With so many financial institutions to choose from, choosing the right bank can be confusing. but whichever company you ultimately choose to go with, be sure that it is insured by the Federal Deposit Insurance Corporation (FDIC).
To open an account, you need the following:
●a form of ID, for example, a foreign passport
●proof of address,
●your Social Security number (SSN).
You may be able to open an account online with some banks although you will still need your SSN and activate the account at the bank’s branch in person.
Banks banking disclosures will include:
-The interest rate and annual percentage yield of the bank accounts
-Bank charges etc
-Compare the following most common bank account features while deciding what bank to use
which includes the interest rates, interest compounding, annual percentage
●Interest Rate –expressed as a percentage, it is the amount of interest due per period say for a full year. You should inquire on the interest rate, starting interest rate after you open the account and the relationship between your bank account balance and interest. You will be told when you will start earning interest either from your ledger balance or from collected balance.
●Interest Compounding– When your money earns compound interest in a bank account, the interest earned is added to your balance on a regular basis. You will be told how often the interest is compounded.
●Annual Percentage Yield (APY) – Expressed as a percentage, it reflects the amount of interest you will earn for each deposit made on a yearly basis. You should know the minimum balance required before you can start earning interest.
Basically, there are five types of bank accounts you need to know:
● Checking Accounts (with or without an ATM card)
When you deposit money into a checking account, your bank will give you checks (in a small book form) giving you quick, convenient, and frequent access to your money. You can write checks to purchase items, pay bills, or to withdraw. You will be charged various fees on your account such as when you order a check, balance inquiry fee etc. Find out the fees your bank will charge. A regular checking account (at most banks) will not draw interest, although some will offer special rates or special accounts known as negotiable order of withdrawal accounts that do pay interest. Consider all the fees for the both types of checking accounts irrespective of the payment of interests.
●Money Market Accounts allows you to write checks and deposit money and will give a higher interest rate more than a checking or savings account does but requires a higher minimum balance before you start earning interest. You are limited to six transfers in any month, including only three checks written in a month's time. You will be provided the bank charge s for this type of account.
●Savings Accounts Cash kept in a savings account is less accessible than cash kept in a checking account, which you generally can withdraw without restrictions. Savings account can be passbook savings or statement savings. For passbook savings, you receive a record book in which your deposits and withdrawals are entered while for a statement savings account, you will be regularly mailed a statement that shows your withdrawals and deposits.
●Certificate of Deposit (Time Deposits) - holds money for a fixed term, usually from a few months to a few years. This account usually offers the highest annual percentage yield; the longer the term you commit your cash to, the higher the interest rate. Open this account only with money you won’t need immediately, because withdrawing money before the end of the term carries a penalty. Some banks will allow you to withdraw the interest before maturity without a penalty. You need to inquire the maturity date of the account, its renewability features, and the grace period, if any, after the maturity period before automatic renewal of your account.
●Basic or No Frill Banking Accounts - offers a limited set of services for a low price. This account will give you a convenient way to pay bills and cash checks for less than you might pay without an account. They are checking accounts, but you have a limited number you can write and the number of deposits and withdrawals you can make. You are not paid interest for this account. Compare basic and regular checking accounts in terms of low fees or low minimum balance requirements.
●Credit Union Accounts -Credit unions offer you accounts similar to accounts in other depository institutions, but with different names. Rather than checking, they have "share draft" accounts, rather than savings, "share" accounts, and rather than certificate of deposit, "share certificate" accounts.
For each bank, you need to compare:
-payment of a flat monthly bank fee
-balance inquiry fee
-bank charges when your balance drops below a specifies amount
-bank charges for each deposit and withdrawal made on your bank account when you walk into the bank or use the ATM either your banks or another banks’
-bank fees on a checking account when you order checks and for each check you write
-bank fee when you request the bank to stop payment on a check you have written
- bank fees reduction or waive when you agree to directly deposit your paycheck or government payments, like a social security check?
-bank charge for closing an account after you have just opened it and the time the fee will be imposed
-bank charge when you have insufficient funds or write a check and for deposition of a check written by another person
It is important to compare the various bank account features while choosing a bank. The account you open will depend on what your needs are.