How to Open a Bank Account

Image Gallery: Banking This little piggy might be cute, but he's a poor substitute for the security of a bank account. See more pictures of banking.

Fires, floods, hurricanes, burglars, you name it -- for cash stashed in a shoebox in your closet, potential threats lurk everywhere. You need a safer place to hide your hoard. Your neighborhood bank is a great place to start.

Banks offer a safe haven for your money. They've got fireproof vaults, they're nearly impossible to break into and perhaps best of all, at least in the United States, their assets are guaranteed by the Federal Deposit Insurance Company (FDIC) for amounts up to $250,000. Banks offer your cash security and stability that no shoebox can.

You can open accounts for individuals, groups and businesses. There are many types of bank accounts available. The services and features associated with each vary from bank to bank. Regardless of the fancy names you might see associated with different accounts, there are only two fundamental functions of these accounts -- credit or debit.

A debit account means the bank owes the customer the amount listed in the account. A credit balance means the customer owes the bank that amount, in effect meaning that you're taking a loan from the bank.

Account types are often named according to their primary function, for example, many are checking or savings accounts. There are five broad types of accounts -- checking, savings, interest-bearing checking, money market deposit and certificate of deposit.

The same type of account may be very different from bank to bank. Each bank offers different incentives and services with their accounts, so it pays to shop around and ask a lot of questions before you make a final decision.

The process of opening a bank account is fairly straightforward, but there are some interesting and useful details that can make a big difference in the level of value and service you receive with your account. Keep reading to see how to find the best kind of account for your needs and learn more about fees and penalties that can have a big affect on your long-term savings.