Opening of Bank Account

A bank account is a financial account maintained by a bank or other financial institution in which the financial transactions between the bank and a customer are recorded. Each financial institution sets the terms and conditions for each type of account it offers, which are classified in commonly understood types, such as deposit accounts, credit card accounts, current accounts, loan accounts or many other types of account. A customer may have more than one account. Once an account is opened, funds entrusted by the customer to the financial institution on deposit are recorded in the account designated by the customer. Funds can be withdrawn from loan loaders.

The financial transactions which have occurred on a bank account within a given period of time are reported to the customer on a bank statement, and the balance of the accounts of a customer at any point in time is their financial position with the institution.

Account Structure

From the customer’s point of view, bank accounts may have a positive, or credit balance, when the financial institution owes money to the customer; or a negative, or debit balance, when the customer owes the financial institution money.

Broadly, accounts that hold credit balances are referred to as deposit accounts, and accounts opened to hold debit balances are referred to as loan accounts. Some accounts can switch between credit and debit balances.

Some accounts are categorized by the function rather than nature of the balance they hold, such as savings account, which routinely are in credit.

Financial institutions have an account numbering scheme to identify each account, which is important as a customer may have multiple accounts.

Steps

1. Decide what kind of account you need

Choose a savings account if you’re looking for a place to save money over a short period of time, but still keep it readily accessible. Choose a chequing account to keep money that you plan to use for day-to-day spending or to pay bills over the short term. You’ll earn less interest than with a savings account.

Generally, have a variety of account types and services to choose from, including:

• Checking accounts: Use these for making payments and receiving direct deposits.
• Savings accounts: These accounts allow you to earn interest.6
• Money market accounts: These products sometimes earn slightly more interest than savings accounts (while maintaining your access to cash).
• Certificates of deposit (CDs): These products can earn much more than savings accounts but require you to lock up your funds for a certain period.7
• Loans: You can take out one of several types of loans (auto, home, personal loans, for example).

2. Look for an account with the services you’ll use most

In particular, think about how you’re likely to put money in and take it out:

• Branch: Make deposits and withdrawals using a teller or ATM
• Debit card: Buy something or get cash at a store
• Cheques: Pay bills
• Direct debit: Pay bills automatically from your account each month
• Direct deposit: Have your pay put into your account
• Internet or telephone banking: For a range of transactions

3. Shop around to compare rates and fees

Understand the service fees you can be charged before you open an account. Look for accounts that charge the lowest fees for the services you need. And compare interest rates. They will vary across financial institutions.

4. Choose a financial institution and location

Choose one that has branches or bank machines located close to where you live or work.

5. Open your account

You’ll have to give personal information such as your address, date of birth, social insurance number, job title and phone numbers when you complete the account application. You’ll also need to show 2 pieces of acceptable identification. One of them must be from the government. Then make your first deposit.

Fund Your Account

If you’re opening a checking or savings account, you’ll often need to make an initial deposit into the account. Sometimes, this is required as part of the opening process, and other times, you can do it after the account is up and running. There are several ways to fund your account:

• Deposit cash: It should be available for spending with your debit card by the next day.13
• Deposit a check or money order: The funds should be available within a few business days after you make the deposit.14
• Set up direct deposit with your employer: Instead of getting a paycheck, your earnings will be sent directly to your new account.
• Transfer funds electronically: Move money from an external bank account to make your initial deposit.

Start Using the Account

If you followed all the steps, you should have a brand-new bank account in your name. It should be ready to use within a few minutes to a few days. For checking and savings accounts, keep an eye out for a debit card (or ATM card) in the mail. You might also get a checkbook so that you can write checks. To make the most of your account, sign up for (usually free) account features that help you manage your money:

• Online bill pay: This feature allows you to pay bills electronically.
• Remote check deposit: Your bank’s mobile app may allow you to deposit checks remotely so that you don’t have to make trips to a branch or fill out deposit slips.
• Alerts: Sign up for text or email alerts so that you know when your account balance is running low (or when large withdrawals happen).