Opening Your First Current Account

Opening your first current account, no matter how old you are, is a sign of financial independence. In fact, it’s almost a necessity to function financially. Before you open your first account, make sure you shop around to find the account that offers the best benefits. There is no one perfect account for everyone, so…”
Nofisat Marindoti
May 14, 2018 10:43 am

Opening your first current account, no matter how old you are, is a sign of financial independence. In fact, it’s almost a necessity to function financially. Before you open your first account, make sure you shop around to find the account that offers the best benefits. There is no one perfect account for everyone, so knowing which features are most beneficial for your lifestyle helps you find the current account that is right for you, according to www.quicken.com.

Current account features

When you start looking for a first current account, make sure the bank offers all of the features that you are interested in. According to Mary Beth Storjohann, a certified financial planner practising in the San Diego area, at a minimum the account should offer “overdraft protection, online bill-pay, 24-hour automated telephone service.” Overdraft protection means your bank will cover you, within limits, if you write a cheque that is larger than your account balance, though it usually comes with fees.

In addition, she recommends that you look at current accounts that offer mobile banking and let you link your current account to your savings account, which cuts down on your trips to the bank.

Lastly, consider the bank’s ATM network. Storjohann asks, “Are there plenty of available ATMs nearby where you are able to withdraw funds at no charge? Or will you be forced to use a competing bank’s ATM and pay a fee per withdrawal?”

Checking account fees

Before you open the account, make sure you understand what fees you will be charged. “When opening a current account, what many people don’t do is ask for a complete disclosure of account fees,” Storjohann says. “There should be a written document that will include descriptions of bounced cheque fees, annual maintenance or monthly fees, minimum balance fees, debit card fees, etc.” For example, you might be attracted to a current account that has lots of convenient ATMs and even pays interest. But if the bank will charge you a monthly fee for going below a minimum balance, and you are going to have trouble keeping that much money in the account, this fee could outweigh all of the benefits of that account.

Checking account rewards

Rewards are not just for credit cards. “Some banks issue debit cards with their current accounts, and by signing up for one with a rewards programme, customers can earn cash back or other rewards by using their card for purchases,” Storjohann says. This is especially useful if you don’t have a go-to credit card for racking up rewards purchases or if you prefer to use your debit card over a credit card.

Opening the account

You can open a current account in person or, for many banks, online. You will need to provide your identifying information. If you apply in person, bring your driver’s licence or other official ID. Or, if you have recently moved and you have not updated your license yet, you might be able to use a recent utility bill to prove your address. When you are opening your first account, you won’t have to worry about bad history from prior accounts. However, do not abuse your overdraft protection or ignore an overdrawn account. Similar to a credit report, banks can pull your current account history from a database called ChexSystems. If you abuse your first account, it might be a while before you get a second chance.

According to a report by www.collegedata.com, opening a current account is one of life’s milestones. In spite of the wide use of credit, there are many situations where only a cheque will do. Here are some guidelines for opening your current account.

Opening a current account is not difficult. You will need to fill out the bank’s forms and deposit some money. Most banks request some information but some allow for alternative forms of identification.

When you open your account, the bank will issue you temporary cheques, which do not show your contact information. When using these cheques, you will need to write your name and address on each cheque as you use it. You will usually order printed cheques at the time you open your account, because many merchants will not accept temporary cheques. Most banks will also give you an ATM card, so you can get cash and make deposits at the bank’s ATMs.

Checking accounts with debit cards

The bank may also offer you a “debit” card, which you can use to make purchases from merchants that accept them. Unlike credit cards, which you pay when you get a statement of your charges, the debit card charge is deducted from your current account within a few days. Debit cards can be a useful consumer tool since they allow convenient cash-based spending. Plus they provide a spending record of where that cash went.

The right way to write chequs

When writing a cheque, fill in all of the blank spaces and draw a line through any unused spaces. Be sure to write the cheque amount both as a number (N25.00) and spelled-out (twenty-five naira). Always sign your cheques as you write them. Never sign a blank cheque. If you make a mistake while writing a cheque, write “VOID” in large letters across the cheque, note the voided cheque in your chequebook, tear up and dispose of the cheque so that no one else will be able to use it, and write a new cheque.

 

SOURCE: PUNCH

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