How to open a savings account

A step-by-step guide to starting your own savings

It’s never too early OR too late to open savings account and start saving money.

That’s an easy statement to make, but not necessarily an easy path to follow. Money comes in and money goes out. We have bills and rent to pay, so it sometimes seems like our checking accounts are just temporary benches that your money can rest on before heading down the next path. But it doesn’t have to be that way. 

With a little smart money management, you can set aside a portion of your paychecks (or maybe some of the money you get from your side hustle or that $5 your grandmother still sends you every birthday). If you do want to start saving money (and we do recommend it!) one good place to start is with a savings account. Here’s a step-by-step guide to how to start one:

1. Compare savings accounts

When it comes to savings accounts, you have lots of different banking services to choose from. From traditional banks, to credit unions, to innovative startups, there are a lot of different choices out there. Think about what kind of bank you want to use. 

• Do you feel that you want the security of a massive bank, like Bank of America? 

• Or a local bank, where the people at the branch know your name?  

• Or would you rather go with an online banking service like Chime or Ally? 

There are pros and cons for each type so you’ll want to weigh all your options. Bigger banks have stability and nationwide reach, while newer players in the space offer innovation. Check out our reviews of the best overall savings accounts and best savings accounts for recent college graduates.

2. Choose the options that are best for you

Even after you’ve selected your provider, you’ve still got some choices to make. There are lots of different features and options available.

You’ll want to consider some (or all) of the following:

• Ease of withdrawal: Even though you don’t want to get in the habit of dipping into your savings account all that often, there may be times when you’ll need to access that cash. Find out if there are lots of ATMs available in your area so you can easily get money, and look into how easy it is to transfer money from your savings to checking when you need it.
• Mobile banking: You’ll want to find an account that is easy to use, so you’ll want to take a look at the mobile banking app that your bank offers. Take a look at its reviews in your app store and see what features it has. You’ll want an app that’s easy to use, one that allows you to easily check your balance, set up alerts, deposit checks into your account, and transfer money whenever you want.
• Minimum initial deposit:  Some banks require a minimum deposit of $100 or so, but a growing number don’t — especially if you have another account with them.   So you’ll want to weigh that option when you’re choosing the right account for you.
• Minimum balance: Similar to the initial deposit, some savings accounts will require a minimum amount of money that you must keep in the account in order to avoid a penalty. If your account balance drops below this threshold, you’ll end up paying a fee, which can recur if you don’t get the balance up over the minimum.  Look for a savings account that doesn’t require a minimum balance. 
• Number of transactions per month: One common characteristic of savings accounts is that they allow for a limited number of withdrawals (and sometimes deposits) per month. If you anticipate needing to dip into your savings account often, you’ll want to take a close look at this. If you think you’ll be able to keep your hands off your account, more often than not, this won’t be as much of a concern.
• APY (interest):  If you plan on building a sizable balance over time, APY or the interest rate paid, may be an important factor.  If you are just starting out and/or your balance is under a thousand dollars, then the APY if less significant than you think. 

For example, if you open a savings account with an initial deposit of $100 and deposit an additional $20 per month for three years, you’ll save $814.00.

Only about $14 of that is interest at today’s 1.00% APY. That’s $14 earned over three years! If your bank charges you $5 per month ($60/year) for the pleasure of having the account, it’s better to go with a no-fee savings account.  

There may be other factors that are important to you, so you should take a close look at each account that piques your interest and weigh all the options before you make your final decision.

3. Get your info together

Once you’ve made your choices about which savings account is best for you, the next step is to gather all of the documents that you need to open the account. For example, you’ll likely need to know your:

• Social Security Number (you probably don’t need the card, just the number, which you might already have memorized). 

• A government-issued ID, such as a driver’s license or a passport (again, you may just need the information from this ID, especially if you’re applying for the account online).

• Other information, including your date of birth, email address, and physical address. 

This is the typical information that most accounts require, but you’ll want to check on the account that interests you to see if you need anything else.

Either way, you’ll want to make sure you have all your information together when you get ready to apply (whether online or in-person) so you’re prepared and ready to go. 

4. Get a savings deposit ready

In order to open your account, you’re going to need some money, cash, moolah — you know what we mean. In your research, you should have found out the minimum amount you needed to deposit in order to open the account.

Perhaps that played a role in deciding which account to open in the first place. Either way, you’re going to need to get the money that you’ll need to open it. 

• If you’re opening an online account, then you’ll need to be able to transfer the funds electronically. If you already have a checking account, this should be fairly easy. If not, research the banking institution to see if they’ll allow you to deposit your money using an app, such as PayPal or Venmo.

• If you’re opening an account in person, you can bring cash, a personal check, or a cashier’s check with you when you open the account. If you already have a checking account at the bank in question, you may be able to transfer the funds directly from that account to your new savings account. You should talk to the bank representative you’re working with to see if this is possible. 

Remember, you can always deposit more than the minimum amount. Figure out how much you can afford, balancing how much you want to put in your new savings account with how much money you need to have available for bills and purchases.

This also gets you thinking about regular deposits. Take a look at your finances and see how much money you think you should deposit every month (or every time you get paid, whichever works best for you).

5. Keep track of your savings

Now that you’ve opened your savings account, you may want to sit back, relax, and watch your money grow. That’s tempting, but it’s not exactly the best course of action. 

The easiest way to keep track of your funds is to use your bank’s app. Download it right away and link it to your account.

Check your balance whenever you’d like and use the app when you need to transfer money to or from your savings account. Your bank may have a website you can access, too, but the app should have the functionality you need. Many banking apps can help you with other things, too, like finding an ATM or sending a message to customer service.

If you need to dip into your savings from time to time. Remember that your account may limit the number of withdrawals you can make per month, and you’ll want to keep track of that minimum balance.  

Savings Accounts Compared

Here are three great savings accounts for consideration. Read our 5 Best saving accounts for more options. 

Bank or bank product		Link
	✓No monthly fees ✓No minimum balance required ✓Set up recurring transfers easily ✓Robust app with set up boosters and recommendations ✓1.00% APY	Learn more
	✓No monthly fees ✓No minimum deposit to open ✓Minimum balance of 1 cent! ✓App offers real-time alerts for all transactions ✓Automatic savings feature ✓1.00% APY	Learn more
	✓No monthly fees ✓No minimum to open ✓No insufficient funds fee ✓Manage account and set up notifications from the mobile app ✓1.01% APY	Learn more

Add to your savings with automatic deposits 

Saving up is hard. There’s always another bill to pay, new shoes to buy, and a night out with your friends competing for your hard-earned cash.

You’re not alone. According to CNBC, 57% of Americans have less than $1,000 in their savings, which is rarely enough for emergencies, such as car repairs or unexpected medical bills.

One good way to build up funds in your savings account is by using automatic deposits.

Try an auto-deposit of even $5 a paycheck. It adds up.  

• You can typically set this up directly with your employer. Ask payroll for the auto deposit form and they’ll make sure your specified amount from each paycheck goes into your savings account. 

• Another option is to set up an auto deposit between your checking and savings account. We like newer banks like Chime and Simple that don’t have minimum balance requirements, give you free overdraft protection, automatic savings features, and 2-day early pay with direct deposits. 

Start your savings account today!

Congratulations on deciding to open a savings account! It’s a big — and important — step! Your savings account can set you up for future economic success (like buying a house) or help you deal with unexpected situations, like unplanned medical bills.

Either way, the first step toward building your savings is to open your first savings account. A savings account is the safest place to save money. Research banks and accounts, get your information and deposit together and open that account!

You’ll find the right savings account for you and be confident that you’re putting your money in a safe place where it’ll work for you and be there when you need it in the future!