Banks offer many different financial services. You may wish to compare the services and costs of several banks before choosing one at which to open an account. One bank may be more conveniently located than others; another may have more automated teller machines around town; a third may charge less to maintain a checking account; a fourth may allow you to do your banking from home via computer. Banks are competing for your business, so don't be shy about asking questions. Ask your foreign-student adviser for recommendations on local banks.
Before you select a bank and set up your account these are some questions you need to ask:
- Is there "Free Checking"? Are there monthly service charges? (Some banks offer students checking accounts with no service charge).
- What other services does this bank offer and is there a charge for them? (safe deposit box, exchange foreign currency, cashier's checks/certified checks)
Checking Account:
A checking account will permit you to write checks to make purchases and pay bills. Most retailers and service providers will accept a personal check drawn on any U.S. bank (it need not be a local bank) as long as you can show appropriate identification (passport, student identification card, or driver's license).
By using checks, it is easy to keep records of your purchases and payments. At most banks you need not keep a substantial sum (or "balance"") in the account-just enough to cover your checks and any fees the bank charges to maintain the account. Many banks offer "overdraft protection," enabling you to write a check that exceeds your balance with the understanding that you will pay interest on the overdraft amount. Finally, checking accounts have the advantage of providing you with immediate access to your funds.
Savings Account:
Unlike most checking accounts, savings accounts earn interest on the balance in the account. If you plan to bring money for the entire academic year or for your entire academic program, you should be sure that your money earns interest! You can withdraw money from an ordinary savings account, but you cannot do so by writing a check.
Certificates of Deposit:
Certificates of deposit (CDs) pay higher rates of interest than savings accounts, but your deposits must be made in certain amounts (usually in increments of $1,000 or more) and must remain in the bank for a specified period of time (usually a minimum of three months) before you can use them. The penalties for withdrawing money before the specified time has elapsed can be quite substantial. A CD account makes sense if you bring money that you will not need right away.
Safety Deposit Boxes:
A safety deposit box, available at most banks, is a good place to store valuable possessions such as the airline ticket for your flight home, foreign currency, and any important documents you brought with you.
Debit Cards:
Many banks will issue you a debit card also known as a checking card when you open your account. This card will allow you to withdraw or deposit money to your account using an automatic teller machine (ATM) and to make purchases at stores that accept the card. Some debit cards carry a credit-card logo (such as Mastercard or Visa), and can be used in place of a check or credit card.
However, debit cards are not credit cards and they can be used only to the extent that you have funds available in the account to which the card is linked. When you make a purchase, you will need to subtract the amount from your banking account just as you would when writing a check. The bank will automatically subtract this from you balance.
When you receive your card you will also receive a PIN number (personal identification number) that will allow you to gain access to the account.
You will be able to use your debit card in the ATM machines of other banks as well, but these banks will charge a $1.50-$2.00 service charge for any transaction. There is an ATM machine located on campus in Mark Clark Hall for your convenience. It is a Nations Bank machine, but it will accept cards from other banks.
IMPORTANT!! For security purposes it is very important that you: do not tell anyone your PIN; do not write your PIN on the card; use an ATM machine in a well lit area; avoid going to the ATM machine alone; try not to let people see you enter your PIN or how much money you are taking out of your account.
Credit Cards:
Credit cards will allow you to make purchases even when you have no money immediately available. Banks and other financial institutions, department stores, and gasoline companies all issue credit cards that can be used to buy goods. You are billed every month and are required to pay at least a portion of your balance each month. If you do not pay the entire amount due, interest (or a "finance charge") will accrue on the unpaid balance. The interest rate can be quite high, particularly if you have not established your credit worthiness.
The cost of credit cards varies greatly. The annual fees and interest rates charged by some financial institutions are much higher than others. Once you establish a "credit history" you should be able to obtain a card with a lower interest rate and little or no annual fee.
IMPORTANT!! Credit cards are convenient, but unless you are careful you may be shocked when you get your monthly bill. Keep all of your receipts to keep track of what you spend
Adapted from: NAFSA'S International Handbook, 1996. Edited by NAFSA: Association of International Educators