How to Open Bank Accounts

Pick a Type of Account

• When you've selected a bank and location, you'll need to choose the type of account you want. Your options are:

  Savings accounts

  Checking accounts

  Linking accounts

  Joint accounts

  Savings Accounts: The main purpose of this type of account is not only to store your money safely away, but also to gain interest. "Interest" means that the bank will pay you for letting them hold your money and how much interest you get depends on the amount of money you have in your savings account. Bottom line--the more money you save, the more you'll gain. There are several types of savings accounts and the details and names of each type vary from bank to bank.

  * Passbook Savings: This is the simplest type of savings account. You go into the bank, deposit or withdraw your money, and the teller makes a notation on your passbook (which records all the activity that goes on with your account). A passbook savings account is perfect if you're a haphazard saver who randomly makes deposits and withdrawals.

  * Regular Savings: This account can be linked to a checking account and the bank will send you a statement to let you know what's going on every month. You'll get an ATM card with this account that will permit you to withdraw cash at all of the bank's ATM machines and at other universal ATM machines. A regular savings account is ideal for people who make a steady but limited income.

  * High-Interest Savings: This account comes with all the benefits of a regular account, but has a higher minimum balance (that is, you have to always have a lot of cash sitting in the account). On the upside, it gives back a higher interest return than a passbook or regular savings account. You store more, but you also get more back. If you've got a couple thousand dollars for your bar mitzvah that you want to put away, this is the account for you.

  * Certificates of Deposit (CDs): The above three accounts are all "liquid" accounts, meaning that you can deposit money into and take money out of your account at any time (while taking care to honor your minimum balance requirements). When you put your money in a CD, you agree to put it away for a certain number of months. There's no adding money to the CD, and there's definitely no removing money from it, either. Because you're giving your money to the bank for three or more months at a time, the bank will pay you a higher interest rate than they'll pay you for keeping money in any of the other savings accounts.

  Checking Accounts: All banks offer checking accounts, but some offer checking accounts that also work as savings accounts.

  * Regular Checking: At most banks, you'll pay a low monthly fee for check-writing services. This means that you'll be set up with a checkbook immediately after opening the account and have the option of writing checks that draw money out of this account. With regular checking, you'll also get the money storage and ATM services. Whenever you need to randomly take money out to buy groceries, clothes or a feral midget, it should be from your checking account.

  * Interest Checking: This account features everything that a regular checking account has, but it includes an interest rate, so it acts like a regular savings account.

  Some banks offer a service called "overdraft protection," which basically means that if the check bounces, the bank will spot you the amount of money for which you've written a check.

  Linking Accounts: If what you really need is a checking account, but what you want is to earn interest without paying the high fees for interest checking, you have the option of linking a savings account to your regular checking account. When making deposits, you'll have the option of putting the money into one of your accounts.

  Joint Accounts: When you open any account with another person, it is called a joint account. Married couples usually open one of these accounts, but unmarried couples and total strangers can do it as well. You and the co-account opener have equal ownership to all the money in the account, and can take advantage of all the services that come with the account. Either of you can deposit or withdraw as much of the money as you like without having to answer to the other holder.