How to Get Started If You’ve Never Had an Account with a Bank
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How to Begin If You’ve Never Had A Bank Account
Written by Spencer Tierney Senior Writer | Certificates of deposit and ethical banking, as well as banking deposits Spencer Tierney is a consumer banking writer at NerdWallet. He has covered finances for individuals since the year 2013 with a particular focus on certificates of deposit and other topics related to banking. His work has been featured in The Washington Post, USA Today, The Associated Press and the Los Angeles Times, among other publications. He is located in Berkeley, California.
Aug 11 10th, 2020
Written by Carolyn Kimball Assisting Editor – Los Angeles Times, San Jose Mercury News Carolyn has been employed in newsrooms across the country as a reporter and editor. Her interests encompass personal finance, Sci-Fi fiction novels and absurd Broadway musicals.
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Controlling your finances without having a bank account is possible. However, it isn’t without challenges — and the COVID-19 pandemic has added more.
The economic impact payment may have arrived weeks or months after the other one, in the form of an e-check or prepaid debit card, due to the fact that you didn’t have the speedier payment option of direct payment into an account at a bank. If you’ve visited the store lately you might be asked to pay using a credit or debit card, or with exact change because of the widespread shortage of coins and worries regarding the spread of germs.
A bank account can make life easier when faced with these kinds of situations, as well as other things. To avoid any future problems Consider opening oneor try it again when you’ve had a rejection in the past. Here’s a step-by-step guide for getting started.
Review your financial needs
If you’re among the 14 million Americans who don’t have a banking account within the U.S., you might have a system that is working for you. Perhaps that means using alternative products such as prepaid debit cards and Check cashing companies. Financial advisor Brandy Baxter has assisted clients who used check cashing services to meet practical reasons.
“They prefer to walk in, walk out with cash in hand,” says Baxter, an accredited financial advisor and financial coach, who runs the firm Living Abundantly in the Dallas-Fort Worth region.
Check cashing stores such as Check ‘n’ Go as well as ACE Cash Express may operate extended hours than bank and offer easy approval procedures for cash in a short time. But they do charge high fees, which can range between 1% and 6 percent or more, of the check amount.
Bank accounts can fulfill money needs beyond what checks and prepaid cards services are able to. For instance, their fraud security can restrict the amount you pay if you’re targeted, and a lot of accounts allow you to lock your debit cards remotely if they are stolen.
Once you’ve established working with a financial institution, you’ll have other doors open such as credit cards and small business loans and cheaper alternatives for payday loans may eventually be at hand.
Checking accounts “don’t just aid in saving costs, they’re also the stepping stones to use other financial products,” says David Rothstein the principal of Cities for Financial Empowerment Fund who oversees BankOn the national platform which encourages financial inclusion.
Look for a financial institution that will work for your needs.
If you find banks intimidating or you’ve had difficulty obtaining an account before you can open a bank account, community banks and credit unions tend to be more accommodating than national banks and tend to be mission-driven, for instance, they focus on the financial wellbeing of their communities.
“We’re very accommodating in giving people a second opportunity,” says Pedro Murillo the area branch manager for the San Francisco Bay Area for Self-Help Federal Credit Union. “If an employee comes in to apply for a loan but doesn’t have pay stubs to show, what else (can they) show us? Perhaps a letter sent by (their) employer? We don’t want to surrender.”
Similar to other credit unions, Self-Help requires a person to create a savings account in order to be a member. The minimum amount required to open an account is usually only a few dollars. Then members can apply for additional products, like a credit builder loan.
It is possible to search the internet for the term “CDFI” which stands for Community Development Financial Institution — to . Many require those who join to be part of the same area or state in which the credit union, or bank has branches.
What should you be aware of when applying
To start a bank account, you’ll usually require your Social Security number, one or two forms of identification and money for the first deposit.
It’s typical to apply for two accounts with a bank at the same time that is a checking account and savings account. The checking account gives access to debit cards and bill payment system as well as other services. The savings account allows you to set money aside , and in the best case increase its value by accruing interest.
Banks usually screen applicants on ChexSystems which is a nationwide reporting agency that maintains records of accounts that were closed against a person’s will. If you’ve lost access to a bank account before, you might be rejected by other banks until you settle your ChexSystems file. This could mean paying off debt to the bank or disputing mistakes in the records.
After you’ve cleared your account, think about what banks call it a or a BankOn-approved checking account. A lot of them don’t charge overdraft fees that kick in when you attempt to make a payment that would put your balance in negative.
Opening the correct bank account involves some effort. Once you’ve been approved, having a secure place to keep your money as well as a greater chance to get affordable loans can make it worthwhile.
“To have an account with a bank… can be the core of any financial empowerment program,” Rothstein says.
This piece is written by NerdWallet and first printed in The Associated Press.
The author’s bio: Spencer Tierney is an expert in deposits and certificates of deposit with NerdWallet. The work of Spencer Tierney has been highlighted on USA Today and the Los Angeles Times.
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