When the time comes to open your first bank account, the process might seem daunting. From figuring
out the type of account you need, to where you will open your account, and what you need the account
to do for you, there are plenty of choices you need to make.
However, by answering these questions in our two-part series, you can simplify the process—and
opening your first bank account will be a breeze.
Why Should I Open a Bank Account?
Whether you’re still in school and haven’t previously had a bank account or relied on banking
alternatives like check cashing and prepaid cards, bank accounts offer several benefits.
Security Benefits
If you’re used to using cash or prepaid cards, you don’t have many protections working in your favor if
you suffer a loss. Losing your wallet means your cash and debit card are gone, likely for good. With a
bank account, you have legal protections that can help protect you from loss.
For example, if you lose your debit card, the Electronic Funds Transfer Act (EFTA) can limit your liability.
While cash may be gone if you lose it, a debit card can protect your money in a way your wallet cannot.
Money on deposit at a bank or credit union is also typically insured, unlike cash in your wallet. If you
have an account at a bank, your deposits are protected by FDIC insurance or NCUA for Credit Unions for
up to $250,000 per depositor, for each account category, in case your bank or credit union fails.
Financial Relationship Benefits
One of the most significant benefits of opening your first bank account is starting a financial relationship
with your bank.
A bank account opens the gateway to future financial products to guide you through every stage of life,
from credit cards and loans, to financial support should you choose to start a business. Your bank
account also supports other financial capabilities like funding retirement accounts, receiving your
paycheck by direct deposit, cashing a check without being charged a fee for doing so, or paying your
household bills safely and automatically online.
Where Should I Open My Bank Account?
The next step is deciding where to open your account. Brick-and-mortar banks, credit unions, and online
banks are some of the most popular choices. But how do you decide which is the best fit for your needs?
Brick-and-Mortar Banks
These banks range from the big names you see in cities across America to smaller regional banks specific
to certain states and locales. A brick-and-mortar bank could be an excellent choice for someone who
values visiting a branch in person and having a wide network of fee-free ATMs at other bank branches in
their community.
Credit Unions
Credit unions are membership-based financial institutions. When you join one, you become a part
owner. You usually have to have a professional relationship with an eligible company or organization to
qualify for membership.
Online Banks
Online banks typically do not have a physical location you can visit. If you prefer a mobile or fully digital
experience, you may find that an online bank gives you everything you need—from fee-free accounts
with no minimum balance, to waived ATM fees and mobile check deposits.
Next month, we will look at the next steps including determining the best account, documents needed
to open the account and beyond! West Gate Bank offers a variety of options for checking and savings
accounts. You can learn more on our website at westgate.bank, or call our Bellevue location.
