How to Start If You’ve Never Known About an Account with a Bank
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How to Get Started If You’ve Never Had A Bank Account
By Spencer Tierney Senior Writer | Certificates of deposit ethics, ethical banking, bank deposits Spencer Tierney is a consumer bank writer for NerdWallet. He has written about the personal financial sector since, with a particular focus on deposits and certificates as well as other topics related to banking. The work he has written for him was featured on The Washington Post, USA Today, The Associated Press and the Los Angeles Times, among others. He is located in Berkeley, California.
Aug 11 10th, 2020
Written by Carolyn Kimball Assigning Editor – Banks Los Angeles Times, San Jose Mercury News Carolyn has worked in newsrooms around the country as a reporter and editor. Her passions include personal finance, sci-fi books and groovy Broadway musicals.
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Controlling your finances without a bank account is doable. However, it could be a challenge — and the COVID-19 pandemic has only increased the risk.
Your economic impact check may’ve been received weeks or even months after the other one, in the form of the form of a check or prepaid debit card because you couldn’t choose the faster transfer option of direct transfer into the bank account. And if you’ve gone to the store lately you may be required to pay by credit or debit card or with exact change because of the widespread shortage of cash and fears regarding the spread of germs.
A bank account will make life easier in these situations, among other situations. To avoid problems in the future, consider opening one — or try again when you’ve had a rejection previously. Here’s a step-by-step guide for getting to the point of starting.
Check your needs for money
If you’re among the 14 million people without a financial institution in the U.S., you might have a method that is working for you. Perhaps that means using alternative products such as credit cards that are prepaid and check cashing services. Financial advisor Brandy Baxter has worked with clients who used check cashing services to meet practical reasons.
“They prefer to go in, walk out with cash,” says Baxter, an accredited financial counselor and financial coach, who runs the company Living Abundantly in the Dallas-Fort Worth region.
Check cashing shops like Check ‘n’Go as well as ACE Cash Express may operate extended hours than bank, and have easy approval processes to receive cash fast. However, they charge an expensive fee that can vary between 1% and 6 percent or more on top of the amount you pay for your check.
Bank accounts can fulfill the needs of money beyond what checks and prepaid cards services will. For example, their fraud protections may limit the amount you’re charged if you’re targeted, and a lot of accounts allow you to lock debit cards remotely in the event of theft.
After you’ve formed an association with a bank, other doors open for you to consider: Credit cards as well as small or auto loans and more affordable alternatives in payday loans may eventually be at hand.
Checking accounts “don’t only help you save expenses; they’re also the first step to using different financial services,” says David Rothstein, principal at Cities for Financial Empowerment Fund who oversees BankOn an online platform in the United States that helps to increase financial inclusion.
Find a bank that will work for you
If you find banks intimidating or had trouble obtaining an account previously the community banks or credit unions tend to be more flexible 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 possibility,” says Pedro Murillo the area branch manager for the San Francisco Bay Area for Self-Help Federal Credit Union. “If someone comes in to request a loan and doesn’t have pay stubs, what else (can they) show us? A letter from (their) boss? We’re not going to give up.”
As with other credit unions Self-Help requires a person to create a savings account in order to be a member. The minimum to open an account is usually just a few dollars. Members are then able to apply for other services such as a credit building loan.
You can search online for the word “CDFI” that stands for Community Development Financial Institutionwhich is a reference to . Many require those who join to be part of the same area or state where the credit union or bank has branches.
What to learn about applying
To start a bank account, you’ll typically need the 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 simultaneously that is a checking account and a savings account. The checking account allows access to a debit card as well as a bill payment system, among 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, a national reporting agency that maintains records of accounts closed at the request of a person. If you have lost access to your bank account in the past, you might be rejected by other banks until you settle the ChexSystems account. This can mean paying off debt to a bank or disputing errors in the records.
After you’ve cleared your account, think about what banks often call the BankOn-approved checking account. Most of them do not charge fees for overdrafts, which kick in if you attempt to pay for something that could put your account in negative.
Finding and opening the right bank account takes some effort. Once you’ve been approved, finding a safe location for your money, and a better chance to get low-cost loans could be worth it.
“To have an account with a bank… is the core for any empowerment financial program,” Rothstein says.
This post originated from NerdWallet and was first published through The Associated Press.
Author bio Spencer Tierney is an expert in deposits in certificates at NerdWallet. His work has been highlighted on USA Today and the Los Angeles Times.
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