Opening a first bank account is an important stop towards independence but can be a little daunting for young adults who are unfamiliar with the banking system. The good news, though, is that it’s really not that complicated a process, especially if you follow these simple guidelines:
Decide what type of account you want:
Checking accounts (called current accounts in the UK) tend to be used for general day-to-day money management. They usually come with a cash card to enable you to withdraw money from ATMs, or you may qualify for a debit card which has the added bonus of enabling you to purchase goods in stores or over the Internet. Additionally, you may qualify for an overdraft, assuming that you are over 18 and pass the bank’s credit score. (A credit score is where the bank takes certain information about you and makes a call on whether it’s prepared to lend you money). Overdrafts are particularly useful for students who have high living costs but don’t yet have a full-time job, although caution has to be exercised in their usage.
Another option is to open an instant access savings account. Savings accounts tend to offer a better interest rate, and you may also get a cash card. However, they are much more basic accounts and, normally, people will want to open a checking account for their day to day banking and a savings account for any money that’s left over at the end of the month.
Interest rates / quality of account features:
The key things that you want from a checking account are things such as a good overdraft offer, low charges, and the payment of interest to you when you’re in credit. You need to assess the various accounts that are on offer and make sure that you’re getting a good deal.
Location and cash machine availability:
Often the choice of which bank to open an account with will be influenced by which banks have branches near where you live, work or study, and how good a network of cash machines they have. For students, the presence of an on-campus branch can be a big selling point, even in this Internet age.
Customer service / word of mouth:
If you were choosing a dentist, you would probably tend to go with a dentist that you’d heard good reports about. It’s the same with banks. If you’ve heard horror stories about the length of queues or unpleasant staff, then you’re unlikely to feel comfortable going with that bank. And if you’ve heard good things, it will give you added confidence that banking with them is going to be a positive experience. Listen to the views of friends and family and factor their feedback into your ultimate choice.
Range of ways of interacting with the bank:
Many people really value the ability to be able to transact via Internet Banking or Mobile Phone Banking but the ability to visit a branch and speak face-to-face with an adviser is also still greatly valued. If these choices are important to you, then make sure that you enquire about the range of ways that the bank allows its customers to carry out their banking.
What happens once I’ve selected a bank?
Having researched options and made your decision on which bank and which account to go with, the final task is to apply for the account. Typically, you will be asked to supply some standard bits of information (such as name, address, contact details, and existing financial details) and then the bank will confirm whether your application has been accepted. You will then need to provide some supporting documents to confirm your address and identity. It’s therefore a good idea to bring items such as your driving licence, passport, utility bills, etc, with you as it may help to speed up the process of getting the account opened. It’s often worth phoning the bank in advance, or checking their website, to see what documents will be required. Hopefully, having completed this process, your new bank account will be opened and your card posted to you. You will then be in a position to start enjoying the benefits of having a bank account for the first time!