When you first arrive in the United States, you may not know what to do with your money or who to trust. You certainly feel nervous about giving your money to a stranger in a bank.

You may have never used a bank before and are wondering why you need a bank account. This page will help you understand two of the most popular types of bank accounts. requirements for opening an account, fees, and how to manage your account balance.

In the United States, there are different types of financial institutions such as commercial banks, savings (savings and loan associations, savings banks), and credit unions. Each of these institutions has different rules and regulations and varying offerings for their clients.

One of the most popular choices is commercial banking. The Federal Reserve regulates commercial banks. If you have at least $250,000 and your bank is owned by the Federal Deposit Insurance Corporation (FDIC), your money is protected.

Why you need a bank account

Keeping large sums of money in your house or apartment or with you is not a good idea as it can be lost or stolen. It's best to keep most of your money in a bank or credit union. Millions of Americans use banks; There are a few reasons why you should open a bank account:

Your money is safe because federal laws protect your money from unauthorized transactions and errors.
You can build your credit history in the United States.
You can make bank transfers easily and securely.
You can keep an eye on your finances.
It's easier to receive your paycheck.
It's also easier to pay for things by mail or online.

Types of bank accounts

You can open a savings account or a checking account.

Current accounts allow you to deposit money and pay your bills. Once you work, you can receive your paycheck as a direct deposit, meaning it will go directly from the employer to your checking account.

If you have savings or want to start saving, you can open a separate bank account. Savings accounts help you save money for the future. You can earn interest by putting money into a savings account. However, most savings accounts only allow you to withdraw money from the account a few times a month.

Opening a bank account

To open a bank account, you will need a small amount of money, usually between $25 and $100.

Before choosing a bank, you should ask your friends and family for suggestions, do some research online, read reviews and once you find a suitable bank for you, ask questions about the conditions, special fees, and benefits that the bank can provide you.

Although they may vary depending on the bank chosen, the main requirements for opening a bank account are as follows:

Be at least 18 years old.
Two types of photo identification such as your driver's license or passport.
A social security number or individual taxpayer number.
A service invoice, this document must indicate your current address.
Provide a phone number and email address.
If you open a joint account (an account shared with another person such as your spouse), both people must be present.

Cheques and debit cards

When you open your savings or checking account, you can get a debit card and a checkbook.

A debit card is a plastic card that allows you to get money from an ATM (ATM), a special machine that holds money. You can also use it to pay for purchases. When you use your debit card or cheque, the money goes out of your bank account.

You can also use your debit card to pay for things in stores, online, and over the phone. Be careful when using your debit card online.

In order to protect your identity, you must have a PIN (personal identification number) to use your card. You enter your PIN every time you take money from ATMs or buy something. If you lose the card or it is stolen, no one can use it unless they know the PIN.

Cheques are a form that you fill out and sign to pay for purchases. The person who receives your cheque deposits it in their bank and your bank pays them by deducting the amount from your account. You can use cheques to pay bills, such as your rent and utilities. Local businesses can also accept your cheques if they know you.

Bank charges

Whether you choose a savings account or a checking account, ask if you qualify for a free account. It is best to be able to deposit money (put money in the bank) and make withdrawals (withdraw money from the bank) without having to pay any fees.

Bank employees can answer your questions and help you understand how banks work.

Some banks will charge you a fee if you use other banks' ATMs and withdraw more money than you have in your checking account. If you make too many withdrawals from your savings account, you may incur additional fees.

Most banks have some form of the free checking account, so you shouldn't have to pay any fees. You can get better rates at a credit union, a type of bank owned by its members.

Manage your bank balance

Once you have a bank account, you need to be careful to only spend the amount you have in your bank. If you write a check but don't have enough money for the check, you'll have to pay an overdraft fee of $50 or more. If you make a mistake, you can explain to the bank that it was a real misunderstanding and politely ask the bank to refund the fee, but it is possible that the bank will refuse.

To avoid mistakes, you can check how much money you have in savings or in your checking account at the bank, online, or at the ATM. The amount you have is called "bank balance". Overdraft fees cost a lot of money, so it's advisable to keep a close eye on your bank balance!