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How to Begin If You’ve Never Known About an Account with a Bank

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How to Begin If You’ve Never Known About A Bank Account

Written by Spencer Tierney Senior Writer | Certificates of Deposit and ethical banking, as well as banking deposits Spencer Tierney is a consumer bank writer for NerdWallet. He has covered personal finance since 2013, with a particular emphasis on deposit certificates and other banking-related topics. His work has been highlighted on The Washington Post, USA Today, The Associated Press and the Los Angeles Times, among other publications. He is based in Berkeley, California.

Aug 11 Aug 11, 2020

Editor: Carolyn Kimball Assisting Editor – Banking Los Angeles Times, San Jose Mercury News Carolyn has been employed in newsrooms across the across the country as a reporter as well as an editor. Her interests encompass personal finance, Sci-Fi fiction novels and groovy 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 pandemic has only made it worse.

Your economic impact check may’ve come in a few weeks or months later than other ones with the form of a check or a prepaid debit card because you couldn’t choose the speedier delivery option of direct transfer into a bank account. If you’ve been to the shop recently you might have been asked to pay by debit or credit card or with exact cash due to a nationwide shortage of coins and worries over germ transmission.

A bank account can make life easier in these situations, among others. To avoid problems in the future you should consider opening a bank accountor try it again if you’ve been rejected previously. Here’s a step-by-step guide for getting going.

Review your financial needs

If you’re among the 14 million adults who don’t have a bank account in the U.S., you might have a method that is working for you. Maybe that includes the use of alternatives such as pre-paid debit cards or check cashing services. Financial advisor Brandy Baxter has assisted clients who have used check cashing services for practical reasons.

“They prefer to walk into the store, and leave with cash in hand” says Baxter the accredited financial counselor and financial coach who manages the firm Living Abundantly in the Dallas-Fort Worth region.

Check cashing stores such as Check ‘n’ Go and ACE Cash Express may operate longer hours than banks, and have simple approval processes to get cash quickly. But this comes with high fees, which can range between 1% and 6 percent or more, of the check amount.

Bank accounts can fulfill requirements for money that are not met by pre-paid cards or check cashing services are able to. For instance, their fraud protections may limit the amount you pay if you’re victimized. Many accounts allow you to lock debit cards remotely if they are stolen.

After you’ve formed working with a financial institution, you’ll have other possibilities are open such as credit cards, auto or small business loans and more affordable alternatives in payday loans may eventually be at hand.

Checking accounts “don’t just aid in saving costs; they’re the foundation for using other financial products,” says David Rothstein the principal of Cities for Financial Empowerment Fund who oversees BankOn an online platform in the United States that helps to increase financial inclusion.

Look for a financial institution that fits you

If you are afraid of banks or had trouble obtaining an account previously, community banks and credit unions tend to be more friendly than national banks. They tend to be mission-driven, for example, they are focused on the financial health of their neighboring communities.

“We’re very lenient at giving someone another possibility,” says Pedro Murillo director of the branch in the San Francisco Bay Area for Self-Help Federal Credit Union. “If an employee wants to apply for an loan and doesn’t have pay stubs, do they have anything else (can they) bring to us? A letter from (their) company? We don’t want to give up.”

Similar to other credit unions, Self-Help will require a person to create a savings account in order to be a member. The minimum to open an account is typically only a few dollars. Members are then able to apply for other services such as a credit building loan.

It is possible to search the internet for the term “CDFI” — which stands for community development financial institution- to . A lot of them require members to be part of the same area or state in which the credit union or bank has branches.

What should you learn about applying

To open an account, you’ll generally require your Social Security number, one or two forms of identification as well as money for your first deposit.

It’s typical to apply for two bank accounts at once that is a checking account and an account for savings. The checking account gives access to debit cards and bill payment system as well as other services. The savings account allows you to set money aside , and in the best case, grow by making interest.

Banks generally screen potential applicants using ChexSystems, a national reporting agency that keeps records of closed accounts at the request of a person. If you’ve lost access to your bank account in the past, you might be rejected by other banks until you pay off the ChexSystems account. This could mean paying off debts to banks or disputing the errors in the records.

After you’ve cleared your account, think about what banks typically refer to as an approved BankOn checking account. Most of them do not charge overdraft charges that kick in when you attempt to make a payment that could put your account in the negative.

Opening the correct bank account involves some effort. However, once you’re approved having a secure place to keep your money as well as a greater chances of getting low-cost loans will make it worth the effort.

“To have a checking account… is the foundation to any money-empowering program,” Rothstein says.

The article originated from NerdWallet and was originally released by The Associated Press.

The author’s bio: Spencer Tierney is an expert in the field of deposits in certificates at NerdWallet. He has had his work highlighted by USA Today and the Los Angeles Times.

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