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Opening a Bank Account | | A bank account with a cash balance provides financial legitimacy, as well as convenience, and is the first step toward establishing a positive credit history in the United States. There are many banks from which to choose and none will refuse an application from someone with cash to deposit. So, do your research to find the best value and most favorable terms you can.
Most likely, you will want at least two accounts, typically with the same bank, for convenience:
- A checking account enables you to write and cash checks — and to access your money from an ATM (cash machine). Often, your ATM card will also serve as a debit card, which deducts money from your account whenever you purchase something at a store. Be careful not to use your debit card online or on the phone, unless you feel comfortable with the security environment. Unlike with credit cards where you have little or no liability, if someone steals your debit card number and makes a phone or online purchase, the money is immediately withdrawn from your account and may not be recoverable.
- A savings account typically has strict limits on the number of checks you may write, but offers interest rates that scale up with your deposit balance. Your ATM card should be able to withdraw from your savings account, too. If you are willing to keep a sizeable cash balance (say, over $1,000) in your account, you might consider a money market savings account, which bears a higher interest rate.
All reputable banks have brochures that tell you about their different accounts, including detailed lists of every single fee they charge and terms of the use of their ATM machines. Some banks, for example, waive ATM fees even if you withdraw money from the ATM machine of another bank. Others offer "relationship banking" with reduced fees or improved interest rates if you have multiple accounts or loans with the bank. Above all else, make sure you deposit your money in an account with a minimum balance that is realistic, or you could end up wasting money on fees.
Two other common types of accounts offered by your bank or other specialized financial institutions:
- Retirement accounts. If you plan on staying in the US permanently, then consider an Individual Retirement Account (IRA) or, a 401(k) plan. COMSYS will provide full information on any plan it offers. Employer plans often have the advantage of matching dollars. At COMSYS, if certain conditions are met, we match $0.25 for every $1.00 you put into the plan. That represents an immediate 25% return on investment, plus normal portfolio growth. Most retirement investments are also tax-deductible.
- Brokerage accounts. If you are new to the US, do not be tempted by the stock market or by mutual funds. Conserve your cash. You will need the cash.
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