If you’ve got a job, or have money coming in, you need a checking account. For many people, they first enter the world of finance as a teenager, by choosing a bank (often one where their parents bank) and opening a checking account. It gives them a safe place to store their money, a measure of independence, and a feeling of responsibility. Plus, it cultivates good habits and introduces them to the idea of budgeting and tracking their expenses. Your first bank might be a community bank, which account for 99.5% of all banks in the United States in and over 600 counties, those are the only banking locations that have a physical presence. Let’s discuss other reasons why a checking account is so important, what you need to do to open one, and what kind of bank you should look at (if you have the option).
Why Do I Need a Checking Account?
Any adult needs a checking account. It’s likely where your employer will deposit your paychecks, the place your bills are drawn from, and where you can keep an eye on your cash flow. It’s also a convenient way to budget and keep track of your expenses. Essentially, everything’s in one place. And with online banking, you often don’t even have to go to the bank to deposit checks or transfer money to other accounts (or people).
If you have a checking account, you can also order checks, which most places take. Though checks are rarer these days, thanks to credit and debit cards, they’re often used for donations or bills. They tend to be more secure and you don’t have to worry about convenience fees associated with using a credit or debit card.
What Do I Need to Apply For a Bank Account?
If you’re younger and looking to get a checking account, you usually have to be at least 11 and have a joint owner on the account (usually a parent or guardian). The typical age for most young people to open a checking account is between 14 and 16 when they start getting a summer job. If you’re under 18 though, you’ll need a co-owner.
Identification is also key. You’ll need a valid, government-issued photo ID — so if you can’t drive, that might be a state ID card (which you can get at the DMV) or your passport. Otherwise your driver’s license will suffice.
You’ll also be asked to fill out some paperwork that will inevitably ask personal details — date of birth, social security number, and contact information, like address, phone number, and e-mail address.
If you happen to be opening a joint account — for example, if you’re opening an account with your partner — you’ll need the ID information for that person as well.
Depending on the bank, you may need to bring some money to open the account in the first place and this can range anywhere from $25 to $100, for a generic checking account. Be sure to consult with the bank before going to save yourself a trip.
What Kind of Banks are Available?
The type of bank you’ll be using is a retail bank — one where you can open a checking and savings account, but it’s not being used for any commercial or investment use. There are big national and international banks, like JP Morgan Chase, Wells Fargo, Bank of America, and so on, but there are also smaller community banks that are often found more localized in smaller communities. (Think Key Bank or Community Bank in New York State.)
These community banks have almost $5 million in assets and over $3 trillion in loans to consumers, small business owners, and members of the agricultural industry, says the Independent Community Bankers of America. They provide an important service to underserved communities or communities that don’t have easy access to a local national bank.
If you don’t have a checking account, but you do have money coming in, it’s important to consider opening a checking account. It’s a vital part of your financial plan and your bank can offer you a number of other services as well, so establishing that relationship is a smart idea.