In the US, almost 95% of households had at least one resident with a checking or savings account in 2019. This is approximately 124 million households and shows the popularity of this in the United States.
To open up a bank account there are a certain number of criteria that you need to follow. You’ll need to deposit around $25 to get the account started and provide certain information. Below we’ve covered the steps to opening a bank account.
What Is A Bank Account?
Traditionally a bank account is an account to store money that is operated by an institution like a bank or credit union. In recent years, you can now get an online bank account that is managed by bank or other apps.
At its simplest, a bank is a place for you to store and manage your money, pay bills and save money.
A bank account will record all the transactions that you make and gives you an accurate financial picture. They’ll send you a monthly statement that shows how much money you have and also can be used with budgeting, apps, and other ways to keep track of your money.
Depending on who you decide to bank with, you can set up an account online or in person. If you use an online only bank it is typically cheaper because they have lower overheads as a compan and tend to pass this on to you as a consumer.
However, if you need lots of assistance in person then a bricks-and-mortar bank might be the way to go
Is There A Difference Between A Savings And Checking Account?
A checking account is usually used for day-to-day transactions. This might be withdrawing money, having your salary paid into it, or paying bills. When looking for a checking account you want somewhere with low fees, free ATM access, and low or no monthly costs. If you’ve been denied a bank account in the past because of poor credit, then you might want to look at a second chance checking account.
The savings account, on the other hand, you typically wouldn’t access day today. It’s typically used for savings, which makes sense as it is called a savings account. You would use this to make monthly deposits from your paycheck and save money for a rainy day. You’ll want to find one with high-interest rates so that you get the most from your money.
What Information Do I Need For A Bank Account?
When you want to set up your first bank account, you will need a form of ID – something provided by the government. This could be a passport, driver’s license, or state identification. You also need to give specific personal details including contact information, where you live, date of birth, a tax identification number, and your social security number.
If you want to open up a joint account with a partner or spouse, then you’ll also need their information.
The information that they ask for will be the same regardless of whether it’s a checking or savings account. Depending on how old you are, there might be a couple more questions. If you’re under 18, you’ll need a cosigner which could be a parent or guardian.
The bank will also want to see that you have enough money to fund this account and might ask you for a deposit of $25. This will get your bank account started and can be added by cash or check. If you already have a bank account, you might want to make a bank transfer of this amount into your new account.
Do I Need A Bank Account For A Payday Loan?
You don’t always need a bank account for a payday loan, but it does help. If you don’t have a bank account, you can take out what is called a doorstep loan. A doorstep loan allows you to borrow a small amount of money that’s delivered to your door. Hence, doorstep.
The doorstep loan is borrowing physical cash which is different from a payday loan which is paid into a bank account of your choice. These types of loans are regulated by the FCA but sometimes it is a grey area so they can be stressful when someone comes to collect money each week.
This means it is possible to borrow money without a bank account but we wouldn’t recommend it.
Borrowing money with a bank account is much easier than without. The payday lenders that we work with require you to have an active bank account, among other requirements.