Banking in USA

Opening a Bank Account in USA

Two most prominent forms of banking options in USA are credit unions and commercial banks. Credit unions are local banks and are member of National Credit Union Administration (NCUA). Several large commercial banks in USA include Chase, Bank of America, Wells Fargo and PNC. A bank account is required to pay for rent and paying your dues. Apartments rarely accept credit payment and need payment by check.

Credit Unions

Most of the credit union offers you a saving/checking account with no minimum balance. You can also request for a few free checks. Additional checks needs to be ordered for a fee.

Credit unions also provide a unique way of instant withdrawal and deposit of funds across entire USA without fees. For example, I have withdrawn funds from my bank account in Pennsylvania from a credit union in Wisconsin immediately without paying any charge. You can also do deposits with affiliated credit unions listed on bank’s homepage.

When you new in USA, you do not have enough credit history to get a credit card. After initial 2 months period you can request your local credit union for a card.

   Tip- If you have any traveler check or cash in traveler card, you can deposit that money in your bank account without any fees.  Traveler card is safe, cheap and easier to use any place like a preloaded credit card.

Commercial Banks

Several of the commercial banks offer wide array of services. Chase, PNC, BoFA offer a free checking account for students. Advantage of commerical banks are wide array of services from banking, investment, retirement. Typically commercial banks are good after you graduate and start earning a good income. There is a fee to maintain account and waived only if you have a direct deposit from your employer (University or Company).

Fees to Watch For

Overdraft Protection Fees –  In case you do not have sufficient funds to clear check in your name, over draft protection withdraws funds from your saving account to clear a check. If no overdraft protection is set, then you end up in paying heavy penalty about 25 $ for each check bounced.  It is best to enroll for overdraft protection immediately when you open a new bank account. PNC bank for example allows only initial enrollment, afterwards its impossible. Banks annually make billions of dollar due to this fee. Read an article in NY Times here.

   Tip- Apologize to the person whom you have issued bounced check.  In case this person is your renting agency, this may save you from another fine. Don’t forget to submit funds and issue another check.

Debit Card Fees- Check for any quarterly fee for minimum use. Credit unions again do not have these fees. Fees could range anywhere from 8-10$.

Extra Checks- You can request bank to send check each month to your renter for free. You can also pay your telephone, internet, electricity bills for free online. Still if you are planning to live in USA for longer than 6 months, its good to have more checks. Banks charge a 10$ fee to get 5 booklets of checks.

Fees for Minimum Balance or Transactions- Check with your bank about these fees. Bank information booklets are pretty thick and easy to get lost. You can shop around by calling each bank and asking for fees. Settle for the ones with minimum fees and good services.

I personally use Chase, credit union for general banking purposes. Chase has excellent customer support and website. Credit union offers me low interest car loan. I also have account in Charles Schwab  for investing, which also feature free checks, no maintenance fees, free ATM withdrawals in entire world.