When to Open a Checking Account

Why Does Timing Matter When Opening a Checking Account?

The best time to open a checking account usually depends on your personal situation, not on the time of year. Unlike retailers promoting sales on Black Friday or auto dealerships offering discounts on holiday weekends, banks typically don’t offer “deals” on checking accounts at any particular time of year.

You may want to open a new checking account if:

• Your marital status has changed. If you’re separated or getting divorced, opening your own individual checking account keeps your finances separate from those of your soon-to-be ex. Getting married? Opening a joint checking account with your spouse allows you to combine your finances and share money management duties.
• You get your first job. Whether full-time or part-time, your first job means income that you’ll want to keep secure. A checking account offers a safe way to pay bills, make purchases and have your paycheck direct deposited to your account.
• You’re starting college. A learning experience in more ways than one, college gives you a lesson in managing money—especially if you’re living away from home. Whether you choose a student checking account or not, checking accounts let you easily pay for fees, rent, books, food and other expenses.
• You want your teen to gain financial skills. Many banks offer teen checking accounts that minors can open solo or jointly with a parent. With beginner-friendly features such as low minimum balance requirements, no maintenance fees and no overdraft fees, these accounts provide financial “training wheels,” letting teens practice money management skills without the risk of debt.
• You’re moving (or plan to move soon). Your location doesn’t matter if your checking account is at an online-only bank. If you currently bank at a local credit union, regional bank or other financial institution without a presence in your new location, however, you may have to switch banks.
• You’ve recently cleaned up your ChexSystems history. When you apply for a bank account, financial institutions examine your ChexSystems report. Negative information such as overdrafts, unpaid bank fees or bounced checks could cause a bank to deny your application. Reviewing your ChexSystems report, disputing any inaccurate information and paying any money owed can clean up your ChexSystems report, improving your odds of being approved for a checking account.
• Your current checking account no longer meets your needs. Perhaps you’ve aged out of a student checking account or your checking account’s fees are too high. Maybe there aren’t enough bank branches or ATMs near you or you want services your bank or credit union doesn’t offer. You might have found other checking accounts offering better features, such as reward checking accounts, premium checking accounts or high-yield checking accounts.

Is Now the Best Time to Open a Checking Account?

To decide whether now is the best time to open a checking account, ask yourself these questions.

• Is the bank offering an incentive? Banks sometimes offer cash bonuses when you open an account. The amount can range from $50 to $1,000, and usually requires meeting conditions such as maintaining a certain minimum account balance or setting up direct deposit. If you’re already considering opening a checking account with a certain bank, or debating similar checking accounts at two different banks, a bonus could give you incentive to act.
• Is your ChexSystems report in order? If a bank has ever closed one of your accounts or you’ve racked up bank fees you never paid, review your ChexSystems report before applying for a new bank account. (You’re entitled to a free copy of your ChexSystems report annually.) Resolve any issues you find before you try to open a checking account.
• Do you have all the information needed to apply? You can generally fill out an application for a checking account online or in person at a bank branch. Most banks require a government-issued photo ID, Social Security number or Individual Taxpayer Identification Number, your contact information and a second form of identification, such as your birth certificate or a utility bill with your name and address. Check with the specific bank to see if you have all the information required before you apply for a checking account.
• Have you selected the checking account you want? There are many options for opening a checking account, so don’t rush to apply for the first account you see. Do some homework to find the financial institution and checking account that best fit your needs.

How to Choose the Best Checking Account

Traditional banks, online banks and credit unions all offer checking accounts; compare your options to decide which type of financial institution best fits your needs. Traditional banks tend to have a wider array of services; credit unions and online banks may offer lower fees and better interest rates. When comparing checking accounts, consider:

• Fees: These may include maintenance fees, ATM fees, overdraft fees, nonsufficient funds fees and more. If there are ways to waive fees, such as maintaining a certain average minimum balance, make sure you can meet these conditions.
• Convenience: Do the bank’s website and mobile app offer useful features such as mobile check deposit, online bill pay and account alerts? If you frequently use ATMs or visit your bank branch, are there enough convenient locations?
• Security: To protect your money, choose a bank insured by the FDIC or credit union insured by the National Credit Union Administration (NCUA). FDIC and NCUA insurance guarantee your deposits up to $250,000 per depositor, per ownership category if your financial institution fails.
• Interest rates: Many checking accounts don’t earn interest, but some do. Interest checking accounts earn a relatively low annual percentage yield (APY); as of October 2023, the average interest on checking accounts was 0.07%, according to the FDIC. High-yield checking accounts earn more interest, with some currently offering rates over 3%.

The Bottom Line

Opening a checking account won’t affect your credit score because banks and credit unions don’t check your credit report when you apply for a bank account. However, a checking account can make a big difference to your personal finances, enabling you to track spending, pay your bills and make purchases while keeping your money safe. Free credit monitoring from Experian is another useful financial tool. It monitors your credit usage and alerts you of important changes to your credit report and credit score.