What is a checking account?

This is usually the account that people are referring to when they talk about their "bank account". This is an account that lets you deposit your money to be kept safe while still being able to spend it. This type of account also allows you to spend your money without having cash in your hand, instead allowing you to use a debit card or checks to pay. (Consumer.gov)

Investopedia.com explains checking accounts further by stating, "Checking accounts are offered by most banking institutions for a minimal fee or no fee at all. Thanks to advances in electronic banking, many people can now use checking accounts to set up automatic payment of routine monthly expenses with a one-time setup."

Why open a checking account?

Opening a checking account can help you (Consumer.gov):

  • Keep your money safe.
  • Pay using a debit card or check instead of carrying cash with you.
  • Withdrawal cash from an ATM.
  • Pay your bills online.
  • Access to loans (depending on your credit history).
  • Wire money.
  • Cash checks.
  • Some checking accounts pay interest on the money in the account which will earn you even more money.

How to Open a Checking Account

If you decided on a bank after comparing and contrasting the banks and credit unions you had to choose from, you would then open a checking account at that bank. Most banks offer several different checking accounts. Like the list that you made when deciding which bank or credit union you wanted to bank with, you can use the same process in determining which of the bank's checking accounts work best for your needs. (Consumer.gov)

  • Make a list of what you are looking for in a checking account. This could include convenience of withdrawing money, fees, minimum balance requirements and the interest rates offered.

  • Check out the offers that each of the checking accounts may have. This would include interest rates, varying levels of required balances in a checking account before incurring fees and a possible bonus deposit from the bank for opening a new account.

  • Ask about the fees that are charged on their checking accounts.

Once you have gathered this information make a "pro" and "con" check list for each of the checking accounts that considered, weigh, compare and contrast what you have listed to see which checking account most closely matches the benefits that you wanted at the beginning of your search.

If you chose a credit union to bank with, make sure to ask to open a checking account if the teller opening your account did not already mention opening one. This account will be in addition to the savings account that you open as the only required account needed to open a new account at a credit union is a savings account. You will compare the checking accounts available at the credit union in the same manner as you would at a bank.

Savings Accounts

What is a savings account?

A savings account is an account you can open at your bank or credit union that allows you to deposit the money that you want to save and keep separate from your spending money and in some cases can earn a small amount of interest on the balance that is deposited in the account. (Consumer.gov)

Investopedia.com explains savings accounts further by stating, "Because savings accounts almost always pay lower interest rates than Treasury bills and certificates of deposit, they should not be used for long-term holding periods. Their main advantages are liquidity and superior rates compared to checking accounts."

Why open a savings account?

Opening a savings account can help you:

  • Save money for emergencies or a savings goal you have set for yourself.

  • Keep your money safe (and sometimes even earning money for you).

  • To keep the money you want to save separate from your spending and bill money. (Consumer.gov)

How to Open a Savings Account

If you already have a checking account with a bank, you can simply go into a location of your bank and let the teller know that you want to open a savings account. Most of the time there will be a minimum deposit required to open the account.

Like the list that you made when deciding which bank or credit union you wanted to open your checking account with, you can use the same process in determining which of the bank or credit unions savings accounts work best for your needs. (Consumer.gov)

  • Make a list of what you are looking for in a savings account. This could include convenience of withdrawing money, fees, minimum balance requirements and the interest rates offered.

  • Check out the various savings account offers. This would include interest rates, varying levels of required balances in a checking account before incurring fees and a possible bonus deposit from the bank for opening a new account.

  • Ask about the fees that are charged on their saving accounts.

Once you have gathered this information make a "pro" and "con" check list for each of the savings accounts that you looked at to see which savings account most closely matches the benefits that you listed at the beginning of your search.

If you chose a credit union to bank with, you most likely already have a savings account as that is the only required account needed to open a bank account at a credit union.