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Opening and Maintaining a Bank Account

Once you decide what kind of bank and bank account you need, there are four steps to opening and maintaining a bank account. The first step is to open the account. The second step is to make deposits and withdrawals. The third step is to keep track of all the money that is deposited into or is taken out of the account. And the final step is to keep track of your balance.

Step 1: Open a Bank Account

When you go to open a bank account, the banker will ask for your identification to complete the new account opening process.

Different banks may have different requirements. Ask the bank what type of identification you need to open an account.

Banks complete the account verification process to make sure you:

  • Are who you say you are
    • The bank will verify your identity though your photo identification and either your Social Security Number (SSN) or your Individual Taxpayer Identification Number (ITIN).
    • The bank may also ask you for another piece of identification
  • Are able under the law to open a bank account
  • Meet the bank’s own criteria for opening a new account
    • The bank may not want to risk having you as a customer if you have not been a good banking customer in the past.
    • The bank may review your history of using checking accounts through companies such as TeleCheck or ChexSystems.

If you are not a U.S. citizen, some banks may accept other forms of photo identification such as a:

  • Resident Alien Card (Green Card)
  • Passport

If you are unable to open a checking or savings account because you have had trouble managing a bank account in the past, you may be eligible for second chance checking programs.

  • Ask whether you are eligible for any “second chance” checking programs.
    • These programs may allow you to open a checking account after meeting certain requirements, such as completing a financial education workshop.
    • Ask your local financial institution and/or any reputable credit counseling agency if there are programs in your area.
  • Check with other financial institutions to see if you meet their eligibility criteria to open an account.

Step 2: Make deposits and withdrawals

Making deposits and withdrawals is the second step to opening and maintaining a bank account.


A deposit is money you add to your account. Money can be deposited via direct deposit, at an ATM, or through a bank teller. If you are depositing money in a branch, you fill out a deposit slip to tell the bank how much money you are adding to your account.

Depending on what you deposit at a branch or ATM, you may not have immediate use of all the funds:

  • Cash is usually available immediately.
  • Checks may be partially available – the bank may allow up to a certain amount of the deposited check to be withdrawn immediately and hold the rest for a day or two (or perhaps longer) while the check clears, meaning the funds are all available for withdrawal.

When you make a deposit, you may ask the bank when you can use the money you deposited.

Direct Deposit

With direct deposit, your paycheck or benefit check is electronically transferred and directly deposited into your account. You will not receive the check in the mail. The amount of money is immediately available. Some banks may waive monthly fees if direct deposit is used.


It is important to always keep track of your account balance. The balance is the amount of money you have in your bank account.

You always need to know how much is in your account so you will not try to take out more money than you have.

If you overdraw your checking account, you may be charged a fee.


A withdrawal is money you take out of your bank account. Be sure to keep track of the money you deposit into or take out of the account so you don’t spend more than you have in the account.

When you make a withdrawal, you are taking money out of your bank account.

You can make a withdrawal by using your debit card, writing a check, giving a teller a withdrawal slip, or using an ATM.

A withdrawal slip looks similar to a deposit slip except you are taking money out of, rather than adding money to, your account.

Step 3: Understanding Interest and Fees

Understanding interest and fees is the third step to opening and maintaining a bank account. One of the advantages of having a deposit account is the interest you earn (if the account is interest bearing).


Most checking accounts do not pay interest. Savings and money market accounts generally earn interest.


Financial institutions can charge fees for different services. A bank must provide you a disclosure of all the fees that could be charged before you open the account. Be sure to keep this fee schedule and monitor all mail and email from your bank for any changes.

Monthly maintenance fees

You might be charged a monthly maintenance fee for keeping your account open. Some financial institutions waive this fee if you have a regular direct deposit made (for example, once per month) or if you keep a minimum balance in your checking or savings account.

Overdraft fees

An overdraft occurs when you do not have enough money in your account to cover a transaction. In other words, you try to withdraw more money from your checking account than you actually have available to spend. You can overdraw your account by bouncing a check, withdrawing from an ATM before a check clears, or using a debit card to buy something that costs more than you have in your account.

Step 4: Keep Track of Your Balance

The fourth and final step to opening and maintaining a bank account is to keep track of your balance. The best way to avoid paying overdraft fees is to record all transactions and keep track of your balance.

Reconciling your checking account helps you find the reasons for the differences, and make necessary corrections.

Additional Bank Services

Banks provide additional services with some deposit accounts and may charge a fee for these services. It is important to ask about fees before signing up for a service and to keep track of any fees that are charged.

Money transfer

A money transfer sends money electronically from one bank to another. Most banks can transfer money to banks that are outside the U.S.

Automated Teller Machine (ATM)

An ATM is a kiosk where you can deposit, withdraw, or transfer money from one account to another 24 hours a day. Remember, there may be a fee involved for some of these ATM services.

You can also use an ATM to check your account balance and transfer money between savings and checking accounts.

In order to use an ATM, you must have a Personal Identification Number (PIN). PINS are a “secret code,” usually four digits, which you enter with the keypad on the ATM when you first insert your card into the machine. Never tell anyone your PIN and don’t keep it written down in the same location as your ATM/debit card. Otherwise, someone may use your PIN and take all of the money from your account.

Electronic banking

Most banks provide electronic banking services. These allow you to access your account and conduct basic banking services over the telephone, using a computer, or on a smartphone. Many provide these services for free while others may charge a fee. The services may allow you to:

  • Check account balances.
  • Transfer money between accounts.
  • Obtain account history, such as most recent deposits or withdrawals.
  • Stop payment on a check.
  • Obtain information on branch hours or other information.
  • Report a lost, stolen, or damaged card.

Electronic banking uses computers to move money to and from your bank account instead of checks and other paper transactions. Examples of electronic banking include:

  • ATM transactions with use of an ATM or debit card
  • Automatic bill pay
  • Online bill pay
  • Cell phone banking

Cashier’s Check

A cashier’s check is similar to a check. It is used to pay bills or make purchases when cash is not accepted. You are able to get a cashier’s check from the bank. Some banks may charge a fee for this request.


A loan is money you borrow from a bank with a written promise to pay it back later. The lender or bank charges fees and interest on loans as part of the agreement. Interest is the money you pay to borrow money, and it is added to the total amount you must pay back.

Debit card

A debit card is a plastic card with an EMV chip that is tied directly to your checking account. It allows you to pay for goods and services at stores or online that accept the major card networks such as MasterCard or Visa.