Opening and Managing a Checking Account

If your piggy bank is bursting, consider opening a checking account.

Before banks dotted every streetcorner in America, some people stuffed their money under the mattress for safekeeping. It wasn't very safe.

Today virtually everyone has access to a bank. It's a safe place to store your money, and it offers conveniences such as check writing, electronic banking, and interest on your money.

Choosing a Bank

The most common types of bank accounts are checking and savings. If you plan to take money out of your account frequently, you probably need a checking account. Savings accounts and other savings options are discussed on page 506.

Opening a checking account is fairly easy. First you'll need some kind of identification, such as a driver's license or a pay stub. You'll also need a Social Security number. (If you don't yet have a Social Security number, you can apply on-line at the Web site of the Social Security Administration.) Finally, you'll need at least a small sum of money to deposit when you open your account.

It pays to shop around for the best checking account. Although the interest that most banks pay on checking accounts ranges from little to none, other features, such as fees, vary widely. The chart above lists some of the criteria to consider when selecting a checking account.

Keeping Records

When you open an account, you'll receive a checkbook that includes sequentially numbered checks and a check register, a booklet in which you'll record your account transactions. You'll make your life a lot easier if you decide from the start to be a good recordkeeper. Every time you write a check, make a deposit, or use an ATM, take a few seconds to jot it down in your check register.

You won't believe how glad you'll be that you have your own records of your financial business. For example, if you earn money, the Internal Revenue Service could ask at any time to see your financial records for the past three years.

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