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 A Bank Account
Written by Spencer Tierney Senior Writer | Certificates of Deposit and ethical banking, as well as banking deposit accounts Spencer Tierney is a consumer banking writer at NerdWallet. He has written about finances for individuals since the year 2013 with a particular emphasis on deposits and certificates as well as other topics related to banking. He has had his work featured by The Washington Post, USA Today, The Associated Press and the Los Angeles Times, among other publications. He is located in Berkeley, California.
Aug 11 10th, 2020
Edited by Carolyn Kimball Assigning Editor – 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 encompass personal finance, Sci-Fi novels and ridiculous Broadway musicals.
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The management of your money without having a bank account is possible. However, it isn’t without challenges – and the COVID-19 epidemic has only increased the risk.
The economic impact payment may have come in a few weeks or months later than the other one with the form of a check or prepaid debit card because you couldn’t choose the speedier payment option of direct deposit into an account at a bank. If you’ve visited the market recently you may be required to pay with a debit or credit card or in exact cash due to the widespread shortage of coins and concerns regarding the spread of germs.
A bank account will make life easier in these situations, among others. To avoid problems in the future Consider opening oneor try it again after being rejected previously. Here’s a guide to getting to the point of starting.
Check your needs for money
If you’re one of the 14 million Americans without a bank account in the U.S., you might have a system that is working for you. Perhaps that means the use of alternatives such as pre-paid debit cards or checking cashing service. Financial counselor Brandy Baxter has worked with clients who have used check cashing services to meet practical reasons.
“They prefer to walk into their homes, then leave with cash in hand,” says Baxter the accredited financial counselor and financial coach, who runs the company Living Abundantly in the Dallas-Fort Worth area.
Check cashing establishments like Check ‘n Go and ACE Cash Express may operate more hours that banks and offer easy approval procedures to receive cash fast. However, they charge a steep fee, which could range between 1% and 6 percent or more, of the check amount.
Bank accounts are able to meet your requirements for money that are not met by prepaid cards and check cashing services will. For instance, their anti-fraud protections may limit the amount you’re charged if you’re targeted, and a lot of accounts allow you to lock your debit cards remotely in the event of theft.
After you’ve formed an association with a bank, there are other possibilities are open such as credit cards and small business loans and more affordable alternatives for payday loans may eventually be in your reach.
Checking accounts “don’t only help you save expenses; they’re also the first step to using other financial products,” says David Rothstein, principal at Cities for Financial Empowerment Fund who oversees BankOn the national platform which helps to increase financial inclusion.
Choose a lender that fits your needs.
If you find banks intimidating or had trouble obtaining an account previously, community banks and credit unions tend to be more friendly than national banks. They are often mission-driven — for instance, they focus on the financial health of their neighboring communities.
“We’re very accommodating in giving someone another possibility,” 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 an loan and doesn’t have pay stubs, what else (can they) bring to us? An email from (their) employer? We’re not going to be left out.”
Similar to other credit unions, Self-Help will require a person to establish a savings account before they can become a member; the minimum to open an account is typically only a few dollars. Members can then apply for other services such as a credit building loan.
You can look up the term “CDFI” which stands for community development financial institution- to . A lot of them require members to be in the same area or state in which the credit union, or bank has branches.
What do you need to learn about applying
To start a bank account, you’ll generally require to have your Social Security number, one or two identification documents and the money to make your first deposit.
It is common to open two accounts with a bank at once that is a checking account and savings account. The checking account grants access to a debit card, bill payment system and other services, while the savings account lets you put money aside , and in the best case it will grow through making interest.
Banks generally screen potential applicants using ChexSystems, a national reporting agency that maintains records of accounts closed at the request of a person. If you have lost access to a bank account previously and you’re not sure if you’ll be denied by different banks until you pay off your ChexSystems record. This could include paying off debt to a bank or disputing errors in the records.
Once you’re cleared, consider what banks often call the BankOn-approved checking account. Many of these don’t charge overdraft charges which are charged if you try paying for something that could put your account in negative.
Opening the correct bank account involves some effort. But once you’re approved, finding a safe location for your money, and a better likelihood of getting low-cost loans could be worth it.
“To have an account with a bank… can be the foundation to any money-empowering initiative,” Rothstein says.
This post originated from NerdWallet and was first printed by The Associated Press.
About the author: Spencer Tierney is an expert in the field of deposits in certificates at NerdWallet. The work of Spencer Tierney has been highlighted by USA Today and the Los Angeles Times.
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