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How to Open a Savings Account
A savings account is a great way to set aside funds for many purposes. Emergencies, vacations, a new car, a down payment on a home — a savings account helps with all of these. But when you open a savings account, you're doing much more.
Separating your savings from your checking account lets you build toward future goals while keeping your money accessible and safe. In this article, we'll look at their benefits and show you how to open a savings account.
8 steps to opening a savings account
Once you've settled on the type of savings account you prefer (more on that later), you can move to the process of opening one. Both traditional banks and online banks make the process straightforward. Here's the usual procedure for application online:
1. Find link:
After visiting the bank's savings account webpage, look for something like an "Open Account" button. You should be able to choose either an individual or joint account
2. Enter info:
Enter personal info required, such as your current address, phone number, birthdate, SSN. You might also need a driver's license, state ID, or passport to enter their ID numbers
3. Add employment:
For federal banking reasons, enter your type of employment. You shouldn't need to enter how much you earn
4. Request card:
Somewhere along the line, you'll likely be offered the option to request an ATM/debit card to gain access to your account from an ATM. But if not, you might be able to request one after opening the account
5. Link accounts:
You might be able to link your new savings account to an existing checking account at that same bank (if you have one.) Or you may be able to open a checking account at the same time, as your personal info is the same for both accounts
6. Fund account:
Fund your account. There may be a minimum opening deposit required at account opening. Many banks give you the option to transfer funds from an account at another bank. Or you may be given the option to make the deposit later in person at a branch office or ATM
7. Create logon info:
You'll likely be requested to create a username for your account, and then pick a password. Sometimes the first password will be a temporary one
8. Log in:
To finish, you'll log in to your new account with the above info. You may be asked to set a new, strong password for the account
That's it. You should be all done, and now you have a brand-new savings account. If you haven't funded your account yet, don't forget to do it. Financial institutions might close new accounts that continue to show a zero balance after 90 days.
What to consider about a savings account
Before settling on one type of savings account, there are a few things to consider. Pairing saving accounts with checking accounts often provides other advantages. For example, if certain balance levels are maintained, you might receive an interest rate bump on your account. In some cases, you might avoid checking overdraft fees if your savings account is set as a backup funding source.
Fees
Whether you'll pay a monthly fee for savings accounts depends on several factors. Linking checking and savings bank accounts might result in a waiver of monthly fees. Meeting the minimum balance requirements for your savings account could also eliminate the fee. Even a small monthly maintenance fee adds up in the long run. A minimal fee of $5 a month, for a full year, comes to $60 — a nice amount to save.
Some banks might charge a start-up fee to open a savings or checking account. But others don’t, so shop around. The best savings accounts won't charge you fees to start, though monthly fees are common.
Security measures
The security of your funds is vital and losing money from banking defaults is unacceptable. Financial institutions that declare themselves "member FDIC" are referring to the Federal Deposit Insurance Corporation. The FDIC insures deposits up to at least $250,000 per depositor, per FDIC-insured bank, per ownership category, in the event that the FDIC-insured depository institution fails. (Credit unions aren't FDIC insured. But a credit union may have similar coverage through the National Credit Union Administration.) Both types of insurance provide peace of mind that your money is covered.
Access
If you're saving for long-term purchases, such as a boat, car, or home — easy access might not interest you. But if you are starting an emergency fund, you'll want 24/7 access. Online banking that includes round-the-clock ATM access with a debit card would be worth considering.
Account holders might appreciate other useful options, like mobile banking. These services could include paying bills, depositing a check through a mobile app on your smart phone, and setting up balance alerts and message alerts.
Yields
Find out the annual percentage yield (APY) the accounts might offer. Savings account interest rates change along with economic conditions. Even slight differences in annual percentage yield could make big impacts over time.
Simple, but powerful
From students to seniors, savings accounts give people a simple, powerful tool for managing their money. When you build up your savings account, you might reach your financial goals sooner than you think.
Take a look at the options at TD Bank and find the right account for you. TD Simple Savings is a popular choice. Keep a $300 minimum daily balance and there's no monthly maintenance fee. And it includes up to 6 withdrawals per monthly cycle without incurring a withdrawal-limit fee.
More tips for everyday saving, spending and living
There's always more to learn when it comes to managing your money.