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Key Points

Opening a savings account is an effortless process that can you can do in less than a day. In fact, you can open a savings account online in less than 30 minutes.

Banks and credit unions all around the U.S. offer savings accounts as a way to store your money safely. Savings accounts also have the benefit of paying you interest on your savings, which means your account can grow slowly over time.

Opening a savings account is a critical step in progressing your financial future. In this step-by-step guide, you’ll learn how to open a savings account. We’ll also answer other important questions around the topic. Let’s get started.

How to open a savings account step-by-step

Both banks and credit unions have very similar processes when it comes to opening a savings account. Here are the five steps you’ll typically have to take.

1. Decide on a bank or credit union

There’s an endless list of banks and credit unions offering savings accounts, but which one will benefit you most? When choosing a bank or credit union, you should consider these factors:

  • Interest rates: You want to open an account that will earn you the most interest. Most traditional savings accounts will only earn you an average of 0.05% APY. Many banks will pay as low as 0.01% APY, which is $1 per year on a $1,000 balance. On the other hand, it’s not unusual for high-yield savings accounts to earn 1% to 2% APY.
  • Balance requirements: Some banks will require you to maintain a specified balance. For example, a bank may have a $100 minimum balance requirement. This means you must have at least $100 in your account at all times. Failing to meet the balance requirements usually results in (avoidable) fees and penalties. It’s always best to find a bank that does not have any balance requirements.
  • Fees and penalties: Almost all banks charge fees. However, some banks take the liberty of charging more fees. For example, a bank may charge a monthly maintenance fee on your savings account, regardless of your balance. These are unnecessary fees that eat into your interest and should be avoided.
  • Location: If you prefer visiting your bank’s local branch, all of the above factors won’t matter. For example, to find the best interest rates, you’ll likely have to look at an online-only bank (one without a physical location). So if your primary objective is having physical access to your bank, it may be best to open a savings account with the same bank you have a checking account.

2. Gather the required documents

When opening a savings account, you’ll need to provide the bank with information about yourself and potentially some documents.

All financial institutions are different, and some will require documents that others may not. In general, here are some of the main things you’ll need:

  • ID, such as driver’s license
  • Social security number
  • Date of birth
  • Contact information, such as email and phone number
  • Address, and sometimes proof of address (if your ID lists an old address)
  • Bank account number and routing number to fund your new account (if applicable)

Gathering this information won’t take long. Most of this information you’ll either know by memory or have readily accessible.

3. Decide on an individual or joint account

You have the option to open either an individual account or a joint account. If you are opening an account with a spouse or child, you’ll want to open a joint account. If the account is only for you, then you’ll open an individual account.

If you are opening a joint account, you’ll need to get the information from the previous step for the other account holder.

Keep in mind that joint accounts benefit from being insured by the FDIC (or NCUA at credit unions) up to $500,000. This is double the usual $250,000 insured in an individual account.

4. Fund your savings account

Now that your account is open, it’s time to fund it. In step 2, you collected the bank account number and routing number from your primary bank. You’ll use this information to transfer funds from your primary bank to your savings account, assuming it’s an external account.

Some banks have minimum deposit requirements that range from $25 up to $100. You’ll need to deposit at least the minimum amount to open an account at these banks. However, many banks do not have these requirements. Therefore, you can technically open an account with no money.

We recommend that you do start making deposits into your savings account as soon as possible. This is especially true if your money is sitting in your checking account, collecting zero interest.

5. Submit your application

The easiest part of this process is submitting your application. Once submitted, you can expect to hear a response quickly. Most banks and credit unions will take a day or two to process your application and funds before you can start using the account.

Can I open a savings account online?

Yes, you can open a savings account online at most banks and credit unions. In fact, some banks operate only online and do not have any physical locations.

Online-only banks typically offer better interest rates on savings accounts than traditional banks. That’s because online banks have significantly smaller overhead costs. They don’t have to pay for physical buildings, bank tellers, and managers like traditional banks do.

Instead, online-only banks can pass these savings to you in the form the better interest on savings and more competitive rates on loans. Examples of online-only banks include Axos Bank, Ally, and Synchrony.

How to choose the best savings account

There are two primary things you want to look at when shopping around for a savings account:

  • Interest rate
  • Fees

Ideally, the best savings account will earn the highest interest rate and charge the least fees. For this combination, you’ll want to look at high-yield savings accounts. Most high-yield savings accounts earn significantly more in interest than traditional savings accounts.

Additionally, you can look at opening a money market account. MMAs offer the same benefits as savings accounts, earn higher interest, and have checking account features, such as a debit card and checks.

When it comes to fees, the best advice is to try and avoid them. Some banks will charge a monthly maintenance fee on your savings account, which will wipe out any money you earn from interest.

Some banks will charge inactivity fees if you don’t make any deposits for an extended period. You’ll want to shop around to find a bank that gives you the best of both worlds—high interest on savings with low (or no) fees.

Can your money grow in a savings account?

Traditional savings account typically have an average annual percentage yield of 0.01% to 0.06%. Although this isn’t impressive, it’s certainly better than your money sitting in a zero-interest checking account, or even worse, under your mattress.

That being said, with interest rates that low, it’s unlikely you’ll earn enough even to beat inflation, which averages about 2% every year.

However, there is one way your money can grow in a savings account, and that’s if you consider the high-yield savings account. These accounts can earn over 20x more than the national average, which lingers around 0.05%.

It’s not uncommon for high-yield savings accounts to have interest rates of around 1%. You can even find yields of 2% or more on high-yield savings accounts during certain economic cycles.

Let’s look at an example of how your money can grow in a high-yield savings account versus a traditional savings account.

If you put $1,000 into a 1% APY high-yield savings account, your savings would grow about $10 every year, not including compounding interest. If you took that same $1,000 and placed it in a 0.05% APY traditional savings account, you would only earn $0.50.

Are savings accounts worth it?

The answer to this question depends on your financial goals. For example, if you want to build an emergency fund, then a savings account is the perfect place for it. We recommend saving your emergency fund in a high-yield savings account where your money is accessible but still earning the most interest.

On the other hand, maybe you are wanting to maximize the earning potential on your savings. In this case, you might want to consider investing your money in stocks, bonds, or ETFs.

So, are savings accounts worth it? The answer to the question is yes and no. If you need quick access to your savings, then a savings account is worth it. If you don’t need immediate access to your savings and prefer to get larger returns, then a savings account is not worth it.


We went over the exact steps it takes to open a savings account and answered a few common but important questions about them.

By this point, you should be able to open your own savings account and start saving your money for your financial goals. You’ll want to consider all of your options when choosing a savings account.

For example, do you care if your account is accessible only online, or would you prefer to visit a physical branch? Do you care about the interest rate on your savings account, or are you only concerned about meeting your savings goal?

These are essential questions you should ask yourself when opening a savings account. Taking the time to research and make an informed decision will only benefit you more in the long run.

About the author

Joshua Mayo is the founder of The Investor Post, runs a self-branded YouTube channel, and is an avid investor and entrepreneur.