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How to Open a Savings Account

Opening a savings account is a great way to grow your money safely.

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A savings account is a type of deposit account held at a bank or credit union. It typically pays interest -- although less than other types of deposit accounts -- and is ideal for building an emergency fund, saving for a short-term goal or simply sweeping surplus cash you don’t need in your checking account. Withdrawal limits are usually present, but it generally offers more flexibility than other savings vehicles.

What to consider when opening a savings account

The best savings account for you depends on your individual needs and preferences.

Interest rate

The higher the better. The interest rate on savings accounts is usually an annual percentage yield, or APY. This is the amount of interest you’ll earn on your balance over the course of a year. Alternatives to savings accounts, like money market accounts, certificates of deposit and high-yield checking accounts, may offer higher interest rates -- but these accounts also come with drawbacks, like higher minimum balance requirements.


Some savings accounts have fees associated with them. Banks may charge monthly maintenance fees and other types of fees, like ATM fees, exchange fees, account closing fees and overdraft fees.

FDIC or NCUA coverage

Most bank accounts are insured up to $250,000 by the Federal Deposit Insurance Corporation, while credit union accounts are insured by the National Credit Union Administration. Make sure the bank you choose is insured in the event your bank files for bankruptcy.  

Account accessibility

Some people prefer online banking while others prefer in-person customer service. You’ll also want to consider mobile banking capabilities and ATM access.

Minimum account opening balance

Some savings accounts have a minimum deposit requirement while others do not. Online banks usually have lower minimum thresholds, but many savings accounts only require you to deposit $25 to $100.

How to open a savings account

Depending on the institution, you could apply online, by phone, in person or even by mailing an application. You’ll need to provide personal information and a source of deposit. 

The bank will likely ask for your name, date of birth, Social Security number, address and contact information among other details. Be prepared to hand over your government-issued ID (or send a scan of it for online bank accounts.) If you’re applying for a joint account, you’ll also have to prove the identity of the other applicant

Can you be denied a savings account?

If your application has been rejected, the first thing you should do is contact the bank to find out why. Oftentimes, you may need to submit more personal information. If necessary, you can try using a different bank. Some banks have different rules when it comes to approving applications.

Alternatives to a savings account

Certificates of deposit

Certificates of deposit, or CDs, offer higher interest rates than most savings accounts but lock up your funds for a set term. For example, you could buy a five-year CD and earn a higher interest rate than a typical savings account, but you can’t touch that money for five years without incurring a penalty.

Money market accounts

money market account falls between a CD and a savings account in terms of interest rates and liquidity. Money market accounts typically have a higher minimum balance than a standard savings account and may offer some check-writing privileges.

Savings bonds

Savings bonds, like I bonds, are federal bonds offered through the US Treasury and are one of the safest investments you can make. 

The bottom line

Opening a savings account is a great way to grow your money while keeping it safe. Look for FDIC or NCUA coverage and a high-interest rate while avoiding fees. Other types  of savings accounts may offer better features depending on your goals.

Correction, 7:30 a.m. PT Jan. 25: A previous version of this article incorrectly named the FDIC as the Federal Deposits Insurance Company when it should’ve read the Federal Deposit Insurance Corporation.

This article was assisted by an AI engine and reviewed, fact-checked and edited by our editorial staff.