How to Open a Savings Account

1. Compare Savings Accounts

To find the best option for you, compare savings accounts from traditional banks, online-only banks and credit unions. Consider these factors:

• Interest rate: The annual percentage yield (APY) of each account reflects how much money you'll earn annually with compound interest. APYs on standard savings accounts are often under 1%; APYs on high-yield savings accounts are usually much higher.
• Fees: Banks may charge fees for account maintenance, using non-network ATMs, making more than six withdrawals per month or leaving your account inactive for six months or more.
• Initial deposit: Some savings accounts require a minimum opening deposit, usually $25 to $100.
• User friendliness: Check out the bank's website and mobile app to see if they're easy to use and whether they offer the features you want.
• Available services: If you want services such as access to a large network of ATMs, a safe deposit box, notary services or cashier's checks, make sure the bank offers them.
• Welcome bonuses: Some banks and credit unions give customers welcome bonuses for opening an account; this may require depositing a minimum amount or maintaining a minimum balance.
• Safety: Deposits at banks insured by the Federal Deposit Insurance Corp. (FDIC) or credit unions insured by the National Credit Union Administration (NCUA) are guaranteed up to $250,000 per depositor and account ownership category, even if the financial institution fails.

Learn more: High-Yield Savings Account vs. Traditional Savings Account

2. Choose an Individual or Joint Account

Couples can opt to open a joint savings account owned by both partners or separate accounts owned as individuals. You can also open multiple savings accounts, such as a joint account for shared goals and separate individual accounts for your personal savings, or one savings account for your emergency fund and another to save for a down payment on a home.

Tip: If you have over $250,000 to deposit, spreading your savings across several different bank account ownership categories, such as joint and single accounts, will give you more than $250,000 in FDIC or NCUA coverage for your funds.

3. Gather Required Documents

After choosing the savings account you want, you'll typically need the following information for your application:

• Government-issued ID: Passport, driver's license or state ID card
• Second form of ID: Social Security number (SSN), Individual Taxpayer Identification Number (ITIN), birth certificate or utility bill showing your name and address
• Contact information: Your name, address, phone number and email address

If you're opening a joint account, collect this information for both account owners.

Learn more: What Documents Do I Need to Open a Bank Account?

4. Submit an Application

Complete your application using the information above and sign it. Both online and traditional banks typically let you apply for a savings account online, although you can visit a branch in person if you prefer. Be prepared to make any required initial deposit when you fill out your application. If you plan to make an opening deposit in cash, you'll need to visit a physical location to complete your application.

Learn more: How Do You Open a Bank Account Online?

5. Make the Opening Deposit

You can open some savings accounts without depositing any money. Other accounts require a minimum opening deposit of $25, $100 or more. Check with the bank to see if there is a minimum deposit requirement. You can make an opening deposit by writing a check, depositing cash (at a physical branch) or transferring funds from another bank account. If you're transferring funds, be ready to provide your bank routing number, account number or debit card number.

Some banks may ask you to choose a beneficiary to inherit your account if you die. If not, you typically have the option to choose a beneficiary later.

Learn more: What Is a Minimum Deposit?

6. Set Up Online Banking Features

To get the most from your new savings account, take advantage of online banking features.

• Sign up for e-statements to monitor your account.
• Use the bank's mobile app or website to set up account alerts. You can typically get notified of deposits, withdrawals, when funds from a deposited check are available or when your balance dips close to the minimum required to avoid maintenance fees.
• Link your account to a checking or possibly another savings account so you can easily transfer money among your accounts.
• Set up direct deposits or automatic transfers to your savings account every payday to help grow your savings faster.

Learn more: How to Manage Your Savings Account Effectively

Frequently Asked Questions

The Bottom Line

A savings account offers a secure way to put aside funds for an emergency, a down payment on a home or other financial goals and earn interest on your money. Regularly adding to your savings account is a good financial habit to get into.

Checking your credit report and credit score on a regular basis is another positive habit that can boost your financial health. A good credit score may qualify you for lower interest rates on loans and credit cards, saving you money. As you work on improving your credit, consider signing up for Experian's free credit monitoring. You'll get access to your FICO^® Score^Θ and alerts of important changes to your Experian credit report, making it easy to track your progress.