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What to Know Before You Open a Bank Account
Introduction
The Missouri Bankers Association is a trade association that represents the interests of member banks
that do business in and have locations in Missouri. The MBA does not provide legal advice and does not
regulate banks. This guide (What to Know Before You Open a Bank Account) is intended to inform the
public generally about bank accounts. It is general in nature and is not customized for any particular size
or type of bank. The term “bank” is used, which also refers to savings associations. The information in
this document reflects laws and regulations in effect as of the date and version number shown at the
bottom of the page.
Establishing a bank account is the safest and most convenient way to manage your money and start
saving for future expenses. There are banks of all sizes and types, and you might find that one bank fits
your needs better than others. Your location and your future plans may also impact your decision.
Almost all banks have websites that show their locations and hours, and the types of bank accounts that
they offer. Doing some research ahead of time to find the bank that might best fit your needs and types
of accounts you might be interested in will help you prepare for when you go to the bank to open an
account. You might not be eligible for every type of account that a bank offers. While banks have
similarities due to laws and regulations that all banks are required to follow, there are differences in
types of accounts, bank policies and procedures, and documentation. Below is information that is
typical. It is important to know that a bank might have additional or different procedures and
documents beyond what is listed below. You will be responsible for the account as if you were an adult.
Information You Will Need to Provide the Bank
Every bank will require you to provide them with your “Identity” information:
• full legal name
• date of birth
• taxpayer identification number (commonly known as your Social Security number)
• current residential address, which cannot be a post office box
Additional identity information may be requested by the bank. Depending on the bank’s procedures,
some type of the following (“Identification”) information or documents will be required:
• Identification – required by federal law/regulation, most banks will request a government-
issued picture ID (such as a driver’s license) and another form of identification. The purpose is
to allow the bank to verify the identity information you provided above. If you do not have a
driver’s license, many banks also accept a state identification card or passport. If you do not
have any of the above, some banks may allow other forms of identification, such as a birth
certificate, Social Security card, etc. If you do not have any of these documents, contact the
bank to ask if they have any alternate methods to verify identity information.
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Documents You May/Will Have to Sign at Account Opening
• Verify Social Security number by signing a W-9 – required by IRS regulations to certify that the
Social Security number is correct – this may be part of another document.
• Signature card/account agreement – there may be one or more documents to sign showing the
terms and conditions of the account and details of your responsibilities and the bank’s
responsibilities. The signature card is to be signed in the name and style that you will use to sign
anything in connection with the account. The signature card reflects the legal ownership of the
account with you as the account owner.
• ATM/Debit card application – depending on the bank, you may be able to receive an ATM card
or debit card to use with your account. An ATM card permits you to conduct transactions at
ATM machines to withdraw cash or check your balances. A debit card may be used at
merchants and online to purchase merchandise, and also at ATMs.
Types of Accounts
Banks offer several different types of accounts. “Savings” accounts usually pay a higher rate of interest,
but have limits on transactions that can occur every month. “Checking” accounts may or may not pay
interest, but transactions may be unlimited. A similar type of account might not have paper checks, with
electronic access through a debit card. Banks might have a certain type of account that better fits your
needs, so it is important to know how you intend to use the account and what types of transactions you
think you will have going in to the account (deposits) and coming out of the account (debits). For
example: do you think you will need to use paper checks to pay others? Will you have regular deposits
of some type? The bank’s customer service representative can explain the types of accounts.
A problem that customers can encounter is when there is not enough money in the account when some
type of debit transaction reaches the bank. If the bank stops the debit from occurring because there is
not enough money in the account, you may be charged a fee by the bank. If the bank does allow the
transaction to go through, that may create an “overdraft” which would result in a negative balance in
the account. For example, if you had $10 in your account, and used your debit card at a gas station for
$20, and that transaction went through, the account would be negative by $10. The bank would charge
an overdraft fee, and you would be required to pay the fee and deposit money to bring the account
balance back above zero. It is important to understand how this works for the account that you open.
Account Information You May Receive at Account Opening
Depending on the account type and terms, there are several disclosures that are required by federal
laws and regulations that will be provided to you at account opening. They may be separate pieces of
paper, or they may be part of a “booklet” containing all the disclosures. These disclosures generally
inform you of the various terms and conditions associated with the account or service provided. Read
them carefully and ask questions if you do not understand. They may include:
• Truth in Savings Disclosure – this disclosure contains information about the interest rate (if any)
and any fees associated with the account, along with any restrictions on how the account can be
accessed. Other information will be included related to the account type, including information
related to any minimum balance dollar amount requirements.
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• Funds Availability Disclosure – this describes the bank’s “funds availability” policy related to
deposits you make into the account. If a check is deposited into an account, this document will
describe when those funds will be made available for withdrawal (when they can be accessed).
On occasion the timeframe will be longer if the bank places a “hold” on a check deposit. If that
happens, the bank will provide you with a notice that will state the day when the funds from
that check will be available for withdrawal. Types of deposits other than checks may be covered
by this disclosure or listed in another disclosure. It is important to know that funds deposited
into the account are not always immediately accessible to be withdrawn.
• Electronic Funds Transfer Disclosure – this document describes information about the account
related to electronic access – whether by debit card, ATM card, or an automatic deposit or
withdrawal (referred to as “ACH”). You have responsibilities to promptly report to the bank any
unauthorized transaction on the account, which may occur from a lost or stolen debit card, a
merchant data breach, etc. Make sure you know how to report a lost or stolen card, or an
unauthorized transaction or other error on your account. You may also be given a document
called “Opt-In Notice” or “Consent Notice” related to whether or not you want to authorize the
bank to pay certain transactions (one-time debit card and/or ATM transactions) that will cause
the account to be overdrawn (and for the bank to charge an overdraft fee). There is no
requirement that you authorize these transactions; it is your choice. For some accounts, it is
possible that the bank will not permit the account to be overdrawn.
• Privacy Disclosure – this describes the bank’s policy associated with the customer information
the bank collects and whether the bank shares certain types of customer information with third
parties (marketing companies, insurance companies, etc.). The notice will provide a method for
you to limit information sharing with third parties when that is a choice you have.
When an Account Might be Closed or Restricted
Just because a bank opens an account doesn’t mean it can’t be closed or restricted by the bank in the
future. A bank might close an account if it frequently has a negative balance, or if the customer is not
using the account according to the account terms and conditions, or if there is suspected fraud
associated with the account, among other reasons. The bank might also restrict some types of access to
the account, including freezing or revoking a debit card. It is important to contact the bank if you
encounter any difficulties or don’t understand something that is happening with your account. It might
be possible to switch to a different account type that is easier to manage. If your account is closed for
mis-use, that could prevent you from opening a bank account in the future.
Important Things to Remember!
• Ask Questions! Be sure you understand all the costs associated with the account, including any
cost to order checks, ATM fees, monthly or per-transaction fees, overdraft and insufficient funds
fees, etc. Ask about differences when using the bank’s ATMs or when using ATMs that are not
owned by the bank.
• Retain Bank Documents: Keep all the disclosure documents to refer to when questions arise. If
something changes on the account relating to any of the disclosures provided above, the bank
will generally send written notification to you 30 days in advance of the change. This notice may
be provided separately or with a monthly bank account statement.
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• Maintain Minimum Balances: Be aware of any minimum balance requirements, as stated in the
Truth in Savings Disclosure, and try to keep your balance above that amount.
• Review Bank Statements: Carefully review your bank account statement every month. Your
statement will show details of deposits, withdrawals, and fees affecting your account. It is your
responsibility to assure that funds being deposited to and withdrawn from your account agree
with your records or knowledge. You might find it helpful to keep your debit card receipts and
other documents to match up with your statement each month. If there are any discrepancies,
contact the bank immediately.
• Be Financially Responsible: Keep track of the balance in your account on an ongoing basis to
ensure transactions will not be rejected or cause an overdraft. Banks typically offer various
methods by which you can regularly keep track of balances in your account. Balance inquiries
are a “snapshot” at the moment of the inquiry, and will not necessarily reflect transactions that
are pending that have not yet affected the account balance – whether a deposit to or a
withdrawal from the account. Ask if the bank has any “alert” features that would notify you
about low balance amounts, suspicious transactions, etc.
• Understand Bank Overdraft Policies: Understand what the bank’s policies and practices are in
relation to checks and other transactions that might overdraw the account or be returned due
to insufficient funds in the account – there are fees that are associated with overdrafts and
returned items that can add up quickly.
• Protect Your Information: Be very careful with whom you share personal and confidential
information about yourself and your account, such as account number, debit card number, PIN,
Social Security number, etc. There are individuals that try to “trick” bank customers into sharing
this sensitive information in hopes of hacking in to the account and taking funds. Banks do not
directly contact their customers after account opening to request such information. If you have
an ATM or debit card, keep it secure and keep the PIN information separately from the card. Be
Aware and Stay Alert!
• Keep Bank Up-to-Date: Notify the bank of any changes in your contact information including
mailing address, email, phone number, etc.
Prepared for Missouri Department of Social Services by:
Missouri Bankers Association
207 E. Capitol Avenue
Jefferson City, MO 65101
(573) 636-8151
www.mobankers.com
