What you'll find here

From savings accounts, to checking accounts, and everything beyond. Here, we cover the ins and outs of the system to help you make the most informed personal banking decisions.

Banking 101

Before you open an account, make sure you have a good understanding of the ground-level details:

How many bank accounts should I have?

Typically, the average person has two active bank accounts – one for checking and one for savings. Your checking account is where most of your living transactions take place: direct deposits and withdrawls. The savings account is normally for building a pool of currency over time for a specific purpose, or in case of emergencies. You can open any additional accounts if you choose to, but depending on your situation, you might need the approval of your bank. Some require a certain amount of money to be deposited before making the account active.

Can I have open accounts at two separate banks?

There's nothing keeping you from opening accounts at different banks. Some people might want to keep business funds separate from personal funds, and alternating between banks helps them to better organize. Others may want to open a joint account with a spouse or partner, and doing so at a different bank keeps them from having to change a system they're already comfortable with. Whatever your reasoning, be sure to adhere to bank policies and do your best to avoid overdraft penalties.

What is overdraft?

Overdraft occurs when you don't have sufficient funds (NSF) in a particular checking account to cover a transaction, resulting in your balance ending up in the negative. For example, if there is $100 in your checking account and you make purchases totaling $110, your available balance would read -$10.00 until more funds can be deposited. And if you were to deposit another $90 into the account, your available balance would read $80. The $10 difference is due to the overdraft. Some banks charge an additional overdraft penalty fee if you don't bring your account balance back to $0 or higher within a number of days. There are two alternatives to overdraft. One is when your attempted transaction is denied when you run out of money (check bounces, debit card rejected). The other is getting overdraft protection, which opens any secondary accounts to be accessed for reserve funds if needed. Typically, your savings account can be tied to your checking account for overdraft protection.

Can my bank close my account without notice?

A bank will not normally close an account until it has provided you with at least 14 days notice. If there is an issue with your account, you will most likely be made aware of it well ahead of time. In which case, the bank will allow you to fix the problem or close the account yourself. Even if there is a rare case in which your bank does happen to close your account without your notice, it would be due to a court order.

Latest Banking Articles

Balancing Your Checkbook in the Era of Debit Cards and Online Banking

Although balancing your checkbook is very much out of fashion due to online banking, it serves an important purpose in…

Trent Hamm
Trent Hamm
Jan 20, 2020
Use Automatic Payments to Keep Finances on Track

Automatic payments help keep finances running smoothly with no late fees or overdrafts. With smart spending and autopay, managing money…

Trent Hamm
Trent Hamm
Jan 14, 2020
How to Send Money Securely Through the Mail

The holidays and birthdays are perfect times to send checks to family and friends in the mail. Take extra steps…

Trent Hamm
Trent Hamm
Dec 20, 2019
How to Invest in Real Estate

If you're thinking about investing in real estate to boost your wealth and diversify your portfolio, start by learning the…

Beth Casey
Dec 17, 2019
The Simple Dollar Awards of 2020

Intro TK I. Best Apps of 2020 Best Banking Mobile App – N26 N26’s gorgeous, minimalist app does for mobile…

Adam Morgan
Jan 20, 2020
E*Trade is Offering a Sweet $100 Cash Bonus on New Accounts

Now through January 6, E*Trade is offering an extra $100 for customers who deposit or transfer a minimum of $5,000…

Angelica Leicht
Nov 15, 2019