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Tuesday, May 14, 2024

Finance Guide: Things You Need To Know Before Opening A New Bank Account

As we get older, we become more responsible when it comes to our actions, spending, and daily activities. Buying something besides your necessities is something we think about now that we are older. Unlike before, buying things that you don’t actually need is an easy thing to do; now, we tend to think things through before we buy something. 

We manage our money more responsibly now, and there are tons of ways that we do it. We save it, hide it somewhere safe, and the safest way of keeping your money is by saving it in a bank by opening a checking or savings account. However, not many people do it. Most people keep their money at home since they feel like it is the smartest thing to do. But in reality, keeping your money at home is a risk. 

There’s a huge chance that it will get stolen or, worse, eaten by termites, which is precisely why putting your money in a bank is much preferable. Opening up a banking account offers a lot of perks. For example, you can get Citi checking account bonus offers whenever you open an account with Citi or rewards. 

If you’re like them, who typically keep their money at home, then this is a sign that you open one. Don’t worry if you don’t know how to start. In this article, we provide you with everything you need to know before you open your new bank account.

Compare Different Institutions

Do not assume that the account options provided by a well-known bank or other financial organization will inevitably be the greatest for you simply because that institution has a well-known name. Compare the many features offered by several banking accounts until you locate the most suitable one. Before settling on one particular account, it is important that you gather information from a number of different financial institutions so that you may evaluate and contrast each of them.

You can ask your family or your friends for recommendations. Ask them about the features that their bank offers. Is it FDIC insured? Does it have minimum balance requirements? Does it give sign-up bonuses? It is important that you ask these questions to avoid problems later on. Knowing if the bank is FDIC-insured will help you decide in choosing which financial institution you like to put your money in. FDIC provides insurance up to $250,000 per depositor, which is a significant factor that you should consider.

Ask for Account Fees

Always ensure that you ask about the account fees. There are certain banks that charge fees on accounts, while others only charge fees on accounts if the balance drops below a specified threshold. Be sure to collect as much information on the account as possible from the start. Ask the representative of customer service to provide you with an overview of all of the potential fees that are associated with the account option you have selected, including fees for having a low balance as well as fees that will be incurred if you choose to obtain a copy of your canceled checks. 

Be sure to also inquire about any fees that may be associated with using the bank’s services, such as ATM withdrawals and overdrafts, as some financial institutions do charge for these things.

Find out their current interest rates.

There is a rate of interest attached to each savings account. You need to be aware of the interest rate that the bank offers on savings accounts if you are planning to open one or think you might want one in the future. However, if you are considering opening a checking account, you should be aware that certain financial institutions do, in fact, provide interest rates. Even though checking accounts aren’t designed to store significant sums of money for extended periods of time, it is possible to discover accounts that offer interest rates that are higher than the industry standard.

The average APY is 0.04%, but some banks offer more such as Citibank. Aside from Citi checking account bonus, Citibank also provides 0.12% or more APY, depending on your account balance. 

Identify Account Services being offered.

The services that different banks provide to their consumers also vary. Some companies, for instance, provide customers with the option to pay their bills online, which may be an extremely helpful amenity because it eliminates the need to purchase postage, stuff envelopes, and worry about missing payment deadlines. Some also provide the option of direct deposits, while others provide reports or notifications when your account balance drops below a certain threshold, all with the goal of facilitating more efficient account management.

Choose the type of account to open.

You should give some thought to whether you want to open a personal checking account, a savings account, or both of these accounts before making a decision. They each perform a unique job in the management of your finances.

A checking account allows you to manage your money daily, pay bills regularly, and withdraw money when you need it. In contrast, a savings account is generally money put away for, yes, savings! Reserving three to six months of income in a savings account is a smart financial plan in case of an emergency. 

Be prepared to make a deposit.

Be ready to make a deposit once you have decided on the financial institution where you want to open an account as well as the type of bank account that you want to open. When opening a checking account, you should have enough money in it to easily pay any expenses that might become overdue. Meanwhile, when opening a savings account, you should consider the first deposit in relation to the goals you have for the account.

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