how to open a savings account - bantng.com
If saving money is one of your primary financial goals, opening a savings account is an important first step in keeping your money safe.
You need to know the requirements to open a savings account – and you’ll find them in this step-by-step guide.
But the guide also contains the most important information about your decision to open a savings account. Here’s what you can learn:
- Where can I find the best savings rate to get the most out of my money?
- How to choose between a bank account and a savings account
- What is a savings account and why is it important to have one?
What is a savings account
A savings account is a type of savings account where you can deposit money for later use. The main purpose of a savings account is to keep your funds safe, liquid, and stable in value.
This differs from a checking account, where you can deposit funds to buy or pay bills. With a checking account, you can take debit cards and paper checks. However, savings accounts generally have no function. (However, some banks may offer free ATM cards that you can use to access your savings.)
Savings accounts are particularly useful for short-term needs. For example, you can open a savings account:
- Prevent overdraft fees to a linked checking account from being charged
- Emergency fund purpose
- Save your money until needed
After making your first deposit and opening an account, you can continue adding money and earning interest over time for as long as you need the funds or wish to use them. You can find everything else with different storage agents, such as:
- save money for vacation
- save for the car
- Cash fundraising for wedding expenses
- apartment building down payment
However, the best savings account is one that covers all of your personal pockets in terms of interest rates, fees, availability and features.
Can I open a savings account online?
Most banks and credit unions allow their customers to do online banking, including opening a new account online
Some banks only operate online and do not have a physical location. This means you can open a savings account without leaving home.
Many online banks offer the best deals on savings accounts with low minimum balances and high interest rates with low or no maintenance fees. Some major online banks, such as Allly Bank and Exos Bank, offer competitive rates and no maintenance fees.
If you are a tech entrepreneur and do not like to do your banking over the phone or computer, online savings accounts are a great option. If you prefer personal banking, you may be better off with a traditional bank.
Steps on how to open a savings account
Opening a savings account is not difficult. Most financial institutions make it easy to make your first deposit and start saving.
In addition, everyone has access to savings accounts. As a credit union in the United States, nearly every bank offers savings accounts as part of their products and services.
The problem is that most of them are bad savings accounts. In fact, it’s even harder to find a bank that offers a long-term savings account – if you don’t know where to look.
1. Prioritize: What do you need from a savings account?
Before opening a savings account, consider what is important to you and what to expect from your bank or credit union in terms of their products and services.
When creating a checklist for your ideal savings account, consider the following:
Safety and security
Is your deposit insured by the FDIC or NCUA?
high yield
What interest rates do you expect?
Confidently
What are the features of online banking and mobile banking? (Interpersonal payments, mobile check deposits)
Accessibility
Sending and withdrawing money to your account is easy (branches, ATMs, ATMs)
Minimum Requirements
How much can I pay the first deposit?
Cost
Is the reward system prohibited?
2. Do a survey: Compare the options of banks and savings accounts.
This can be the most important step in opening a savings account. The key to choosing the right account for you is to take the time to research what individual banks and credit unions offer to depositors.
The two most important factors need to be taken into account when comparing banks:
- Safety and security
- High yield
Most financial institutions in the United States have FDIC and NCUA insurance. Deposit insurance covers up to $ 250,000 in savings accounts by the depositor, financial institution, and account type. Banks need to display this image on their website and window counters (in the case of stones). Find it for a quick confirmation of FDIC insurance:
On the other hand, if you don’t know where to look, finding the best high-yielding savings account is a bit tricky. However, a four-yearly Money Rates survey limits the range of banks that offer savings accounts to the top ten.
Interest rates are subject to change at any time, but banks, which have been in the US best rate survey for decades, consistently offer the highest savings account rates throughout the quarter. And many of these banks are in the top 10 quarterly and yearly.
Using rate stability to compare banks is one way to determine who has the most savings in your account, but there are other important factors to consider. For example, you should look at:
- All your monthly bank fees and what you can do to avoid them
- Minimum balance requirements and minimum balance offset requirements (if applicable)
- Monthly withdrawal limit and overpayment option
- Additional fees, such as paper statement fees or early closing fees
- Does your bank offer personal financing tools, such as free savings calculators or budgeting tools?
- Contact customer service and maybe the bank?
- Online and Mobile Banking Features and Benefits
You may also want to consider whether your bank offers other products and services that you may need, such as checking accounts, proof of deposit, personal loans, or credit cards. It may be easier to do all of your banking in one place rather than spreading your money across multiple financial institutions.
It is also useful to take into account the general reputation of the bank and how customers and the banking sector view the bank. The goal is to find a money-saving place that you can trust and that offers a good mix of high-interest rates and low fees.
3. Gather the required documents and information
Bank and credit union requirements for opening a savings account usually follow the same guidelines. In general, you should be able to prove your identity, meet the minimum age requirements, and provide a source of investment for your first deposit.
As you prepare to open savings accounts, it helps you aggregate your important information and documents, including:
- Bank account and routing number to open an account
- A government-issued Identity card
- Your email, phone number and address
- Social security number(SSN)
- Birth Date
Again, if you plan to open a consolidated savings account, you will need to provide this information to each account holder.
Also keep in mind that you need to have a certain amount of money available to open a savings account. While some banks set the minimum initial deposit at $1 or $0, other banks may charge a fee of $500, $1,000 or more to open a savings account.
4. Enter the application and make your first deposit
The inauguration of the savings account is easier than ever, because many banks allow you to do it individually instead of going to the branch.
When you are ready to open the online savings account, you must enter a request and follow the bank’s instructions on the way to complete it. Completing the application means that you offer your personal and financial information to the bank so that you can make your first deposit.
Take a moment to check the general terms and conditions on your account before applying your request. This is an opportunity to know that you agree on fees, interest rates, minimum balances, etc.
Depending on the bank, it may take several business days for your application to be processed and approved. If you already have an account, you may see a small test deposit or two when linking to a foreign bank account. However, you can then start setting up automatic transfers as direct deposits to add regular savings.
FAQs
What is the minimum account balance
What are the savings account fees
What is a savings account APY (Annual Percentage Yield)
Savings account alternative
Types of savings account
What to consider before opening a savings account
If you want to create emergency funds that you can access in the short term, it makes sense to open a bank account with your account.
If you deliberately save and don’t have quick access to your money, it makes sense to shop at the best rate or choose an online bank. You will get better interest rates to accelerate your progress towards your goals.
