5 Tips for Opening Your First Bank Account

Opening a bank account is an easy thing to do. However, there are many banks in Australia and New Zealand. To find the best option out there, you’ll have to do your research. Also, you might consider opening two accounts in order to separate your business and personal expenses. Anyways, in this article, we will show you five tips that will be super beneficial for whatever option you choose in the end. 

Why is a bank account necessary?

For many people, it is hard and challenging to keep the money inside the house. Instead, bank accounts offer a lot more security. It allows you to use a debit card, deposit money, access online banking services, etc. Open your first bank account immediately when you earn your first salary. On top of that, consider using some financial tools such as MyFi, parallel with creating your bank account. That way, you will create positive financial habits, such as budgeting and saving. Finally, almost every bank has the security system which detects and lowers the risk of theft. They will inform you if there is any suspicious activity happening with your account, or if there was a transaction bigger than usual.

Fees

There are fees with various bank accounts, and it is essential to understand how they work. Some of the most important are international transaction fees, maintenance fees, and overdraft fees. Before creating your bank account, you should ask several questions about avoiding some of the costs, if it is possible. For instance, you can establish direct deposits in some banks, or maintain a minimum balance. However, even if there are some of these options, you should inform yourself first to figure out which possibility is the best for your current financial situation. 

Security features

Security is one of the most significant advantages of a bank account over saving money in your house. Insurance protection is the most critical feature. It protects your deposit in case you lose your money, of course, if your bank is insured. However, there are certain limits. For instance, if you get robbed in the street, your stolen money, most likely, won’t be insured. There are many other great options, such as putting a hold on your card in case it gets stolen. Just put a hold, request a replacement, and nothing bad will happen (only a small fee for replacement).

Carefully read terms and conditions

This step is vital, even though many people tend to underestimate it, mostly because they are lazy to read it all. Don’t be that person. Why is it essential to read it all? For instance, there might be charges associated with online banking, which might cause a problem for you. Also, some accounts have limitations regarding the number of debit card transactions you can make per month. Not only that you should read terms and conditions because of potential issues, but you can also inform yourself about some convenient options which you might not be aware of otherwise. Read every sentence, and make sure you understand all limits and conveniences before you decide to set up your bank account.

Open a savings account at the same time

A savings account is always an excellent addition to your checking account. You’ll be surprised when you realize how quickly the money starts to add up. The best thing is that you can set up automatic transfers between these two accounts. However, you can consider having an online savings account because of higher interest rates. If you choose that option, you will still be able to set up automatic transfers. However, before you open the savings account, think about the reasons for doing it. First of all, define your saving goals and develop the plan to achieve them. Second, think about your long-term and short-term plans. Which of those has priority over the other? And finally, think about the emergency fund. Money in that fund will always be instantly available without penalties. 

Don’t rush your decision and choose your financial institution only because a friend or partner told you to do so. Do your research first – compare fees, interest rates, security features, and other conveniences and limitations. That is the only way to choose the right financial account.