Frequently Asked Questions and Modern Banking Myths
SECTION SIX: Frequently Asked Questions and Modern Banking Myths
1. What can I do if I am denied a bank account?
The bank is required to provide you with a valid reason. If the reason is insufficient credit rating, please read our article on how to get a copy of your free credit report online.
2. Do banks check my credit report before allowing me to open an account?
Eighty percent of the banks use the ChexSystems list to see if you have a clean history with depository accounts. Many banks will typically pull your credit as well before opening your account.
3. How do I know if my bank is giving me a decent interest rate?
Compare your bank's APY to our lists. If it is anything lower than our Savings, Checking, Money Market, and CD's, you might want to consider switching.
4. I was told of this one really neat internet bank paying 10% APY for my savings. How do I know if they are legitimate?
If something looks too good to be true, it is probably the case. Verify that the bank is FDIC (NCUA for Credit Unions) before you keep your money with them.
5. This FDIC bank looks very shady. How do I check if a bank is indeed FDIC?
You can check if the bank is FDIC here. For Credit Unions, you can find that here.
6. Is it legal for banks to deny me of an account because I am not a resident or citizen of the United States?
Unfortunately, banks can deny business to anyone although it is very rare. As long as you meet the requirement to open an account (age, valid passport, valid residence, etc.), they are usually more than welcome to accept your money. In the case that they deny you out of discriminatory reasons, we encourage you to file a complaint immediately.
7. How do I set up a direct deposit? Direct Deposit is set up with your employer. This will usually require your Social Security number and a voided check from your checkbook containing your bank's routing number and your account number.
8. How much tax do I pay for my interest earnings from my bank accounts?
Your interest earnings from banks are subject to the same income tax rate your pay on your tax bracket. Your bank is required to send you the interest earned statement on a 1099 form at the end of each year.
9. How do I deposit/cash a foreign check?
This differs from bank to bank, although most banks will refuse to handle a foreign check unless you have an account with them or the check is from their branches abroad. Even if the bank allows it, there will be a currency conversion fee and a waiting period of up to 60 days.
10. Should I bring Cash or Traveller's Checks when I travel abroad?
Limit cash to a few hundred dollars in cash. Traveler checks can always be cashed in a bank with your passport. Multi-national bank such as HSBC that allows you to withdraw from abroad. Just be sure to call them ahead of time to let them know or else they might freeze your account thinking it's fradulent.
11. How do I manage monthly bill payments while keeping money in a high yield savings account?
Read the article Simplify! Simplify! Simplify! on some tips to make this part less of a burden on your time.
12. What are the pro's and con's of having a joint bank account?
Joint bank accounts make things easier especially for couples. Read our article on Joint Accounts to learn more about the pro's and con's of doing this.
13. Is it safe to give out my bank number over the internet?
Only give out this information if necessary. Even in that case, double check to make sure that the browser page is secured before giving it out. A secured page usually has a "lock" on them looking like this.
14. Can I cancel a payment I made with a check?
Unfortunately, this is usually NO, unless if the check was not legitimate. Banks' policies do differ so always call your bank immediately if that happens.
15. I have a very bad experience with my bank. What can I do?
We always recommend that our readers approach the banks politely to solve problems. But in the case that doesn't work, you should file a complain with the Better Business Bureau and then send us an email. We will warn other readers against them.
16. I forgot to keep track of whom I wrote that last check to and for what amount. What can I do?
You can simply log on to your bank online and click on the transaction (when the check is deposited or cashed) to view a scanned image of the check - this is called check imaging. If it is not your signature or the check seems "altered," contact your bank immediately.
17. What are the requirements to open a bank account?
It depends on the type of account you want to open. You can read the article on opening a bank account for more details.
