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Aug 2, 2019

Requirements for Opening a Checking Account

Banking/Personal Finance, Digital Banking, General Information

man and woman sitting in chair looking at computerIf you haven’t previously opened up a checking account, you’re likely curious about what’s required of you. The good news is that starting a new account is simple. There are only a few things you’ll have to bring in and do in order to get the ball rolling. But what exactly? Don’t worry, we’ve got you covered. Read on to discover the list of requirements you should be aware of, so you show up ready to set up shop.

Requirements for Opening a Checking Account

Are you Eligible?

Before you can begin, it’s vital that you confirm that you are eligible to open a free checking account.To do so on your own, you need to be considered a legal adult. Therefore, you must be 18 years or older.

  • If you’re a minor under the age of 18, you can open up a joint checking account with your legal guardian acting as the account’s co-owner.

However, some credit unions do allow minors specific accounts in order to teach them about savings, budgeting, and the other basics of banking 101. Before you go, query your credit union about its specific eligibility requirements; they may legally refuse you banking services on the following grounds:

  • A history of past-due payments or overdrafts
  • A criminal history, especially financially associated crimes
  • Lack of U.S. citizenship
  • Poor credit score

Pre-Application Checklist

There are different types of checking and savings accounts. You should invest some time in performing research on what you specifically need out of a checking account before you ever step foot in a credit union.

  • Ascertain Your Needs – Naturally, your financial situation and particular banking needs differ from those around you. You’ll want to open a checking account that meets your personal desires or banking habits. To better gauge this, ask yourself the following:
    • How much money do you have?
    • How much money do you want to keep in the account?
    • What is the purpose of the checking account?
      1. Deposit work checks
      2. Write checks
      3. Transfer money
      4. Pay bills electronically
      5. Daily purchasing
    • Do you care more about accessibility or not paying fees?
    • Will you be banking online, or do you need a physical location close to your spheres of life?
    • Do you travel often and will you need access to ATMs on the road?
    • Does your account balance need to be earning dividends?
    • Do you qualify for special accounts?
      1. Military
      2. Seniors
      3. College Students
  • Will access to the account be shared? – If you and your spouse share personal finances, then a joint checking account is the route you want to take. Doing so is simple, just select the option for joint checking and then give the identifying information for both co-owners.
  • Weigh your banking options – Financial institutions will naturally want to compete for your account. One might offer a better or more incentivized type of checking account or one more suited to your specific needs. In order to compare and contrast some costs and features, you’ll want to consider:
    • Costs – The various costs of opening and maintaining an account
    • Features – The benefits of using their banking services
      1. Overdraft protection
      2. Check-writing enabled
      3. Limits on transaction numbers
      4. Electronic banking availability
    • Requirements – The basic tasks you must complete to use the services
      1. Minimum balance
      2. Direct deposit
      3. Minimum opening deposit

Know the Difference Between a Savings and Checking Account

In the past, you may have heard people use the term savings account and checking account interchangeably. This is likely because they are fairly similar accounts and people regularly link the two out of convenience. That said, they are not the same thing and you should be aware of their differences.

  • Checking account – A type of credit union deposit purposefully designed for everyday use and daily fiscal transactions. A checking account is used for bills, writing checks, and ATM withdrawals.
    • Typically provides you with both checks and a debit or atm card
    • It earns small dividends
    • Can be used at any time so long as there is money in the account
  • Savings account – Are not intended for daily transactions but are instead meant to sit around accruing dividends over time. Savings are not meant to be touched regularly, so there is a monthly withdrawal limit in order to protect the account.
    • Pays dividends on the account
    • Allows for 6 withdrawals per month, barring ATM and in-person withdrawals
    • Meant to be used for emergencies, future spending, or splurge items that require a large lump sum

Ideally, you’ll want to open both a savings account for long-term financial planning and a checking account for your daily usage. Partitioning your money is a wise way to budget and protect yourself from unexpected financial disasters. Also, many credit unions will waive monthly fees if you link your checking to your savings.

What You’ll Need to Bring

These days, credit unions will typically give you the option to set up an account either online or in person at their nearest branch. Whatever option you select, you’ll need to bring some materials in order to prove your identification and financial status. Bring the following 3 items:

  • Proof of identification – If you decide to open an account in person, you’ll have to provide two distinct forms of ID. Examples include:
    1. State ID card
    2. Passport
    3. Birth Certificate
    4. Driver’s License
    5. Social Security Card
  • If you want to open an account online, you’ll have to give the following information:
    • Social Security Number
    • Date of Birth
    • Number on a Driver’s License or Government-issued ID
  • Proof of residence – You’ll need to provide proof that you are living in the area, especially for local credit unions. This typically involves bringing a bill, lease or piece of mail with your name and current address on it.
  • Initial deposit – Often, a minimum initial deposit for your first checking account is a figure ranging between $25 and $200. For checking accounts that pay dividends, you may need to put in a larger figure.

Getting Started

To get the process started, you’ll need to fill out the application. For example, to apply to Mission Federal Credit Union online you’ll need to:

  • Select your branch location:
    • Bressi Ranch
    • Carlsbad
    • Carmel Mountain Range
    • Carmel Valley
    • Chula Vista/East Lake
    • Chula Vista/Telegraph Canyon
    • Chula Vista/Terra Nova
    • Clairemont
    • College Grove
    • El Cajon
    • Encinitas
    • Escondido
    • Escondido Auto Parkway
    • Imperial Beach
    • La Mesa
    • Linda Vista
    • Little Italy
    • Mira Mesa
    • Mira Mesa West
    • Mission Hills
    • Mission Valley
    • National City
    • Oceanside
    • Poway
    • Rancho Bernardo
    • Rancho San Diego
    • San Carlos
    • San Marcos
    • Santee
    • Scripps Ranch
    • Solana Beach
    • Vista
  • Select your eligibility:
    • San Diego county resident
    • San Diego county worker
    • San Diego county student
  • Select your services:
    • Easy Checking
    • Smart Checking
    • Savings
    • Money Market
    • High Yield Money Market
  • Fill in your personal information:
    • SSN
    • First, middle, and last name
    • Date of Birth
    • Mother’s maiden name
    • Citizenship
    • Address
    • Zip
    • City
    • State
    • Email
    • Phone number
    • ID info
    • Employment status

Once this is all filled out, the credit union will run a credit check on your criminal and banking history before they can approve the account. If approved, you can move on to the next step of the process.

Next Steps

Upon approval, you’ll be sent or given documents bearing your new routing number and account number, amongst other critical account information. After receiving this you’ll need to:

  • Sign the documents and card – Sign both your paperwork and your card to verify and confirm. After, the signature on the card will be matched to your signature each time you deposit or write a check, so be sure to sign your “standard.” Some branches will allow an electronic signature, but others will require your physical presence to complete the process.
  • Pay the initial deposit – To get the account up and running, you’ll need to make the initial payment. Typically, it’ll take a few days before funds become available for checks, withdrawals, or purchases.
  • Receive your cards and checks – After the application is in and approved, the deposit made, and the account set up, you’ll be sent checks, deposit slips, and a debit or ATM card. You’ll have to call the number on the back of the card and go through an automated process in order to activate it for spending purposes.
  • Set up direct deposit – You can coordinate with your work to have your salary directly deposited into your account. This allows you to avoid fees and can result in other benefits. Speak to payroll at work if you want to pursue this convenient option.

Benefits of a Checking Account

Setting up a checking account with Mission Federal Credit Union is quick and easy. Besides that, there are several distinct reasons why you should strongly consider setting up a checking account if you haven’t already. Reasons include:

  • Financial Security – Simply put, keeping large amounts of cash at home is reckless folly. That “safe spot” beneath the mattress won’t protect your money from robbery, fire, or other natural disasters. Having your money kept safe at a federal credit union gives you peace of mind and ensures easy access to various branches or ATMs when you do need cash.
  • Easy checking – If you don’t have a bank account, how do you plan on cashing your paycheck from work? The only way it’s possible to cash a check without a bank account is to go to the specific credit union from whence the check was issued. Even then, the credit union could charge a cashing fee for a non-customer. Although check-cashing services are available, you have to pay outrageous fees and costs to do so. Simply opening up an account mitigates this problem.
  • Easy way to pay your bills – Your checking account pays for all of your daily purchases including:
    • Rent payment
    • Utilities
    • Cell phone bill
    • Car Insurance
  • These monthly bills are inevitable, and you need an easy way to pay them. With a bank account, you can either write checks or set up automated bill payment for extra convenience.
  • Smart budgeting – All account activity is tracked up-to-the-minute. This allows you to monitor your spending habits and adjust accordingly to goals or set budgets. It gives you a snapshot of how you spend your money and where you could be saving more. This fine-tuning process allows you to create a smart budgeting system over time.

What Are You Waiting For?

There are precious few requirements for opening up a checking account. It’s simple and easy. You’ll need:

  • Proof of ID
  • Proof of residency
  • The initial deposit

Bring these things and you’ll be well on your way. So, what are you waiting for? Reach out today and the friendly staff at Mission Federal Credit Union will be happy to help you get started.

The content provided consists of opinions and ideas and should be used for informational purposes only. Mission Federal Credit Union disclaims any liability for decisions you make based on the information provided. References to any specific commercial products, processes, or services, or the use of any trade, firm, or corporation name in this article does not constitute endorsement, control or warranty by Mission Federal Credit Union.

 

Sources:

FDIC. Deposit Insurance FAQs.
https://www.fdic.gov/deposit/deposits/faq.html

Investopedia. Checking Account.
https://www.investopedia.com/terms/c/checkingaccount.asp

Caldwell, M. The Balance. What is a Checking Account? (2019).
https://www.thebalance.com/checking-accounts-2385969

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