A checking account or a current account, as it is also known, is a type of a deposit account into which deposits and withdrawals can be made. A few of the biggest advantages of current accounts that make them popular include provision of cheque book facility for making payments and allowing unlimited / high number of deposits and withdrawals into the account, much higher, for instance, than most savings accounts. Here, we will try and provide a few tips on going about opening a new checking / current account:
1. Understand why you require a current account
Determine why you need a checking account. Are you an individual or a business that needs to make regular payments by cheque? Do you need to make a high number of deposits or withdrawals regularly, more than is allowed by a standard savings account? Remember that checking accounts are not provided free of charge. They have fees, charges and deposit requirements associated with them.
For instance, banks will charge a processing fee of RM0.50 on the issuer of a cheque in addition to stamp duty of RM0.15 per cheque leaf. You may also need to make a particular initial deposit or maintain a certain minimum deposit. This amount will be locked up without earning any interest. Check whether you are getting benefits commensurate with the fees and charges you are paying and the interest you are foregoing.
2. Shop around
Almost all major banks offer a variety of checking accounts, both conventional and Islamic. Learn the terms and conditions associated with such accounts and select the account that syncs best with your requirements at the lowest rate. Some of the main features that you need to look out for could include:
Interest offered, initial and minimum deposit requirements, fees and charges(annual charges, debit card charges, transfer charges etc) including penalties if the minimum deposit requirements are not met, automatic issual of cheque books when the current supply runs low, provision of overdraft facility, availability of PIDM protection, phone banking, Internet banking, an international ATM card, the ATM and branch network of the bank, monthly statements, charges involved in the operation of the account, additional facilities like a “sweep” facility which sweeps in cash from a linked savings account to cover for any cheque payments etc are all important features to look for before deciding upon a Current Account.
3. Physical presence at the bank
You need to be physically present at the bank to open a checking account. You may also need an introducer, either an existing customer or someone known to the bank.
4. Keep required documents ready
Keep required identification documents like your MyKad or driving licence that substantiate your identity ready. If it is a joint account, all account holders will need to provide identification documents.
If you are a business / society / club / association / professional registered with a professional body (like the Malaysian Medical Association) you would also need to provide the business registration, board resolution, memorandum and articles of association, share allotment form and list of directors and secretary (for a company account) or list of current board/committee members (for society account).
5. Make initial deposit payments
Check beforehand whether you need to make an initial deposit payment and in what form (cash, cheque etc) and keep the required amount ready at hand.