Banking » Savings » How to Open Savings Accounts: Step By Step Guide

How to Open Savings Accounts: Step By Step Guide

If you’ve decided to open a savings account, there are several steps to take. From comparing accounts to gathering paperwork, here are they:

Article update: November 29, 2024

Article update:November 29, 2024

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Can I Open A Savings Account Online?

Most Americans have a savings account, but at least 77.02% of the savings accounts have less than $15,000. This is according to a report by Motley Fool, which shows 21.99% of savings accounts in the US have a balance of $1,000 to $5,000.

A savings account is typically a go-to choice if you want to put some money away for a financial goal, have some emergency funds on hand, or don’t want to tie up your money. While savings accounts are very common, many people still find the process of opening savings account a little overwhelming.

Fortunately, the internet age has made opening a savings account even easier. Not only are there online banks and financial institutions that offer savings accounts, but many of the major banks have now made it possible to open a savings account online.

So, here we’ll explore this process in more detail to help you feel comfortable about opening your new savings account.

What Do You Need to Open a Savings Account?

Whether opening a savings account in a branch or online, you’ll need to arrange the required documentation. There are some must-have supporting documents and a few that are optional, which can streamline the account opening process. These include:

Proof of Your ID: All banks and financial institutions are required to verify an applicant’s ID before they can open an account, even a savings account. Accepted forms of ID to prove your identity include a valid driver’s license, a current U.S. passport, or other state-issued photo ID.
Proof of Your Address: You will also need to provide proof of your address. This could be a utility bill or a recent bank statement.
Your Social Security Number: Your Social Security Number is part of the application form, so you won’t need to submit a copy of your card, but if you’re unsure about remembering your number, it is a good idea to have it handy.
Your Bank Credentials: If you’re opening a savings account to link to an existing bank account, for example to have maintenance fees waived or for overdraft protection, you may need to have your bank account credentials.

Steps to Open an Online Savings Account

If you’ve decided that you want to open your new savings account online, there are several steps you’ll need to go through.

1. Compare Savings Account Options

The first step has to be to compare the savings accounts on offer to see which ones best suit your needs. You’ll need to consider a number of factors, including:

The most obvious area of comparison is the rate offered on your balance.

The rate should not be the only factor you consider, but it will make a difference on how much you earn on your savings.

Bank/Institution	Savings APY
American Express	4.00%
Capital One	4.00%
Upgrade	4.41%
Marcus	4.10%
Discover Bank	4.00%
Lending Club	4.00%
Quontic	4.00%
UFB Direct	Up to 4.31%
Alliant Credit Union	3.06% – 3.10%
Ally Bank	4.00%
SoFi	up to 4.20%

Another thing that you need to consider is whether you can easily access your funds. If you are using the account for your emergency fund, you won’t want to have to wait to draw money to pay an unexpected bill.

Most savings accounts provide instant access, but you will be restricted to a maximum number of withdrawals per month.

You will also need to compare any fees or charges that may apply to your account. Some savings accounts have a monthly maintenance fee, which could quickly negate any interest you earn on your account.

If an account has a monthly maintenance fee, but is otherwise very attractive, be sure that you can easily meet any waiver criteria to minimize your costs.

Bank/institution	Monthly Fee	Bank Type
Bank of America Advantage Plus Checking	$12 can be waived by maintaining an account balance of $1,500, qualifying deposit of $250+ per month or enrol in Preferred Rewards	Traditional
Chase Total Checking®	$12 Can be waived if you maintain a $1,500 minimum daily balance, making direct deposits or Associated SnapDeposits of $500 or more per statement cycle, or holding $5,000 in combined deposit accounts with the same statement cycle date or having a Health Savings Account or investment account	Traditional
Citi Checking Account	$12 Can be waived if you make one qualifying direct deposit and one qualifying bill payment per statement period, maintain a combined balance of $1,500 per month across your eligible accounts or if you’re aged 62	Traditional
PNC Standard Checking	$7 – $25 per month can be waived if you maintain $500+/$2,000/$5,000 direct deposit per month, $500+/$2,000/$5,000 monthly balance in savings or age 62+/$10,000 in all PNC consumer deposit accounts/$25,000 in all PNC consumer deposit accounts/	Traditional
U.S. Bank Checking	$6.95 Can be waived by maintaining an average account balance of $1,500, have $1,000+ in direct deposits per month or be aged 65+	Traditional
Wells Fargo Everyday Checking	$10 Related to Wells Fargo Everyday Checking. The fee can be waived if you maintain a minimum daily balance of $500 or receive at least $500 in qualifying direct deposits per month. The fee is also waived if you’re 17 to 24 and have a linked Wells Fargo Campus Debit Card or Campus ATM card linked to the checking account	Traditional
Capital One 360 Checking	$0	Online Only
Amex Rewards Checking	$0	Online Only
SoFi Bank	$0	Online Only

Another factor that may be important to you is what deposit options are available for your new savings account. If your account is online only, you may be limited to depositing funds electronically via ACH or other transfers.

However, if you tend to deal in cash and want to pay cash into your savings account, you will need to choose an account that is accessible in the branch or allows cash deposits via ATM.

2. Gather Your Paperwork

We’ve already covered the supporting documents you’ll need for your application. Proof of Your ID and Address, SSN, and bank credentials (if you open your savings where you manage your checking) are required to start your application.

However, it is a good idea to have all your paperwork before starting the account application process. While many banks allow you to save your application part way through, it will delay the account opening.

So, it is best to have everything ready so you can go straight through the application and submit it without any delay.

3. Complete the Application Form

Once you’ve decided which savings account to open, you’ll need to visit the bank’s official website to find the product page. You can then read through the full product information to confirm that you are ready to open an account. You should see a link or a button to “apply.”

After you click the apply button, you’ll be directed to an application form. This is usually several pages, and you’ll need to provide information such as:

Your full name
Address
Email Address
Phone number
Your Social Security Number

Most fields will require that you complete them, and you may have options to save the application periodically, depending on the specific bank.

4. Provide Your Supporting Documents And Submit

The procedure for providing your supporting documents varies depending on the particular bank. Some banks have an upload page as part of the application form, but others will send you instructions on how to send your documents via email.

In either scenario, you should aim to send your documents as quickly as possible to avoid a delay in your account opening. Most banks allow you to submit a picture of your ID, but make sure the picture is clear and the details are legible before you send them.

5. Await Approval

After you submit your application and send or upload your supporting documents, you simply need to wait for an approval decision. Most banks decide whether your account can be opened within a day, but some financial institutions require a little more time.

Once you receive an email informing you that your application has been approved, you will have instructions for setting up online banking and detailing your new account number.

Optional: Set Up Online Banking/Banking Apps

This is an optional step, but it will make it easier to fund your new account.

It can also make it far more straightforward to manage your new account. For example, if you already hold an account with the bank, you can add your new savings account to your online banking dashboard.

It is also a good idea to link your savings account to your checking account if you want to use an overdraft protection feature, or linking your accounts will help you waive any maintenance fees on your checking account.

Should I Open a Savings Account?

Having one or more savings accounts can be a great way to organize your day-to-day finances. There are a number of scenarios where opening a savings account is a good idea. These include:

You want to earn interest on overflow cash: If you have cash in your checking account, but no bills due at the moment, a savings account can allow you to earn a little interest on your funds in the interim. You can even automate the process to transfer funds back into your checking account in time for your bills.
An Emergency Fund: An unexpected bill or expense has the potential to derail your financial plans, but if you have a savings account containing an emergency fund you can stay on track. Financial experts typically recommend having three to six months of your typical monthly expenses in the bank. However, there is no reason that you shouldn’t be earning interest on your emergency fund, while keeping it close at hand.
You’re Saving for a Major Purchase: Whether you’re saving up to buy a new car, planning home renovations or want to book a vacation, having a savings account makes it easy to keep your funds secure. You can set up an automatic transfer from your checking account after each paycheck, so you’ll stick to your savings goals.

Savings Calculator: Discover Your Savings Potential

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When Opening a Savings Account May Not Be a Good Idea

However, there are some circumstances where opening a savings account may not be the best idea for you. These include:

You Won’t Use the Account Enough to Cover the Fees: If your new savings account has a monthly maintenance fee that you won’t be able to cover with your typical activities each month, it is not a good idea to open the account.
You’re Looking for a Long-Term Investment: A savings account may not be the right option if you plan for retirement or another long-term goal. If you’re looking for a long-term investment that offers the best returns without immediate access, you may need to look at bonds, stocks, or CDs.
You’re Struggling to Manage Your Accounts: If you’ve already got several savings accounts and are struggling to keep track, opening another savings account is not likely the best option. While savings accounts don’t typically allow you to go overdrawn, there may be fees and charges resulting from poor account management. So, it is best to simplify your accounts to keep everything on track.

Can I Open a Savings Account With a Credit Union?

Credit unions often offer savings accounts and higher rates of return. The reason for this is that credit unions are owned by their members. So, rather than paying profits to shareholders, credit unions reinvest money into the credit union.

However, unlike banks, credit unions are not available to everyone. To join a credit union, you need to meet the membership criteria. This could be something as simple as living within a particular geographic area or working in a particular industry. But, some credit unions are more readily available if you support a particular organization.

The standard account for credit union members is a savings account. In fact, some credit unions will open you with a savings account as part of the membership application. It is worth checking what services the credit union offers; some have to check accounts, mortgages, personal loans, and more. So, you can move much or all of your banking requirements to the credit union.

Largest Traditional Banks	Largest Online Banks
Chase Bank	American Express
Wells Fargo	Marcus
Bank Of America	Capital One
Citi Bank	Synchrony Bank
PNC Bank	Discover Bank
U.S. Bank	Ally Bank

How to Open a Joint Savings Account?

Many banks and financial institutions allow co-ownership on savings accounts. The account opening process is similar to opening a sole account, and you may still be able to open the account online.

The key difference is that you will need to provide personal details and supporting documents for both parties. This means you will need to know the other person’s full name, email address, Social Security Number, and other personal details. You will also need access to the other person’s proof of ID and proof of address.

However, you don’t necessarily need to live at the same address as your co-account holder. You can open a joint savings account with practically anyone. Just be aware that both of you will have full access to the account. This means that you can both make deposits and withdrawals on the account.

Since you have opened the account as a joint account, the bank makes the assumption that any funds in the account belong to both of you. So, even if you’ve funded the account in full, the other person can withdraw all the funds without your permission.

This makes it crucial that you only open a joint savings account with someone that you trust completely

Is My Money Safe with an Online Savings Account?

Most banks are FDIC insured, which means that your money is safe in your online savings account. FDIC insurance covers up to $250,000 per depositor in each ownership category, per insurance bank. This means that if you have a balance in your savings account with bank A, it is not impacted by having a balance in savings account with bank B or having a checking account balance with any insured bank.

FDIC insurance provides coverage in the event that a bank fails. In this scenario, you could still have access to your account funds.

If your online savings account is with a credit union, you can still benefit from federal insurance, but it is provided by the NCUA (National Credit Union Administration.) However, the coverage limits are the same as FDIC coverage.

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