How to Get a Checking Account Online

So much consumer banking is now being transacted online that the whole idea of “online checking” can be confusing to some people. They, for example, may have finally decided that they want to “get an online checking account.”  However, they might not know that there are two ways they can do that.

One way is to simply notify their financial institution that they want to have access to their checking account through the Internet. There will be procedures such as furnishing identification, being given a username, and creating a password. Once that is final they can review their statement online at any time from any Internet connection. Depending on the bank’s policies they might also be able to process transactions electronically. However, that checking account remains a traditional one, not what is known as an “online checking account.”  Therefore it will have the fee structure which conventional checking accounts, operated in brick-and-mortar facilities, carry.

The second way to get a checking account online is to apply for a checking account which is both online and is operated totally on the Internet. There is no physical bank to go into and no tellers beyond bars or bullet-proof glass. Instead, all communication about the account is done online or by phone. Because this eliminates real estate costs, the fees are less or non-existent. Some accounts yield interest. Others provide bonuses and rewards.

Where to Open That Totally Online Checking Account?

Because this may be new to you, you might want to stick with the financial institution you know. That is, if it provides this service. You can actually go to that familiar setting and open your account. Or you can do that with your current financial institution right on the Internet through a computer, smartphone, or tablet. In both cases, usually you would be required to furnish your full name, date of birth, social security number, email address, and a form of identification such as the driver’s license number. Also, a deposit is necessary. How much depends on the financial institution’s policies.

Another way to get an account is to approach this as you would when selecting a credit card. You would “shop around.”  There is a broad range of features with online checking accounts just as there are with credits cards. Some of the information about the options might come from your financial advisor, snail mail, ads in print or on the web/mobile. Or you might find that information online under keywords “online checking accounts.”

Once you make your choice you would set up the account the same way as described previously. If the institution has brick-and-mortar facilities you can swing by it and do that in-person. Otherwise you provide the information and deposit online. Funds can be transferred from your current bank or you can snail mail a check or money order.

The process of going online, whether you maintain your traditional account or set one up one totally transacted on the Internet, does not require you own a computer or gadget. Many public libraries furnish complimentary access to the Internet for those with a library card. Also, free email addresses are available from Internet providers, ranging from Google to AOL.


Best Checking Accounts for Students

Banks recognize that students who open checking accounts with them could develop into lifetime customers for services ranging from mortgages to retirement savings vehicles. Therefore, banks have the incentive to accommodate students. But, it is up to the students to shop around for which institutions provide the best deals for their specific needs. Not every student financial situation is exactly alike.

However, essentially all students should be looking for as much “free” as possible. That would include no fee to open and maintain the account, to have a low average balance, writing unlimited number of checks, obtaining a debit card, unlimited transactions at the bank’s own ATMs, online access and bill payment, and text or email notification when the account dips below a certain point. The more of those features banks offer free, the better.

But free usually comes with hitches. That is why students have to read the fine print or what lawyers call “terms and conditions.”  Fees could be imposed if the balance goes beneath a stated minimum. Although there might be unlimited check writing, the cost for pre-printed checks could be higher at one bank than another. Potentially costly could be what one bank might charge for “bounced” checks, that is those sent without sufficient funds (NSF) in the account. Students should hunt for “forgiveness” options, such as no penalty for the first offense.

For some students, features that are worth hunting for would include ability to link their credit cards and saving accounts to their checking account and allow transfer of funds. That prevents checks from bouncing and incurring penalties. Usually a fee is charged for the transfer but that can be lower than the one for NSF. Students have to comparison shop for those kinds of fees. Sometimes free, sometimes for a fee, students can also arrange for funds to be regularly transferred among accounts. For example, part of their earnings from a part-time job deposited into checking can be put into savings. Useful for those who attend school and live in different locations or travel is refund of transaction fees at ATMs which are not part of the bank’s network. According to NerdWallet those can range from $2 to $3.00 domestically and up to $5 a transaction internationally.

But the most important feature for students who are beginning to acquire financial literacy is the sense that the bank cares about them and is equipped to respond to their concerns in all mediums, be it the smartphone or onsite. Students have to feel comfortable asking questions such as, “I am running up a credit card balance. What can I do?”  Based on the responses they receive, they will likely make the decision to remain a customer or go shopping again for another bank when they get their first job.

Checking Accounts for Kids

One tool for children, whether still in elementary school or teens with part-time jobs or start-up ventures, to develop financial literary is through having their own checking account. Also, for those who already are regularly receiving income, that might be a must-have. To reduce processing costs, more organizations only pay through direct deposit into a checking account, rather than through paper checks. Also, increasingly teens find they need to work in order to pay for 21st century necessities such as a smartphone. In addition, minors can begin to build their credit history. In lieu of a checking account they could have the income electronically onto a prepaid card. The disadvantage is that often entails fees for each transaction.

Some financial institutions, ranging from banks to credit unions, have recognized that parents and guardians want children to learn about money. Also it has become difficult in our capitalist society to navigate as an “unbanked,” that is, someone with no formal financial identity. Therefore, a growing number of financial institutions have created traditional and online checking accounts tailored for minors. This is useful for them both to attract the next generation of customers. In addition, there is a branding or public relations payoff of demonstrating their mission of helping young manage money.

However, not all financial entities have moved in this direction. Adults may have to shop around for this option or, if they have a good relationship with their financial institution, request that it provide this special service. Also, online or Internet banks which operate only in cyberspace, not through brick-and-mortar branches, may provide the service. One way to find out about the online option is to surf the web using keywords such as “Online checking accounts for children (or minors.)” Online accounts could pay interest. There could be an advantage, though, in financial literacy lessons to open an account in-person, giving the minor a direct experience in processing a financial transaction.

Because of state laws, parents or guardians are co-signers for the account. The children’s accounts have features tailored for those new at managing money. Those include the ability of the co-signer to monitor balances and all transactions. In addition, they are custom-made for small budgets, often including low or no monthly fees;  low or no minimum balances; unlimited number of checks can be written; debit cards; and complimentary ATM cards which can be used anywhere in the U.S.

As with all financial decisions, comparison shopping is recommended. Kids who participate in the search could absorb a lot about the exploding kinds and number of options in financial services. In itself, that could be quite an education.

Banking Products for Life Stages

One thing you can say with complete certainty about life is that it’s completely unpredictable. You never know what’s coming or what’s around the next corner. This time next year, you could be in a totally different job, or possibly even out of one. You could wind up married or starting a family. You might be renting a one-bedroom apartment or pulling together a down payment for a house. Or let’s face facts — you could be dead.

The point is that you have no way of knowing what your situation might be down the road, so you have no way of knowing what sorts of financial options you’ll need. Thankfully, there are plenty of choices for any life stage, whether you’re out making deliveries on your paper route or shaking hands with soon-to-be former colleagues at your retirement party.

The infographic below maps out some typical life stage banking products. And since risk is always a factor to some degree, whether it’s the risk that your investment could lose money or the risk that it won’t keep pace with inflation, each product has a corresponding risk meter. Also bear in mind as you look over the list that these are simple guidelines, and not every product is “locked in” to a specific age range.

If you have any questions about the information below, please feel free to contact a Bank5 Connect representative at 1-855-552-2655.

Checking Accounts Versus Savings Accounts

The line between checking accounts and savings accounts seems to be blurring. For example, many online checking accounts pay interest. Also, the interest paid on savings accounts currently is so low that people are wondering why even bother setting up and maintaining one of those. Yet, there are major differences between checking and savings accounts. Understanding those helps you make smart decisions about your financial affairs.

In essence, whether you have a traditional checking account housed in a brick-and-mortar institution or an online one operating solely in cyberspace, its purpose is to facilitate financial transactions. You use it to pay bills, withdraw cash you need, transfer funds, and deposit or have automatically deposited payments made to you. Those incoming funds could range from print paychecks to electronic payments from Social Security or PayPal. There are no limits on the number of withdraws, transfers, or deposits. The fees involved and any perks, such interest and bonuses, depend on the specific bank. Given the range of options, it could be worth your time to shop around for the best deal for your needs.

On the other hand, savings accounts, be they in your trusty bank branch or only online, are structured and regulated for “housing” funds that you hope you will not need to tap into for the near future. You might have a specific short-term goal such as saving for a down payment on a house or a child’s wedding. In return you receive interest. Unfortunately, at this time, most rates are under one percent.

If you sensed you would not be needing that money for a longer period, say a year or more, then you would probably choose a Certificate of Deposit (CD). In exchange for having those funds to use for a guaranteed period, banks pay higher return rates on CDs. Should you have to gain access to the cash sooner, you would likely pay a penalty.

In the U.S., savings accounts come under Regulation D, 12. That is what makes this sort of account so different from a checking one. Regulation D limits the amount of withdraws and transfers to six a month. That means that most people, with the average amount of bills to pay, cannot facilitate that through a savings account. Violations of Regulation D could result in a service charge or downgrade of the account to a checking one. However, there is no limit on the number of deposits. The terms and conditions, including fees and the rate of interest, vary among financial institutions. Some consumers are finding higher interest rates through online savings accounts.

Yes, checking and savings accounts can be linked. That can prevent overdraft charges in the checking account. However, the two are very different entities. Rarely can they substitute for one another. For example, those intending to “save” and maintain that level of funds usually cannot accomplish that in a checking account. On the other hand, savings accounts are not made to process the amount of financial transactions most Americans are responsible for.

Multiple Sources of Income: Spreading the Risk

The Great Recession delivered a wake-up call for many employees, the self-employed, and those living from the passive income of investments. They recognized how quickly they could go from financial security to insolvency. All they had to do was lose a job, a few clients or customers, or the value of the assets in their portfolio. In her 2013 book Down the Up Escalator, money expert Barbara Garson chronicles those horror stories. One solution for preventing another personal finance disaster is to develop multiple sources of income. Instead of being totally dependent on one full-time job, for example, those who multi-stream income create a variety of other ways to make money. With a global economy continually disrupted by technology, this approach could become the new normal. Here are four steps for making this shift.

The First Step

The first step is to improve the security of the main source of income. If that’s serving three major clients in a consulting business, monitor what more can be done or done differently. Never should the quest for additional income endanger that. Unlike what will be tried, that represents a known. It’s a proven source of revenue.

The Second Step

The second step is to investigate how existing experience, skills, resources, and contacts can be transformed into money-making possibilities. The options include:

  • Searching for a full-time job after a time of self-employment, part-time work, or temping. A changing economy means demand’s always changing. Those shut out a few years ago, such as truckers, could now be in short supply. The mistake is to rule out returning to full-time work in a field that had been hit hard during the downturn. If hired, the objective should be to retain as many current income-producing situations as possible. For example, the former truckers might have been painting houses, cleaning basements, and working part-time at a moving firm. They should push to have that re-scheduled around their new hours.
  • Adding on freelance, part-time, and temp opportunities. Technology and global time zones make it possible to work full time and do plenty on the side. That ranges from developing apps for a smartphone to teaching English as a Second Language from a home office in New Haven, Connecticut, to students in China. Online sites such as craigslist provide free worldwide help-wanted ads for all kinds of situations. In addition, most industries have specialized free global listings, such as and for writers.
  • Socking away more in financial investments. Having multiple sources of income can free up funds to put in accounts such as retirement, which employers contribute to.
  • Investing in tangible assets. A common example is rental property. All that’s needed is the money. For a fee, management companies will take care of the rest.

The Third Step

The third step is to explore acquiring new skills. In this Do-It-Yourself (DIY) era, ambitious people are re-inventing themselves through free or low-cost training online or through books at the public library. Where there’s already an aptitude, the learning comes easily.

The part-time copywriter can develop comprehensive expertise in search-engine optimization (SEO). That could lead to owning and operating a side business in SEO, with contract employees doing the actual assignments. The full-time web developer can learn to code, doing temp assignments evenings and weekends. The dog walker can pick up the fundamentals of training, gaining experience and references through doing the service free.

The Fourth Step

The fourth step is to continually evaluate which initiatives are the most profitable. According to the Pareto Principle, 80% of outcomes, including revenue, come from 20% of inputs. Applied to business, that means that smart managers will focus primarily on the 80% of the tasks, clients, or customers that yield the most results.

Over time, it could turn out that buying up rentals is more lucrative than working full-time as a teller in a bank. The freelance coding is where the most profit is coming with the least hours worked and the least stress. Therefore, the coder might look for a full-time job doing that or create a startup for that business. The dog walker might invest in advertising the more lucrative training part of the business.

Few human beings welcome change. Yet, establishing multiple sources of income can open up fresh, lucrative options. Next would come the decisions about which one or ones to make priorities and which to treat as additives. In the wings could be major career shifts. Those could represent an awesome payoff on the initiative and courage to reach beyond traditional approaches to build financial security.

Debt After Death

Personal debt has become pervasive. All generations now tend to carry that burden. And, death, of course, is inevitable. Therefore, a financial question frequently being asked is: What happens to the debt after a person dies? Are the survivors stuck paying it off?

The issue emerges, for example, when the terminally ill want to get their financial affairs in order. It also gets factored in when the healthy calculate how much life insurance to buy. They wonder if the amount should cover what is likely to be their average outstanding debt so that their loved ones are not saddled with it upon their death.

The simple answer is that all the unsecured debt belonging only to that person vanishes upon the death. Therefore, that is one less thing for the dying to fret about. And in calculating the amount of insurance policies, many debtors will not have to factor in unsecured debt. “Unsecured” means no assets backing it as collateral, such as real estate, a vehicle, or a business. Therefore, the credit card companies, which provide those lines of credit unbacked by anything, are out of luck. They may attempt to intimidate, with threatening letters and phone calls, the survivors. They can contend that the survivors must pay off the credit cards. However, credit card companies have no legal claim. Should the harassment continue, survivors can send a certified letter stating they know their legal standing and that they are not responsible for the debt.

But most things aren’t simple. Neither is debt upon death, which is governed by state law. For example, that $40,000 in credit card debt might have been charged on a “joint account,” where more than one person signed for it. That other person might never have used the account or has even forgotten co-signing. But state law mandates that he or she must pay off the balance. This happens frequently in a marriage, a divorce in which one party agrees to pay off the debt but dies before doing so, when parents co-sign for children, and when adult children co-sign for their aging parents. Obviously, co-signing is never a good idea. The financial industry is innovative and there are always new vehicles for managing and monitoring someone else’s account without becoming a co-signer. Some of those are apps for the smartphone.

Those who are “authorized users,” not co-signers, do not inherit the debt. That holds whether they use the card or not. They could be liable for criminal charges, though, if, as authorized users, they run up extraordinary charges when they know the person is dying and won’t be able to pay off the balance. Also criminal is to use the card after the death.

Should there be an estate, then before heirs get anything, creditors have first grabs, beginning with the secured ones. If that auto loan is for $10,000 and car’s market value is $3,000, then the finance companies will try to make themselves whole by deducting the remainder from the estate. Should the estate have $30,000 in cash and the only creditors are credit card companies with a collective balance of $25,000, then they can collect on that directly from the estate. That leaves the heirs with only a $5,000 inheritance. If there is only $10,000 in cash but there are assets such as paintings, then those credit card companies will legally require that the assets be sold and they be reimbursed from the proceeds.

Things get a lot more complex in what are known as “community property states.” That means that everything, both assets and liabilities, is shared by both husband and wife. That traditionally holds, even if the spouse’s name is not on an account such as a credit card. Those states are Alaska, Arizona, California, Idaho, Louisiana, Nevada, New Mexico, and Texas. That is why those planning to marry, who are already married in community property states, or who relocate there should consult with a lawyer. They need to know in detail what their financial obligations are, what they can be in the future, and what ways there are to protect themselves from the others’ debts.

There are those, of course, who want to do the “right thing,” not just comply with the law. They include relatives who pay off credit card debt, even when not legally obliged. One motivation is to “clear” the deceased’s name. Creditors welcome that behavior and will tend not to persuade the person to do otherwise. Ethics and legal are often far apart in what is required.