Joseph Mugo

Important Details that People Overlook When Opening a Bank Account in Kenya Perhaps you are now considering to open a new bank account for one reason or another. You may have decided to switch banks or maybe you are about to open your first bank account. Whatever the reason, at some point in your life you will need one. In Kenya, it has become relatively easy to open an account, with banks such as Equity, KCB, Cooperative Bank, and Barclays Bank, just to name a few, that have digitized the account opening process. This simplicity, however, comes at a cost, there are several important details that people often overlook while opening an account. A bank account is not just a one fits all type of thing, it is recommended that you chose one which is tailored for your needs. Here are some details to consider when opening a new bank account: Choosing the Right Account There are several types of bank accounts in Kenya, depending on your needs. The most common is the Current Account which is suitable for people who make regular withdrawals such as students and regular income earners. If you need to access your money to meet certain needs regularly, this is for you. Due to the day to day withdrawal allowance on this account, it means that no interest is paid to depositors. This account may have hidden charges as well. You should inquire from your bank to find out all the charges before opening this account. For people who want to save funds with the intention of using the money in the near future, it is recommended that they open a Savings Account. Your money will earn interest but the number of withdrawals is limited to less than 5 in a month. The third option is a Fixed Deposit Account, that earns you significantly higher interest. You should compare interest rates for different banks while choosing this option, depending on the fixed contracted periods. You have now decided what kind of account you want to open, having also gauged the best interest rates for respective accounts, but still, there are other factors to consider. Minimum Balance This is the amount that must be in the account at any one time. Did you know that you could be charged if you don’t keep a certain amount of money in your account? Some banks may charge you, and your account may eventually be closed if it is not funded. Always make sure you ask about the minimum balance in your bank account and the charges that you may incur in case you go below that balance. Over drafting Mistakes do occur. An overdraft is a situation where you withdraw money from your account and the available balance goes to below zero. You need to know what will happen in case of an overdraft. What are the fees in case of an overdraft? You also need to ask about any overdraft protection. However, there are additional fees for using overdraft protection, and as such, the best option is to weigh your overdraft options and pick the best strategy to deal with possible mistakes. ATM fees Withdrawing your money from your bank’s ATM should be free. But sometimes you may travel, or find yourself in a region where your bank doesn’t have an ATM nearby. You would need to use an out of network ATM which is sometimes charged depending on the bank. So before opening that bank account, make sure you know whether they will charge you and how much they’ll charge. It is best to choose a bank that has a large network of withdrawal points, be it Kenyan bank agent outlets or ATMs. Online Banking With the advent of e-commerce, you may need to purchase an item online once in a while. You may also need to access your account straight from your phone. Does the bank you intend to open an account with have a mobile app? Is the app compatible with your phone? Freelancers should consider this option, given that they do most of their business online. A good bank account should be able to carry out global transactions seamlessly and securely. Conclusion With the above details in mind, you should now be able to decide which is the best account for you. But the main deal here is that you should always read the terms and conditions of a particular account. You need to understand all the charges and limits before you create the account. Also, never forget that if things don’t work for you, you can always change your account, which is your right as a customer.