A bank account is one of the most basic ways to keep your money safe as well as organize your finances. There are numerous types of bank accounts so let begin.
Checking Account
The first account you’ll want to open is a checking account. This account will allow you to withdraw money at will as well as allow you to write checks for certain expenses which will draw funds from this account. When selecting a banking establishment to open a checking account there are a few things to look for. Signs of a good checking account are lack of fees, availability of ATMs, no minimum balance, and interest rates. You should look to find the right mixture of these factors for your particular financial situation.
Savings Account
The other major account you need to be aware of is a savings account. These accounts are distinct from checking accounts in that they generally don’t offer checking, auto bill pay, and having higher interest rates. You will be able to accumulate more interest over the course of the year at the cost of having your money slightly less available on short notice.
If you’re earning more money then you spend in a month it is worth looking into a savings account. Putting portions of your excess income into a savings account affords you the benefit of your surplus cash earning a bit more interest than the money stored in a checking account, without locking it up for a longer period of time.
One of the most important things to look for in a Savings account is a competitive interest rate. You should be earning enough to at least keep up with the annual percentage of inflation. You should also try to find a bank which offers an account with no fees (monthly/annual maintenance fee). It’s not usually an issue with major banks these days, but free online banking can provide additional benefits.
Writing a Check
Whether you have a checking account or not, writing a check is something you should know how to do. This is helpful for certain expenses such as rent and other major purchases. There are a few fields on a check which need to be filled out in order to properly cash it. These are detailed below.
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Sorting through all the banks in your area can be daunting. Fortunately mint.com will aid you in the process. It will analyze your financial situation and recommend banks that will save and earn you the most money. On top of the convenience of easily comparing all of the major banks in one place the website is completely free to use.