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How to Open A Savings Account: 4 Simple Steps

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updated: September 26, 2024
edited by Jennifer Cook

Savings accounts provide a secure place to keep your money. These interest-bearing accounts can help you grow your savings over time as you put money aside for short or long-term financial goals. Banks and credit unions offer savings accounts to meet varying customer needs. Typically, you can open a savings account online, although some financial institutions may require you to apply for an account in person.

Open a savings account in 4 simple steps

Opening a savings account is a straightforward process. Depending on the bank or financial institution, you may have the option to open an account online, in person, or over the phone. Here are the steps to open a savings account at most banks and credit unions.

1. Choose a savings account

Compare banks and savings accounts to find the best option for your needs. When choosing a savings account, consider factors like APY (annual percentage yield, or the total interest your savings will earn in a year), fees, and minimum opening deposit requirements.

2. Apply for an account

Check with the bank to determine which methods are available for opening a savings account. Visit the bank or credit union's website if you're applying online. Some banks allow you to apply over the phone, while others require that you do so in person at a local branch. In some cases, you may need to schedule an appointment with a bank representative, but some banks welcome walk-in applicants.

3. Verify your identity

Banks and other financial institutions require you to provide proper documentation and personal information for identification, such as a passport or driverโ€™s license with a photo. You can save time by gathering the required information before applying for an account.

4. Fund your account

If you're approved for a savings account, your bank may require you to fund your account immediately. Check with your bank for any opening deposit requirements. Typically, you can fund your account by linking another bank account and transferring funds, but the bank may offer other options.

How to open a savings account online

Many financial institutions now allow individuals to open accounts online. Applying online can save time, often only taking a few minutes to complete an application. If the bank has a mobile banking app, you may be able to apply for an account directly through the app.

Applying for a savings account online isn't much different than doing so in person at a branch. You still need to provide any required personal information. If approved for a savings account, you usually have the option to immediately create an online account with the bank, link other bank accounts, and start using your account.

While many banks and credit unions offer online banking, online banks are known for competitive high-yield savings rates and modern banking features. Bread Savings, for example, has a high-yield online savings account that currently earns 5.10% APY, which is far greater than the national average and what you might find at local banks. Discover's online savings account earns 4.10% APY with no minimum opening deposit and no monthly fees.

Requirements to open a savings account

During the account application process, banks and credit unions ask you to provide specific personal information. The information is required to verify your identity and to comply with federal regulations. The information requested may vary depending on the financial institution. The following information is generally required to open a savings or other bank account.

  • Government-issued photo identification, such as a driver's license, state ID, or passport
  • Social Security number or individual taxpayer identification number (ITIN)
  • Date of birth
  • Home mailing address
  • Phone number
  • Email address
  • Employment information, such as employment status and income

If you're opening a joint savings account, both applicants must provide the required information. If it's a custodial savings account for a minor, a parent or guardian must provide their personal information. For example, the Kids Savings Account at Capital One offers high-yield savings with no monthly service fees. To open the account, a parent or guardian must provide the information above, as well as citizenship information, along with their child's name, date of birth, Social Security number, and address.

If you decide to open an account at a credit union, you may be required to meet additional requirements. Credit unions typically require membership to open an account. Membership requirements may be as simple as opening a savings account with a small deposit. Often, credit union membership is limited to individuals who live, work, attend school, or worship in a particular city or region or through an affiliation, such as a specific employer or association.

How to choose the best savings account

Not all savings accounts are created equal. The interest rate, fees, and features can vary considerably depending on where you bank. Here are some factors to consider when comparing savings accounts.

Interest rates

Look for the highest APY to maximize your earnings. Typically, the best rates are found at online banks and credit unions.

Fees

Banks may charge a monthly maintenance fee on their savings accounts. In some cases, the fee is waived if you meet minimum balance requirements or other criteria each month.

Accessibility

Determine your preferred way to bank, whether it's online or in person. Also, consider whether you need access to ATMs and, if so, check the bankโ€™s network of ATMs.

Deposit requirements

Check if the bank requires a minimum initial deposit and ongoing balance requirements in order to avoid fees.

Withdrawal limits

Your bank may limit the number of free withdrawals per month or charge a fee for excessive transactions. Itโ€™s best to know the rules before you open an account.

FDIC or NCUA Insurance

If the account is through a bank, ensure it is FDIC insured to protect your savings. If your account is with a credit union, check that it is federally insured by the National Credit Union Administration (NCUA), which is equivalent to the FDIC.

Account features

Look for account benefits like mobile banking and automatic savings tools.

Customer service

Choose a financial institution that offers support through your preferred channels of communication.

Reputation

Read customer reviews to gauge the bank's overall reputation and responses to customersโ€™ issues.

Promotions

Some banks offer sign-up bonuses or special offers for opening a new account. Generally, you must meet offer requirements, like setting up direct deposit of your paycheck or maintaining a certain balance, to earn the bonus.

Banking needs

When choosing a savings account, consider all of your banking needs. If you're looking for a checking account, too, consider banks or credit unions that offer both. Another option is a combination account, like a SoFi Checking and Savings Account, which offers high-yield interest along with everyday functionality.

Time Stamp: It pays to shop around to find the right savings account

Savings accounts are an important piece of a comprehensive money management plan. Determine your savings goals and banking needs and compare several banks to find the best fit. Read up on account requirements, fees, and other pertinent details before you make your decision. When you're ready, navigate to the bank's website or to your local branch to apply for a savings account.

Frequently asked questions (FAQs)

Should I open a savings account?

A savings account can help you earn interest and save towards short-term goals while keeping your funds safe. Savings accounts, because they are liquid and allow access to your cash, are a great option for emergency funds and other savings goals like a travel fund, college savings, and future home improvement projects.

Why would I be denied a savings account?

Banks and other financial institutions may deny your application for a savings account based on your banking history. Reasons may include an unpaid negative balance due to overdrafts or fees, bank fraud, or a joint bank account with someone else with poor banking history.

What bank should I open a savings account with?

The best bank or credit union for a savings account depends on your needs. Determine your non-negotiables and goals to help you find the best savings account for you, such as one with no monthly fees and no minimum deposit requirements.

Can you open a savings account by yourself?

Yes, generally, you can open a savings account by yourself, either online, in person, or by phone, depending on your bank or credit union. Joint and custodial savings accounts require all parties to apply together.

The information presented here is created by TIME Stamped and overseen by TIME editorial staff. To learn more, see our About Us page.

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