What is a Checking Account

A checking account is a financial tool offered by most banks that allows you to quickly and easily deposit and withdraw funds from a secure location. While a checking account isn’t required and there are still millions of people without one, having a checking account can give you access to a wider variety of financial services and products. Did you know that in many cases a checking account is necessary just to get approved for a loan? Before issuing loans or entering into other long-term financial agreements like Rent-To-Own, most lenders need to be able to verify that you have a regular source of income and will use the checking account information provided on your application to ensure that you will be able to make the payments outlined in your agreement. Thanks to the multitude of online financial institutions, opening a checking account has never been easier. However, with so many options to choose from, you may want to first consider which type of checking account is right for you.

Choosing the Right Checking Account

Before applying for an account at any institution you should carefully consider the following :

MINIMUM BALANCE REQUIREMENT Pay attention to the minimum balance requirements for the account, and be sure that you will be able to maintain it. Never choose a specific checking account if you cannot maintain the minimum balance. If you’re unable to maintain the minimum balance, you’ll end up owing the bank a fee every month.

TRANSACTIONS LIMIT Certain banks limit the number of debit, checks or bill pay transactions that can be made each month. Be aware of these limits and be sure that they are aligned to your spending habits. If the numbers seems too restrictive, consider opening an account somewhere else.

MONTHLY FEES Always consider the monthly service fee and overdraft fees charged by the bank for each account. Credit unions often offer lower fees. Also keep in mind that many banks have monthly service fees if you have automatic deposit or meet a minimum number of monthly transactions. However, fee-free checking accounts do exist.

Applying for a Checking Account

In order to complete an application, you’ll need the following documents :

DOCUMENTS FOR IDENTIFICATION: If you wish to apply online, you’ll need to provide your SSN, DOB and a government-issued ID like a driver’s license or passport. If you are not a U.S. citizen, you may be able to open an account using an identification issued from your home country. If you’re applying for a joint account, both account holders will need to provide identification documents.

DOCUMENTS FOR PROOF OF ADDRESS: You can use a rental agreement, vehicle registration, or utility bill with your name and address on it.

Completing The Application Process

Once you have found a checking account that's right for you, visit the bank’s website or nearby branch to submit the application form and the required documents. The Bank will then review your documents, and if you are approved, you will receive an Account Number and Routing Number which you can begin using to help you secure a Rent-To-Own Agreement.

Resources

1. https://www.myfico.com/credit-education/whats-in-your-credit-score/
2. https://www.thebalance.com/how-your-credit-score-influences-your-interest-rate-960278
3. https://www.privacyguard.com/bad-credit-score-explained.html
4. https://www.myfico.com/CreditEducation/FactsFallacies.asp
5. https://www.selflender.com/blog/insufficient-credit-history-what-to-know.html
6. https://money.howstuffworks.com/personal-finance/for-new-adults/how-to-get-loan-without-bank-account.htm
7. https://www.fdic.gov/householdsurvey/