What you need to open a savings account
Most banks and credit unions will ask for a government-issued ID, proof of your current address, and your Social Security number before you can open an account. Some institutions accept a passport or state driver's license; others may take a tribal ID or military ID. The address proof is usually a recent utility bill, lease, or bank statement with your name on it.
A few banks and credit unions have different rules. Some online banks do not require an initial deposit to open an account, while others ask for $25 to $100 upfront. A handful of institutions will let you open an account with just an ID and a phone number if you verify your address online later. Call or visit the bank's website before you go in to confirm what they need from you.
If you do not have a Social Security number, some credit unions and community banks will open an account using an Individual Taxpayer Identification Number (ITIN) instead. This is less common at large national banks, so you may need to search for institutions in your area that accept ITIN.
Key Takeaways
- You will need a government-issued ID, proof of your address, and your Social Security number or ITIN to open most savings accounts.
- Some banks require an opening deposit of $25 to $100, while others let you start with zero dollars.
- Online banks often have lower minimum deposits and higher interest rates than brick-and-mortar branches, but you cannot deposit cash in person.
- Credit unions may offer better rates and lower fees than banks if you meet their membership requirements, which vary by location and employer.
- The account opening process usually takes 10 to 20 minutes in person or 5 to 10 minutes online, and your account is ready to use the same day.
Opening an account in person at a bank or credit union branch
Walk into any branch during business hours with your ID, address proof, and Social Security number. Tell the teller or banker you want to open a savings account. They will hand you a form to fill out with your name, address, phone number, and Social Security number. You will also choose a PIN for your debit card and set up online banking access if you want it.
The banker will explain the account terms: the interest rate (called APY, or annual percentage yield), any monthly fees, and the minimum balance required to avoid fees. Read this carefully, because rates and fees vary widely between institutions. Some accounts charge $5 to $15 per month if your balance drops below $500; others have no monthly fee at all.
Once you sign the paperwork, the account is open. You can deposit money immediately using cash, a check, or a transfer from another bank account. Your debit card usually arrives in the mail within 5 to 10 business days, though some banks offer a temporary card you can use right away.
Opening an account online
Online banks and credit unions let you open an account from your computer or phone without visiting a branch. Go to the bank's website, click "Open an Account," and fill in your personal information. You will upload a photo of your ID and proof of address using your phone camera or computer. The bank verifies these documents, usually within a few minutes to a few hours.
Some online banks ask you to verify your identity by answering security questions based on your credit history, or by confirming small deposits the bank makes to an existing account of yours. This step can take 1 to 3 business days. Once verification is complete, your account is ready and you can transfer money in from another bank account immediately.
The main trade-off with online banks is that you cannot deposit cash in person. If you need to deposit cash regularly, you may want to choose a bank with physical branches, or open a second account at a local bank for cash deposits only.
Comparing interest rates and fees across institutions
Interest rates on savings accounts vary from nearly 0% at some large banks to 4% to 5% at online banks and credit unions, depending on the current economic environment. The rate changes over time, so check the bank's website for the current APY before you open the account. A higher rate means your money grows faster, but only if you leave it in the account.
Monthly maintenance fees range from $0 to $15. Some banks waive the fee if you keep a minimum balance (often $500 to $2,500), set up direct deposit, or maintain a linked checking account. Others charge the fee no matter what. Read the fee schedule on the bank's website or ask the banker directly—do not assume all accounts at the same bank have the same fees.
Use an online comparison tool or spreadsheet to list the APY, monthly fee, minimum balance requirement, and any other costs for 3 to 5 institutions you are considering. Over a year, the difference between a 0.01% rate and a 4.5% rate on $5,000 is roughly $225. The difference between a $0 fee and a $10 monthly fee is $120 per year. Both matter.
Understanding minimum balance requirements and monthly fees
A minimum balance requirement means you must keep at least a certain amount of money in the account at all times, or you will be charged a fee. Common minimums are $500, $1,000, or $2,500. If your balance drops below the minimum even for one day, some banks charge the fee immediately. Others only charge if your balance is below the minimum on the last day of the month.
Some accounts have no minimum balance at all. These are often called "no-frills" or "basic" savings accounts, and they usually pay a very low interest rate in exchange for flexibility. If you are saving small amounts or your balance fluctuates, a no-minimum account may be better for you even if the interest rate is lower.
Monthly fees typically range from $5 to $15 and are charged automatically if you do not meet the minimum balance or if you exceed a certain number of withdrawals in a month. Federal rules used to limit savings account withdrawals to six per month, but that rule was suspended in 2020. Most banks no longer enforce withdrawal limits, but some still do—ask before you open the account if you plan to withdraw money frequently.
What happens after you open your account
Once your account is open, you can deposit money by transferring it from another bank account, depositing a check in person or by mobile app, or depositing cash at a branch or ATM (if the bank has one). Your first transfer or deposit may take 1 to 3 business days to show up in your account, depending on the method and the banks involved.
You can check your balance anytime through the bank's website or mobile app, or by calling the customer service number on the back of your debit card. Most banks send a monthly statement by email or mail showing all deposits, withdrawals, interest earned, and fees charged. Review this statement each month to make sure everything is correct.
If you need to close the account later, contact the bank and ask how to withdraw your remaining balance. Most banks let you close an account online or by phone, though some require you to visit a branch in person. There is usually no fee to close an account, but confirm this before you do.
Choosing between a bank and a credit union
Banks are for-profit institutions owned by shareholders. Credit unions are nonprofit institutions owned by their members. In practice, this means credit unions often offer higher interest rates on savings accounts and lower fees than banks, but they may have stricter membership requirements.
To join a credit union, you usually have to meet one of their membership criteria: working for a specific employer, living in a certain geographic area, belonging to a particular organization, or having a family member who is already a member. Some credit unions have no restrictions and let anyone join. Search for credit unions in your area on the CO-OP or Alliant networks to find one you can join.
If you cannot join a credit union, or if you prefer the convenience of a large national bank with many branches, a bank savings account works just as well. The difference in interest rate or fees may be small enough that convenience matters more to you. There is no single right choice—it depends on your situation.
Frequently Asked Questions
Can I open a savings account if I have bad credit?
Yes. Banks and credit unions do not check your credit score to open a savings account. They may check ChexSystems, a banking history database, to see if you have had problems with previous accounts (like overdrafts or fraud). If you have a ChexSystems record, some banks will still open an account for you, though a few may decline. Call ahead and ask.
What is the difference between a savings account and a money market account?
A money market account usually pays a higher interest rate than a savings account but requires a larger minimum balance (often $2,500 or more) and limits how many times you can withdraw per month. If you have a small amount to save or need frequent access to your money, a regular savings account is usually better. If you have a larger balance and can leave the money untouched, a money market account may pay more interest.
How long does it take to open an account?
In person, the process takes 10 to 20 minutes. Online, it takes 5 to 10 minutes to fill out the form, but verification of your identity can take anywhere from a few minutes to 3 business days depending on the bank's process. Your account is usually ready to use the same day you open it, even if your debit card has not arrived yet.
Do I need a minimum deposit to open an account?
It depends on the bank. Many online banks and credit unions let you open an account with $0. Some banks require $25 to $100. Check the bank's website or call before you visit to confirm whether they require an opening deposit.
Can I have multiple savings accounts?
Yes. You can open savings accounts at different banks, or multiple accounts at the same bank. Some people use separate accounts to save for different goals (vacation, emergency fund, car down payment). Just remember that each account has its own fees and minimum balance requirements, so track them carefully.