Five Things to Watch Out For When Opening a Bank Account

Opening a new bank account may not be something that takes up much of our thought. Whether we want to take advantage of certain incentives and rewards or want to spread our assets across multiple banks, we have the power to open as many accounts as we would like.

When opening a new bank account, however, it’s important to stay on guard. Yes, it may seem like an innocuous process, but several things can trip you up when opening your new account. By being proactive, however, you can mitigate your risk and safeguard your future financial health.

Protecting Yourself When Opening Your New Bank Account

First, you will want to account for any maintenance fees. Some bank accounts have different types of maintenance fees just for holding an account with them. These monthly maintenance fees can be minor, yet they are real fees that can eat into your bank balance. In a low interest rate environment, any interest income that you obtain may not offset these fees.

The good news, however, is that some banks allow you to waive these maintenance fees under certain conditions. For instance, the fee may be waived if you have one direct deposit into the account per month. They may also be waived if you keep a balance above a certain threshold. Make sure that you read the fine print so that you can avoid these pesky maintenance fees.

Another thing to closely monitor when opening a bank account is overdraft protection. Overdraft fees can be much more substantial than maintenance fees. Moreover, you can get charged multiple overdraft fees in a single day. These costs can quickly add up.

All bank accounts have overdraft fees. That being said, you’ll want to see if your targeted bank account offers overdraft protection. As just one example, your bank may be able to issue you a line of credit that can cover any overdrafts. If you are opening checking and savings accounts at a particular bank, you may also be able to link them so that your savings account can cover an overdraft of your checking account. Simply put, make sure that there is overdraft protection before opening your account.

Next, be on the lookout for a bank account that offers a wide ATM network. Even though many of us are less reliant on physical cash, there may be times where you need to get cash in a hurry. If you open a bank account with a narrow ATM network, you’ll have more trouble finding an ATM from your bank. In all likelihood, you’ll need to use another bank’s ATM, which results in fees from that bank and your bank. To avoid this situation, open an account with a bank that has a wide ATM footprint.

Fourth, make sure that your bank has an easy-to-use website and mobile app. Increasingly sophisticated digital technologies and our busier lives make it extremely convenient to bank without walking into a branch. Because of this, keep an eye out for banks that offer great digital tools. You’ll want to make sure that these tools let you do everything from check your balance, deposit a check, and transfer money.

The good news is that almost every bank offers websites and mobile apps. So when doing your research, get a sense of which banks offer the most features and most seamless experiences. Doing this will help you avoid headaches in the future.

Finally, make sure that you are taking advantage of incentives and rewards. These incentives and bonuses send you cold, hard cash that you can spend however you’d like. For instance, Mashreq Bank offers an AED 2,000 joining bonus for opening up an Instant Account. Make sure that you shop around and find the incentives that are most attractive to you. As you’re doing this, however, make sure to read the fine print so that you actually receive the incentive.

Safeguarding Your Wealth

Opening another bank account can be a great way to safeguard your wealth. When doing so, however, make sure to protect yourself through the tips above. By taking your time and keeping these insights in mind, you’ll be able to select the best bank account for your financial needs.

Soulwallet is a personal finance comparison portal in the UAE. With a team of “out of the box” thinkers and a deep understanding of the UAE consumer banking industry, we help customers make the best choices while shopping for financial products such as credit cards and loans.