Opening a bank account is one of the first steps you’ll take in becoming an independent and successful individual. And while it is a relatively straight-forward process, there are a few things you need to think about first…
Choosing the right account for you
It’s important you understand which bank account you want to open and that you get familiar with the terms and conditions. Whilst many banks allow you to open accounts online, it pays to visit your local banking branch and speak to a professional who can help you make the right choice.
Current accounts – this account is best suited for day-to-day management of your money; it allows you to pay bills by Direct Debit, receive automated payments such as benefits, wages, and salary, and pay for things using a debit card as well as draw money from cash machines.
Fee-free basic accounts – If you’re unable to open a current account, maybe because of a low credit rating, you can open a basic account. It doesn’t allow an overdraft but you can make payments through Direct Debit, and receive automated payments.
Saving accounts – it says it in the name; these accounts are designed to help you save your money. There are different types of saving accounts, but the main differences are how much money is required to keep them open, the type and rate of interest, and how quickly you can get access to your money. A few examples are Everyday Savers, Instant Cash ISA, and Help to Buy ISA.
Joint bank accounts – this account allows you to manage your money shared with either a housemate, partner, or other. It’s great for people with shared expenses and the money is accessible for two or more people. The account holders can all pay into the account making it an easy way of sharing money.
Things to consider
Managing your account – many banks now offer mobile apps that allow you to keep track of your ingoings and outgoings in all of your open accounts. It’s easily accessible and security is taken very seriously. If you feel that the bank account you opened isn’t right for you, don’t settle for it – explore your options and gather information from other banks. Take responsibility for your spending as a young adult; learn to balance your checkbook and be wary of taking on a credit card.
The benefits and disadvantages – ask about the benefits the bank has to offer; some have free checks, no ATM fees, paperless billing, and free saving accounts. Find out what exactly you can benefit from before signing up, and the same goes for disadvantages, make sure you understand exactly what your bank doesn’t offer so that you don’t accidentally miss out.
Looking for ways to save money online? We’ve got some great tips here.