Making your money work for you is a skill that comes with opening a savings account. Typically, money in savings accounts accrues interest.; It can reach 5%, which is greater than the nation’s average savings rate of 0.47%. All set to begin? The following is a list of things to do and guidance on making the best decision.
1. Select the application method
You may apply by mail, over the phone, in person, or even online, depending on the institution. Applying online may require ten to twenty minutes of work.
2. Analyze your choices
- Minimal balance requirement that is low or nonexistent
- The availability of ATMs without fees
- Accessible banking services on mobile devices and the internet
- An attractive yearly percentage yield (APY)
- A small, nonexistent monthly charge, or one that is simple to avoid
- Branches’ accessibility
- Insurance coverage provided by the National Credit Union Administration (NCUA) or the Federal Deposit Insurance Corp. (FDIC)
If you already have a checking account at a bank, it’s usually convenient to open a savings account there as well. To ensure that your bank is providing savings account features that are important to you, like competitive rates, it is still worthwhile to compare other options.
3. Select an individual or joint account
If you want a savings account that is all your own, open an individual account. An account that you own jointly with someone else—like your spouse or child—is known as a joint account.
There are several advantages to joint accounts.
- They facilitate the access to shared funds for your child or spouse.
- Since each joint owner has $250,000 in deposit insurance under the joint account ownership category, having a joint owner can result in a higher level of FDIC insurance—up to $500,000 instead of $250,000.
4. Assemble the necessary paperwork
Any bank account you open will require you to submit certain documentation and personal information. When opening the account in person or online, make sure you have the following information available, along with any joint account owners.
- Social Security number
- Date of birth
- Official identification from the government, like a passport or driver’s license
- Address (or, if your ID mentions a prior address, a proof of address)
- Contact information
- Details about your bank account, if any, to finance your new account
If you have a credit freeze in place, you might need to remove it before opening a new bank account.
5. Please accept the terms and conditions
At this point, the bank will ask you to attest that you have read the disclosure documents outlining the costs, obligations, and interest calculation on your account. Ideally, the account you have chosen has low or no monthly service fees along with high interest rates. This is your opportunity to confirm.
6. Put money into your account
A savings account opening may need a one-time deposit. An account usually requires a minimum opening deposit, which can be anywhere from $25 to $100. If you are opening the account in person, you can typically fund it with cash or a check. You can frequently transfer money from a linked account or make a mobile check deposit to deposit money electronically.
When you open an account, make sure you deposit enough to cover the required minimum opening deposit and keep enough money in your account to avoid paying maintenance fees.
Certain savings accounts have a monthly maintenance fee that can deplete your funds in addition to the initial deposit. In order to avoid this charge, certain banks demand that the account holder maintain a minimum balance of several hundred dollars.
7. Send in your application
After completing your application and providing all necessary information, wait for the bank to open your account. You can begin making additional deposits in a business day or two, as this usually happens quickly.
8. Create an online banking account
Online banking is available from almost all banks and credit unions, and it can be a convenient way to manage your account, check your balance, and send money. To access your account while on the go, download the bank’s mobile app and open an online banking account.
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