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What are checkings and savings account?

18 June 2011

If you plan to stay in the US for at least 6 months, I strongly suggest you to make a bank account, especially when you don’t have a credit card. You need personal checks to pay phone bills, tuition and so forth. It acts like a money order, but you don’t have to go to a bank to issue them. Personal checks are pieces of paper that your write to authorize a person or business to withdraw money from your checking account. Usually it costs eight to ten dollars per month to keep a checking account, but it differs from bank to bank, and for instance Bank of America offers free checking when you have more than $2000 in your account.

A savings account is just like a normal bank account where you keep your money and earn interest. The interest rate is somewhere around 2%, so you won’t gain much interest out of it. If you want higher interest rates, ask your banker for a CD account. These have rates around 3 to5% depending on how much and how long you are willing to deposit.

One thing about the choice of your bank. The most important factor for me is the abundance of ATMs(Automated Teller Machines). Most of the usual bank transactions can be perfomed on an ATM, such as withdrawal and deposit, and transfer. As you open a savings or a checkings account, the bank will send you an ATM card within a couple of weeks. Near the Berkeley campus, there are many Bank of America and Wells Fargo ATMs. Right now, I have a free savings account at Bank of America, and savings and checkings at Wells fargo. You can have as many bank accounts as you wish. I didn’t keep my checking account at Bank of America because of the high fees they charge for silly things. You might be interested in Washington Mutuals free checking account.

When it comes to borrowing money, probably no bank or auto dealer will offer an attractive rate than credit unions. The interest rates are typically higher than commercial banks. Drawback is fewer ATMs.

Things you might need to open an account.
1. Social security number(Forms and info). It is not clear to me whether you absolutely need it. I have been told that depending on who you ask in the same bank, they give a different answer.
2. Picture ID. A student ID is nothing but a name card outside the campus. Bring your passport or drivers license for identification.
3. Initial deposit. Most banks require an initial deposit of $100 to $200 for just opening an account.

Credit cards are needed when you want to borrow a video, rent a car, order something on the internet and so forth. Some companies offer deals such as 2% cash back, or extended warranty, and sometimes free rental car auto insurance. Most of the time you need to get a social security number to be eligible to apply for a card. Credit card choose tool Visa and Master cards are most widely accepted. Discover and American express follows. Beware of the scams that bank credit cards pull on you! When you report address change to your bank, DO NOT assume that the credit card department will get the same report. I had a Bank of America credit card that I never activated, and got a phone call 4 months later telling me I owe them $96 in finance charges. I could’ve avoided paying this money if the credit card department had my new address. For the whole time they were sending me my credit card bills to my old address, while sending my savings and checking statements to my new address.

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