How to open my First Account

Why Open an Account?

You probably keep your money in a jar, plastic bag, or the floor of your room. But these aren’t exactly the safest places to store your hard-earned cash. Keeping your money at a bank or credit union is easy and safe, and you can view your account totals online.

Another benefit of opening an account is that your money can grow with interest. Basically, a financial institution pays you a percentage of your total balance just for keeping money in your account. This means that your money is growing little by little without you having to do a thing.

You'll need to have a joint account or custodial account with a parent or guardian until you become an adult, but you can use this account to prepare you for complete control later. And you may be able to get a debit card. When you buy things with the card, the amount will automatically be subtracted from your account. In other words, you won’t have to worry about carrying around cash, you’ll simply need to be aware of how much is available in your account.

Account Types

You’ll most likely choose between a checking and savings account to start with.

Checking Account: This is an account that lets you buy things with a debit card. When you use the debit card to buy something, the money will automatically come out of your account. That means you don’t need to carry cash around.

Savings Account: This account helps you save money and earn interest. Basically, a bank or credit union pays you a small percentage of the money in your account. You earn money without having to do a thing! But, if you want to get money out of the account, you have to go to an ATM or your financial institution.

Types of Accounts

Banks and credit unions offer different types of accounts to meet different needs. Some of the most common account types include:

• Checking Account: With this account, you can spend money directly with a debit card or check. You can also make withdrawals if you need cash.
  
  
• Savings Account: This account (surprise surprise) is all about saving. Savings accounts offer interest. You can’t spend money from this account directly, but you can transfer funds to another account or visit a branch or ATM to withdraw cash.
  
  
• Money Market Account: These are like a mix between a savings account and a checking account. They are interest and some checking options.
  
  
• CD (Certificate of Deposit) : A CD is a long term savings option that offers higher interest rates than a regular savings account. In exchange for those higher interest rates, you agree to leave the money in the bank or credit union for a certain amount of time, usually a few years.

What You Need to Open an Account

Opening an account at a bank or credit union is easy. You’ll usually need some money to put in, a parent or guardian, and an ID (such as a social security card or birth certificate). Some banks or credit unions let you sign up online. You may prefer to go into a branch so you can talk to the tellers. They can give you tips for how to get the most out of your new account and you can ask them questions.