Setting Up Your First Bank Account

When we’re very young, our parents look out for our finances for us — to the extent, of course, that we even have our own finances at all. But we reach a time in our lives when we need to take the first steps toward a strong and independent financial future. For some of us, our first bank account will be one that our parents help us open as children. Others might get their first bank account as they head off to college or into the working world.

Regardless of when you begin banking, you’ll need to know a few things before you start using that bank account.

How (and why) to choose the right bank account.

First things first. You need to know how to pick a good bank and choose the right type of account.

You might not think that which bank you use is important. It’s true enough that many banks offer similar types of checking accounts to first-time bankers. But you should take a little time to choose the right bank and account. If you settle in with one and later wish you’d chosen another, it’s going to be a bit annoying to make the switch — and you might be unlikely to take the trouble to do so.

Your first bank account is likely to be a checking account, which is different from a savings account. These sorts of accounts are perfect for accepting direct deposits from employers, paying electronic and paper bills for utilities, and writing checks for things like rent and utilities.

Keep your eye out for things like overdraft fees and overdraft protection. It’s your job to keep your books balanced and avoid overdrawing your account, of course. As soon as you can, learn how to balance a checkbook. But because so much is now done with automated payments, debit cards, and other things that are tough to record manually in your checkbook, you should be proactive about checking your balance online or in an app — and should consider any overdraft-related perks that might help you out if you ever mess up.

In fact, keep a sharp eye out for fees in general. You don’t want any nasty surprises eating away at your savings.

When you have enough money in a checking account to cover your near-term expenses, you should consider setting up a savings account. Savings accounts offer higher interest rates, making them better for avoiding the perils of inflation. However, you should be mindful of fees and minimums related to savings accounts.

Be careful with that debit card.

You’re likely to get a debit card with your first bank account. Most checking accounts (and many savings accounts, too) come with debit cards, which allow you to spend cash from your account without actually having that cash on you.

Debit cards use money you already have, so they don’t come with all of the same debt and interest dangers that credit cards do. But it’s easy to spend money when you don’t actually see the bills and coins changing hands, and you need to be careful not to get carried away with your debit card. Americans actually spend more with debit cards than with credit cards, so watch out. The intoxicating power of plastic could lead you to spend more than you mean to — and perhaps even overdraw your account!

Have fun and customize your account.

Your first bank account is a serious thing, but it’s also a wonderful moment for you as you grow up and take more responsibilities. If you have the means (or if such things are included free by your bank), you can and should customize your debit card, checks, and other basics with fun images and things that speak to your passions.

You can also turn to third-party companies to get new deposit slips and other essentials. This can be cheaper than going through your bank, so don’t feel like you have to head to the official website to get deposit slips or checks.

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