How to open a savings account

It's always important to save. We can't say that enough! However, how do you get started? Here's our guide to get started on opening a savings account and all you need to know to maintain it.

You can apply for a savings account either by mail, online, or through a call. For opening a savings account documents like ID, social security number, passport or driving license, etc. are a must. You can expect an average interest rate of 0.50% on a savings account.

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Saving is essential to sustain the lifestyle in the long run. It is a safety net you can fall on. Depositing your money in a savings account means growing your money without putting in any extra effort. And if you haven’t started yet, here’s how you can open a savings account.

The interest that is given in the average savings accounts ranges up to 0.50%. Note that the average interest rate stands at 0.06%. So if you want to grow your money and want to know how you can open a savings account, let’s get started.

Select mode of application 

You can apply for a savings account either by mail, online, or through a call. To apply online, you might have to spend up to 20 minutes on the application.

Get your identification ready

For opening an account, you will need documents like ID, social security number, passport or driving license, etc.

Personal contact information

These include providing the bank with information like first name and last name, date of birth, contact number, your address, the city or state, etc. 

Select the type of account

You have to choose between a joint or single account depending upon your choice. If you choose the former then you will need the information for the other person too.

Read the T&C

Terms and conditions are important to double-check if you choose the right option. The bank may also ask you to check disclosure documents, liabilities, and other formalities that are needed to open the account. 

Deposit the initial amount

Many savings accounts need you to deposit a minimum fee to open a new account. The minimum amount of deposit here is $25-$100 or many banks also have no provision for such deposits. It is advised to deposit your money nevertheless if you want to earn interest early and get the benefits of a savings account.

You can also transfer the money from your existing account by providing the routing and account number. If you are doing this offline, you can give a check to the teller or arrange a wire transfer or mail.

Submit your application

After the submission of the application, the verification takes as little as 4-5 minutes. However, the actual operation of the account may take about 4-5 days to start. Once it opens, you can make regular deposits or set up automatic transfers and earn the interest.

What are the features of a good savings account?

The main features include a high rate of interest while charging less or no fee. The average interest is around 0.06% but many high-yield savings accounts provide up to a 0.50% rate too. For example, if you deposit $20,000 in the account, you would earn $100 as opposed to the $12 that you will earn at the average rate.

It is recommended to open a savings account in the online bank as they don’t have to maintain any branches and thus provide more interest as compared to brick-and-mortar banks that have myriads of branches everywhere.

Can I open a savings account online?

Yes, it is possible and also much easier than opening an account by going to the bank or to a representative. All you need to do is get your id and fill out the application.

My application for a savings account was not accepted, why?

Banks reject an account opening application due to several factors that include bounced checks, or unpaid fees that are recorded in the ChexSystems. If such is the case, you should open a second chance checking account. They will help you in improving previous records and enable you to open a regular account after 12 months.

This page is purely informational. Line does not provide financial, legal or accounting advice. This article has been prepared for informational purposes only. It is not intended to provide financial, legal or accounting advice and should not be relied on for the same. Please consult your own financial, legal and accounting advisors before engaging in any transactions.

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