Opening Your First Bank Account

A bank account is the foundation of nearly everything else in personal finance. Direct deposit, automatic bill payment, building credit, and receiving a tax refund all assume you have one. Opening it takes about twenty minutes.

What to bring

• Government-issued photo ID such as a driver license, state ID, or passport
• Social Security number or taxpayer identification number
• Proof of address, such as a utility bill or lease
• An opening deposit, sometimes as little as $25

If you are under 18, most institutions require a parent or guardian to open a joint account with you.

Banks and credit unions

Credit unions are member-owned nonprofits and frequently offer lower fees and better rates than large commercial banks. Membership is usually tied to where you live, work, or study, and the requirements are often easier to meet than people expect. Online-only banks tend to pay higher interest and charge fewer fees, at the cost of no branch to walk into.

Fees to ask about directly

• Monthly maintenance fee, and exactly how to have it waived
• Overdraft and non-sufficient funds fees
• Out-of-network ATM fees
• Minimum balance requirements
• Paper statement fees

Overdraft protection is not free

Overdraft coverage lets a transaction go through when your balance is too low, and charges a fee for the service — frequently around $35, sometimes several times a day. Declining overdraft coverage means the card is simply declined instead, which is embarrassing for a moment and free. For most people opening a first account, declining it is the better default.

Confirm your deposits are insured

Look for FDIC insurance at a bank or NCUA insurance at a credit union. This protects your deposits up to the legal limit if the institution fails. Any legitimate institution states this clearly; if you cannot find it, that is your answer.

This article is educational information, not personalized financial advice. For guidance specific to your situation, book a free consultation with our team.