A few years ago, opening a bank account meant several trips to the bank branch and even more formalities to be completed. Visiting a nearby branch and waiting until your account could make most of us procrastinate the much-needed task. Opening a bank account is necessary and there is no way you can get away from it. But the good is that you can now open a bank account online. Well, yes. With the development in technology, several banks have begun to offer this facility.

If you wish to open a bank account online, you can do so with much ease. However, there are few challenges that people may face sometimes. Here are some reasons when you will be left with no option but have to visit the bank:

Age factor – When you try to open a bank account online, you will have to fill in details about your age. Individual who are under the legal age of 18 may not be able to go ahead with the procedure. The reason behind this is that any person who is under 18 can not open an independent bank account. One will have to start a joint account with a guardian. The guarding does not have particularly be a parent and be any adult. This procedure will require you to visit the branch of the bank.

Citizen of the country – If you are a citizen of the United States, you be able to easily open a bank account online. But this does not mean that non-Americans can not. An individual who is not a citizen may have to produce the certain document and undergo verification before the procedure is completed. For this reason, a trip to the bank will be necessary.

Unclear account history – The bank will check your past history before letting you open a bank account online. If you have an unclear history or have a past record of checks getting bounced, you request of opening a new account may not be accepted. The system will report an error and you will have no choice but to visit the bank’s nearest branch to sort out the issue.

Entity accounts – If you are opening a personal account online, there should be no hitch in the process. However, if you have to open an account for a business or specific organization that is a high chance that you have to go to the bank’s branch to carry out certain types of verifications and personally get in contact with the banking professionals.

The online space has come to be a real boon for many. Thanks to the internet, you can now do everything at the tips of fingers, while lying on your couch. From ordering food online to making reservations for your next holiday, you can do it all through the online space. If this is not amusing enough, you can now open a bank account online.

Not until very long, opening a new bank account was one of the most boring tasks. From having to visit the bank to produce a bunch of documents, the entire procedure could make you cringe. However, with the onset of the online world, you can now open bank accounts online. Well, this is sure to come as a big surprise, but yes, it is true. This much-needed facility will mean that you no more have take trips to the branch and stand in big ques.

If you are planning to open a bank account online, there is not much that you have to do. However, opening a bank account online will means being more involved than just signing up to a new email account. The procedure may be longer and you need to know and get a get things together before starting. You have to first begin by deciding on the bank that you want to open a bank account with. Most banks have a set number of things that they require to go forward with the procedure and listed below are the items that you will require:

Source of funding – Like in a tradition bank account opening procedure, when opening a bank account online, you have to add a principal fund to the account. You will have to provide a source through which the money can be added. Doing this through a credit or debit card is one of the easiest ways. However, you can also transfer the funds from another bank account by linking it with the account number.

Documents and personal information – The bank requires authentication and thus you will have to provide personal details about yourself. You will have to provide information about your birth date, personal documents such as driving license, passport and more. In the case of a reputed bank, you do not have to worry about security as the information will be kept confidential.

The point of contact – Every bank maintains a relationship with their customers through regular communication. Thus, you will have to update your contact information. This will include your email address, phone number, and residential address. This contact information will be used to update and inform you about various bank deals or requirements in the future.

Banks are there to safeguard money, and have employed different ways to do so. Due to the growth of technology, the banking sector has seen tremendous changes. With the rise of Internet and mobile banking, an influx of options has made banking easier for customers. There are many types of bank accounts. It is important that you chose the best ones based on your needs.

In order to open a bank account, you need to be eligible. You will need valid identification. You can deposit the money through a deposit receipt or through an ATM machine. There are five types of accounts, savings account, checking account, interest checking accounts, money market accounts and certificate of deposits (CD’s).

Checking Account
This is the most basic version and is available for personal, business, student and joint transactions. The personal accounts have more relaxations when compared with business accounts. Banks offer a variety of customizations for these types of accounts. This includes no requirement for minimum balance, facility to use ATM cards and checks. Checking accounts usually allow for unlimited deposits and multiple transactions, and it is the most flexible type of account.

Saving Account
As the name specifies, savings accounts are created for the primary purpose; Saving. These accounts provide a small rate of interest. Unlike checking accounts, saving accounts limit the number of transactions and also deduct money when the minimum balance is not maintained. They also provide ATM, mobile and Internet banking facilities.

Interest checking accounts
Another type under checking accounts is the interest checking account. This account provides a modest rate of interest. It differs from the savings bank account in such a way that, it offers unlimited number of transactions and usually doesn’t levy charges. It does however, require a minimum balance to be maintained. These accounts provide ATM services, and checks for easy access of money.

Money market accounts
Money market account (MMA) offers a higher interest rate in comparison with savings account. MMA’s were usually accounts made for the specific purpose of investing in the stock market. But nowadays, they are used to simply deposit money as well, the higher the deposit the higher the interest rate. They offer limited transactions and require a particular amount to be maintained. These accounts are able to provide higher interest rates since they invest in varied types of schemes.

Certificate of Deposit
CD’s allow you to invest your money for a set period of time for a particular rate. They are also known as “time deposits”. You will be able to withdraw the amount only after that time period. Withdrawing before the time period will result in a penalty. The longer the time period the higher the rate of interest.

One among the many bank accounts available to depositors, Certificates of Deposits (CDs) is one of the most favored. They combine less risk with more returns. CDs are basically time deposits held for a specified time frame, from 3 months to 6 years and carry a fixed interest rate.

Return on CDs
CDs are more rewarding than your regular savings accounts. Longer the duration of the CD, higher would be its interest rate be. Currently, a 3 year CD with offers you a 0.5% return. A higher percentage (1%) is offered by credit unions.

The CD rates are quoted as APY, which factors the interest compounding frequency. Interest compounding varies between banks. Some do it annually, a few of them half-yearly, and a few others quarterly or even on a daily basis.

Safety
CDs score high on safety. They are secured by FDIC up to $250,000 making them a very safe choice. It’s best to hold CDs with banks that enjoy the federal coverage. Look out for the FDIC sign at the teller window.

Types Of CDs

• Variable Rate CD
  While in general CDs are attached to a fixed interest rate, variable CD rates are linked to a prime interest rate. This could either be the market index or the Treasury Bill rate. When there is a potential interest rate hike, you stand to gain. You ought to be prepared to face a fall in the interest rate as well.

• Liquid CD
  Premature withdrawal attracts substantial penalty. Liquid CDs charge a low or no penalty in case you withdraw early. The rate of interest is low, but you enjoy access to your funds. However, you need to maintain a minimum balance.

• Jumbo CD
  A high investment CD, usually $100,000 and upwards, these deposits fetch you higher returns.

• Callable CD
  While the choice of CD term rests with the depositor, in the case of Callable CD, the bank has the option to cut short the CD term. The silver lining is these deposits carry a comparatively higher rate.
• IRA CD
  It is a regular CD with its fixed rate and tenure held in a tax-advantaged person’s retirement account.
• Laddering CDs
  CDs, no doubt fetch better returns that the standard savings account. A better option is to maximize your return by using the technique of laddering.

All of you are aware that the premature withdrawal of a CD entails a hefty penalty, which can escalate to loss of deposit as well. The best way to ensure accessibility to funds, earn returns and avoid the penalty is by laddering your CDs.

In this technique, instead of having a lump sum CD, you split it into multiple CDs of varying terms. While the long-term CDs can fetch you a higher returns, the short-term CDs will improve your liquidity.

CDs are a good option indeed. Backed by federal insurance, you can earn a solid return from CDs. Choose the right type, and take the benefit of laddering. Your savings plan will get a good boost.

In today’s world, almost everyone holds a bank account. Banks offer different types of accounts to meet the needs of individual customers. Most banks give you the option to choose between five different types of accounts. The choice is up to the customer, depending on his or her needs.

Here is a brief description of each types of individual bank account.

Savings account: Banks across the world offer savings accounts. The intent of such accounts is to encourage savings. Whatever surplus you have in hand, deposit it into your savings account. The interest that you earn on a savings account is more than what you would earn from a checking account. While can make deposits and withdrawals, you cannot write a check. Note that there could be a fee in case your balance falls below the stipulated minimum. A record of transactions in such accounts is entered in a passbook or can be provided to you in a monthly/quarterly statement.

Basic checking accounts: These are no frills accounts which offer you certain basic functions. The cost of operating such an account is very low. You can write checks through this account. However, there is a restriction on the number of checks that you can write in a month. Also, such accounts do not pay any interest.

Interest bearing checking accounts: You enjoy the privilege of a host of services including writing unlimited checks. But all this entails a higher cost. The interest that is paid on the account is dependent on the quantum of balance in the account. In case the balance falls less than that stipulated, a monthly fee is charged. You can write a number of checks in a month and avail all the services attached. If you choose to open this type of account, you will also earn some interest.

Certificates of deposit: This type of deposit is held for a specified period, hence referred to as Time Deposits. Ranging for a period from 3 months to 6 years, these accounts offer a high rate of interest. The high interest rate is compensation for the time your funds are locked in. A longer deposit duration fetches you higher interest rates. In case you need to withdraw your money before maturity, you will have to pay a heavy penalty. Thus, you will not only forgo your interest amount, you will also lose some of your principal amount.

Money market deposit accounts: Such accounts invest your funds in the short-term debt market. This include, but are not restricted to Commercial Paper, Certificate of Deposit and Treasury Bills. To earn interest on such an account, you need to maintain a high balance. The interest rate on the money market deposit accounts is higher that the rate of interest on checking accounts. While operating this account, there is a restriction imposed in check writings. Three checks and six total transfers is all that you are entitled to per month. All of the above five types of accounts are secured by FDIC to the extent of $100,000.

Bank accounts take the form of savings accounts, checking accounts, money market accounts and certificate of deposits. Each is designed to meet a specific purpose. From daily spendings to savings in the long term, there is one to meet your every need.

It is best that you weigh your needs and then choose the type of account. Usually, the choice is driven by factors like interest rates and the accessibility to funds.

Let’s check out which type of account suits you the best based on what these accounts have to offer.

Savings Accounts
If you want to earn some interest amount while enjoying easy access to your funds, savings accounts will serve you well. In fact, some banks offer pretty good rates. The best part about savings accounts is they have the federal backing.

The only hitch with operating savings accounts is there is a restriction on the number of transactions in a month. If you transact through online banking, federal regulations stipulate that you can take money out of your savings account only six times a month.

If you are one of the many who is happy with interest earnings combined with safety, this is your obvious choice.

Checking Accounts
If you want to draw moneys for your daily spending, checking accounts are the best. The basic checking accounts don’t give you much interest. Interest bearing checking accounts do give a comparatively better interest rate.

With easy access to your funds, you can make transactions through ATMs, online transfers, personal checks and debit cards.

If interest is not your main concern and you prefer to have unlimited access to your funds, checking accounts are your best bet.

Money Market Accounts
These accounts fetch you higher returns, more so than savings accounts. But the caveat is you need to maintain a higher balance. The minimum balance in such accounts must be $1000 upwards. These accounts come with paper checks and debit cards as well. They offer you a comprehensive set of banking services including ATM access.

These accounts are flexible and fine tuned to meet your requirements. On some types of withdrawals, there is a limitation of up to six transactions per month.

Certificate Of Deposits
These are also called Time Deposits. The interest rates are linked to the tenure of the deposit. Longer tenure CDs fetch higher interest rates. Generally, the CD tenure varies between 3 months to six years. While the attractive interest rates can entice you to open these accounts, do keep in mind, that access to your funds is limited.

In case of premature withdrawal, you will have to shell out a heavy penalty. The perfect technique to enjoy the high interest while avoiding penalty is by laddering CDs.

Hold CDs of varying tenures, depending on your liquidity needs. While the short term CDs ensures cash flow, the longer duration CDs help you earn a higher interest rate. This way, you won’t have to break the CDs and pay a penalty fee.