the banker, who will probably photocopy it.
• You don't need a squeaky clean history for a bank account, but it helps. Many banks check your credit
to see if you’ve had problems repaying loans in the past. These credit checks are usually “soft” pulls
that do not damage your credit—but it’s best to ask, if you’re concerned. You don’t necessarily need
good credit to get a bank account, but having bad credit can sometimes lead to denials.
PRINT, SIGN AND FUNDING
• If you're opening a bank account online, you may have to print, sign, and mail
a document to the bank before the account is opened. Some banks use
electronic disclosure and consent to make the banking relationship legally
binding you can do everything online.
• Others still require a signed document to open an account. Until the bank
receives the documents, your account is not active.
• If you’re opening a checking or savings account, you’ll often need to make an
initial deposit into the account. Sometimes, this is required as part of the
opening process, and other times, you can do it after the account is up and
running.
TYPES OF ACCOUNTS
• Bank account is a monetary account with a banking institution

recording the balance of money for a customer they can have a
positive/credit balance where the bank holds money on behalf of
the customer or a negative/debit balance where the customer
owes the bank some money banks send statements of account to
their clients to inform them about the state of their account.
CURRENT ACCOUNT
DEPOSIT ACCOUNT
• is an account which enables to
withdraw many any time in various • the bank holds money on behalf
ways (electronic payment, money of the account holder.
order, ATM). • some banks charge a fee for this
• all financial transactions are listed service, others pay the client
in a bank statement or a passbook. interest on the deposited funds.
• on the credit side there are • the account holder holds rights to
deposits, salaries, incomes of the the deposit.
account holder.
• the withdrawal of money depends
•
on the debit side there are on the terms and conditions of the
payments, money transfers, regular account and the bank.
payments (for rent, electricity).
• do not have high interest.

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Opening and types of bank

By Rushil pandey 11h

• Bank account is a monetary account with a banking institution

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