Most banks let you open a savings account for free, but some charge a monthly fee if you don't meet their requirements
Opening a savings account itself costs nothing at most banks and credit unions. You walk in, fill out paperwork, and leave with an account number. No opening fee, no setup charge. But many banks charge a monthly maintenance fee — usually $5 to $15 — if your balance falls below a minimum or if you don't set up direct deposit. Some banks waive the fee if you keep a certain amount on hand, make regular deposits, or link the account to a checking account with them.
The real cost of a savings account is not what you pay to open it — it's what you lose by keeping money somewhere that pays almost nothing. Most savings accounts at big banks pay 0.01% annual interest, meaning $1,000 sits there earning about 10 cents a year. Online banks and credit unions often pay 4% to 5%, which means the same $1,000 earns $40 to $50 annually. Over time, that difference adds up.
Key Takeaways
- Opening a savings account is free at nearly all banks and credit unions — there is no charge to create the account itself.
- Monthly maintenance fees of $5 to $15 apply at many large banks if your balance drops below their minimum or you don't meet other conditions.
- Online banks and credit unions typically charge no monthly fee and pay higher interest rates than traditional banks.
- The biggest cost is lost interest: keeping money in a 0.01% account instead of a 4% account costs you hundreds of dollars per year on larger balances.
- Read the fee schedule before you open — it tells you exactly what triggers a charge and how to avoid it.
Where monthly fees come from and how to avoid them
Banks impose monthly maintenance fees to cover the cost of running your account. They waive the fee if you meet one or more conditions. Common ways to avoid the charge: keep a minimum balance (often $500 to $2,500), set up direct deposit of your paycheck, maintain a linked checking account at the same bank, or make a certain number of deposits per month.
Before opening an account, ask the bank or credit union for their fee schedule — usually called a "Schedule of Fees" or "Deposit Account Agreement." It lists every charge, what triggers it, and how to avoid it. If the minimum balance is $1,500 and you rarely have that much in savings, that account will cost you $60 to $180 per year in fees. A different bank with no minimum might be worth switching to.
Interest rates: the hidden cost of the wrong account
A savings account at a large national bank typically pays 0.01% to 0.05% annual interest. A credit union or online bank pays 4% to 5.35% (rates change weekly, so check current rates before you decide). On a $5,000 balance, the difference is roughly $200 to $250 per year — money that stays in your pocket instead of the bank's.
This matters most if you are saving for something specific: a car, a down payment, an emergency fund. The longer the money sits there, the more interest you lose by choosing the wrong account. A $10,000 emergency fund earning 0.01% grows to $10,001 in a year. The same $10,000 at 4.5% grows to $10,450. That $450 is real money you gave up by not shopping around.
Types of accounts and what they cost
| Account Type | Opening Cost | Monthly Fee | Typical Interest Rate |
|---|---|---|---|
| Large bank savings account | Free | $5–$15 (if minimum not met) | 0.01%–0.05% |
| Online bank savings account | Free | None | 4%–5.35% |
| Credit union savings account | Free | $0–$5 (varies by union) | 0.5%–4.5% |
| High-yield savings account | Free | None | 4%–5.35% |
| Money market account | Free | $10–$25 (if minimum not met) | 0.5%–5% |
What to check before you open
Before you hand over your information, look at three things: the monthly fee and how to avoid it, the interest rate, and whether the bank is insured. All banks and credit unions covered by FDIC or NCUA insurance protect your money up to $250,000 if the institution fails — this is not a cost, but it is essential to verify.
Ask or look online for the fee schedule. Call the bank or visit their website and search for "savings account fees" or "deposit account agreement." If you cannot find it easily, that is a sign the bank makes money by burying fees in the fine print. Institutions that charge nothing usually advertise it clearly.
When you might pay more than the monthly fee
Some banks charge fees beyond the monthly maintenance charge. Overdraft fees (when you spend more than you have) can run $25 to $35 per transaction, though savings accounts rarely overdraft. Withdrawal fees apply if you take out money too many times in a month — federal rules once limited savings withdrawals to six per month, and some banks still charge if you exceed that, though the rule no longer applies. ATM fees hit you if you use an out-of-network machine, typically $2 to $3 per withdrawal.
These fees are separate from the monthly charge and can add up fast. A credit union or online bank with no monthly fee and no ATM fees saves you money even if the interest rate is slightly lower than a competitor's.
Opening an account online versus in person
Opening online is free and takes 10 to 15 minutes. You provide your name, address, Social Security number, and initial deposit (some banks require a minimum, often $25 to $100). The account opens immediately, and you can start using it the same day. Opening in person at a branch is also free and takes about 20 minutes. You bring an ID and initial deposit, sign paperwork, and leave with a debit card or account number.
Neither method costs money. The difference is speed and convenience. Online is faster if you do not have a branch nearby. In person is better if you want to ask questions or prefer to hand over documents yourself. Either way, the account is free to open.
Frequently Asked Questions
Do I have to keep a minimum balance to avoid fees?
It depends on the bank. Some require a minimum balance (often $500 to $2,500) to waive the monthly fee. Others waive it if you set up direct deposit or link a checking account. Read the fee schedule to see which conditions apply to your bank. If you cannot meet them, choose a bank with no minimum.
Can I move money to a different bank if I find a better rate?
Yes. There is no fee or penalty for closing a savings account and moving your money elsewhere. Withdraw your balance, open an account at the new bank, and deposit the money. The whole process takes a few days. You lose no interest by switching — you only lose interest by staying in a low-rate account.
What if I only have $50 to start with?
Most banks and credit unions let you open an account with $25 to $100. Some online banks have no minimum at all. Once the account is open, you can add money whenever you want. Start small and build from there — there is no penalty for a low balance as long as you meet the bank's conditions to avoid monthly fees.
Is my money safe in a savings account?
Yes, as long as the bank or credit union is FDIC or NCUA insured. Check the bank's website or call to confirm. Your money is protected up to $250,000 per account, per institution. If the bank fails, the government guarantees your deposit. This protection is free and automatic — you do not have to do anything.
Why do some banks pay so much more interest than others?
Online banks have lower overhead costs than branches, so they pass savings to customers through higher interest rates. Large national banks with thousands of branches have higher costs and pay less interest. Credit unions are member-owned and often pay more than banks. Shop around — the difference in interest can save or cost you hundreds of dollars per year.