A savings account helps to put money away for the rainy day in addition to also growing your funds through the interest you receive from the bank.
Almost every bank in the U.S and around the world offers a savings account as one of its products or services, and you have to choose your bank based on your set criteria.
Opening a saving account is a great step towards a healthy financial life, and whether your saving towards a specific goal or want to put in place an emergency fund, find below the steps on how to open a savings account.
How to open a savings account
Opening a savings account isn’t difficult but these are the steps to take;
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1. Compare various options
Almost every bank offers a savings account as one of its services and you have many options. However to ensure that you have chosen the best bank that meets your criteria or needs, you have to consider certain key features like;
- Competitive interest rate
- minimum balance requirement
- monthly fee
- other charges
- branch net work
- other benefits
It may sound rational to open a savings account with a bank where you already have a checking account, but its still worth comparing your options to ensure you are getting a fair deal.
2. Gather required documents
You will require some documents to complete your account opening process. These documents to a certain extent will validate the information you have provided in your account opening form and they may vary from country to country.
Some of these documents and information include;
- Identification, such as a driver’s license or Int’l passport
- Passport Photographs
- Social security number
- Date of birth
- Address (and a proof of address/ Utility bill , if your ID lists a previous address)
- Contact information
3. Decide whether its a joint or individual account
Savings account could be individual or jointly owned. An individual account is for yourself alone while a joint account is when you are opening with another person such as your child or spouse.
Some of benefits of joint account includes;
- Easier access for your joint account holder
- FDIC insurance is higher (up to $500,000 instead of $250,000)
The joint account holder would be required to bring the same documentation as the other party to open the account.
4. Fund your account
You are expected to make an initial deposit. This can be done in cash or cheque if you are opening the account in person or a bank transfer . Most banks have a minimum opening deposit requirement of about $25 to $100.
Some banks also charge a monthly maintenance fee on the account and may require the account holder to maintain a minimum balance to avoid these fees.
You should make sure your opening deposit meets the minimum requirement and also big enough to avoid the maintenance fee as this can eat away at your savings.
5. Submit your application
You need to submit your application with all the required information and documents for your account to be opened. Once application is received and vetted, account opening is usually done immediately or within a few days and you can then start operating the account.
6. Set up online banking
Virtually every bank today offers some online banking services and you should sign up, for ease of transactions. You can perform almost all banking transactions today online and also download the bank’s app on your mobile phone.
Is opening a bank account online possible ?
Most banking institutions offer some form of online banking service, including opening your account online or over the internet. There are even banks today who operate solely online without physical touch points. This means that you can carry out every transaction over the internet.
Several online banks offer good savings account deals, including low minimum balances, high interest rates and no maintenance fees. Bank accounts can also be opened within minutes.
People who are tech – savvy would find transacting online a great choice rather than in person.
What to consider in choosing the best savings account
To make the best of your savings, you have to be able to choose the best savings account. In doing so you can consider these factors;
When it comes to savings account, the higher the interest rate , the better as your savings will grow faster. Interest rate offer should be a major factor in choosing a bank to open your savings account.
Whether the bank charges low or no maintenance fee should be another factor to guide your decision making. Unreasonable fees could reduce your savings. Some banks offer certain requirements which will enable you avoid such fees, like minimum balance or minimum number of transactions.
Consider and compare these fees with the interest on offer and decide whether you will end up losing or growing your savings.
Reason for saving
Your reason for saving is really important in choosing the best savings account. Are you opening the account the account to save for a specific goal in mind or you want to build an emergency fund. A specific goal would require getting the best rates which could quicken progress towards your goal; while an emergency fund would require an account that you could easily transact in the need arises.
Opening a savings account is a good step towards a healthy financial life. You should consider all your options before taking a decision as it could save you a lot of money.