How to Know Which Account(s) to Open at a Bank (and Where)

Most banks, financial institutions and credit unions offer a wide array of accounts, from simple checking accounts to money markets or brokerage accounts you'll be able to find the right fit for your money and financial situation.

Difficulty: Moderately Easy

Instructions

1. The first thing to do before opening any account is to do your research. You want to know before stepping into your financial institution which type of account you think might be right for you.
   
   Checking Account: (a.k.a. transactional account or demand deposit account) Typically these accounts do not earn any interest, but are intended for easy access to funds through a debit card or checks.
   
   Savings Account: Like the name says, these accounts are for saving money. Savings Accounts bear interest, and there are usually restrictions on the access of the funds (i.e. you may only be allowed to access or withdraw funds 3 times per month without penalty.)
   
   Money Market Account: This is similar to a savings, but usually will pay higher interest rates. Checks can usually be written off of a money market account, but as with the savings account, there may be restrictions to this.
   
   Certificate of Deposit: This is a type of account where the funds un unavailable for a set amount of time, usually 6 months or longer. Most Cd's have a set interest date, and a maturity date. CD's usually have a higher interest rate for a larger balance.

2. Know your options. Within each account category, there are many to choose from. For instance, if you decide you want to open a checking account, your local bank or credit union might offer several different types of checking accounts. Some may be free (i.e. no monthly service fee) and others may have a monthly service fee, but may come with other perks such as free cashier' checks or free check orders.
   Pick up a brochure from the bank or credit union, or check out their official website to weigh the pros and cons. This step applies to any account that you might be interested in.

3. Shop around. There are so many banks, credit unions and financial institutions out there that you don't need to settle for the first one you come by.

[jenng]

on 9/29/2009 Great article 5*