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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 an Account with a Bank
Written by Spencer Tierney Senior Writer | Certificates of deposit ethics, ethical banking, bank deposit accounts Spencer Tierney is a consumer writer for banking at NerdWallet. He has written about the personal financial sector since, with a particular focus on certificates of deposit and other banking-related topics. His work has been featured on The Washington Post, USA Today, The Associated Press and the Los Angeles Times, among others. He is located in Berkeley, California.
Published Aug 11, 2020 6:46AM PDT
Edited by Carolyn Kimball Assisting Editor Banking Los Angeles Times, San Jose Mercury News Carolyn has worked in newsrooms around the across the country as a reporter as well as an editor. Her interests are personal finances, science-fiction novels and ridiculous Broadway musicals.
The majority or all of the items featured on this page are from our partners who compensate us. This impacts the types of products we feature as well as the place and way the product appears on the page. But, it doesn't affect our opinions. Our opinions are entirely our own. Here is a list of and .
Managing your money without the need for a bank account is doable. However, it isn't without challenges -- and the COVID-19 pandemic has only increased the risk.
Your economic impact check may've come in a few weeks or months later than others' did with a check or prepaid debit card since you weren't able to choose the speedier transfer option of direct transfer into an bank account. If you've visited the market recently you might be asked to pay with a credit or debit card or in exact change due to the widespread shortage of cash and fears over germ transmission.
The opening of a bank account can make life more convenient in these circumstances and many other situations. To avoid any future problems Consider opening oneor revisiting after being rejected in the past. Here's a guide to getting going.
Assess your money needs
If you're one of the 14 million people without a bank account in the U.S. You may have a system that is working for you. It could be that you are the use of alternatives such as credit cards that are prepaid and Check cashing companies. Financial advisor Brandy Baxter has assisted clients who used check cashing services for practical reasons.
"They preferred to enter and leave with cash," says Baxter who is a certified financial advisor and financial coach who manages the company Living Abundantly in the Dallas-Fort Worth area.
Check cashing shops like Check 'n'Go and ACE Cash Express may operate for more hours that banks, and offer easy approval procedures to receive cash fast. But they do charge a steep fee, which can range from 1% to 6 percent, or even more, of the check amount.
Bank accounts can meet money needs beyond what pre-paid cards or check cashing services can. For instance, their anti-fraud protections can limit what you pay if you're targeted, and a lot of accounts let you lock debit cards remotely when stolen.
>> Tips on spotting fraud and scams • Learn
After you've formed an association with a bank, other doors open such as credit cards as well as small or auto loans and other less expensive alternatives to payday loans may eventually be within your reach.
Checking accounts "don't only aid in saving costs, they're also the foundation for using different financial services," says David Rothstein director of Cities for Financial Empowerment Fund, who manages BankOn the national platform that encourages financial inclusion.
Find a bank that will work for your needs.
If you find banks intimidating or you've had difficulty obtaining an account before the community banks or credit unions are generally more accommodating than national banks and often have a mission -- for instance, they focus on the financial health of their surrounding communities.
"We're extremely lenient when it comes to offering an applicant a second chance," 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, is there anything they (can they) provide us? Perhaps a letter sent by (their) boss? We don't want to give up."
Similar to other credit unions, Self-Help will require a person to create a savings account in order to become a member; the minimum required to start an account is usually a few bucks. Then members can apply for additional products such as a credit building loan.
It is possible to search the internet for the word "CDFI" which is a reference to community development financial institution- to . Many require those who join to be located in the same state where the credit union or bank has branches.
What to know about applying
To open an account, you'll typically need your Social Security number, one or two forms of identification as well as money for your first deposit.
It is common to open two accounts with a bank simultaneously: a checking and a savings account. The checking account allows access to debit cards, bill payment system and other features, while the savings account allows you to set funds aside and, in the ideal case increase its value by making interest.
Banks usually screen applicants on ChexSystems which is a nationwide reporting agency that maintains records of closed accounts against the will of an individual. If you've been denied access to an bank account in the past and you're not sure if you'll be rejected by different banks until you pay off the ChexSystems account. This could include the payment of debts to a bank or disputing errors in the records.
Once you're cleared, consider what banks call it the BankOn-approved checking account. Most of these do not charge fees for overdrafts, which occur if you attempt paying for something that will put your balance in the negative.
Opening the correct bank account involves some effort. However, once you've been approved finding a safe location for your money and a better chance to get low-cost loans can make it worthwhile.
"To have an account with a bank... is the foundation of any financial empowerment initiative," Rothstein says.
This post is written by NerdWallet and was first released in The Associated Press.
Author bio Spencer Tierney is a writer and NerdWallet's official authority on certificates of deposit. He has had his work highlighted by USA Today and the Los Angeles Times.
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