If you don’t already have a savings account, you’re missing out on some great perks. Not only can a savings account help you get ahead financially, but it can also be a great way to earn interest on your money. But if you want to open one and aren’t sure if you qualify for one, or if opening an online account just isn’t for you, we’ve got the answers to all your questions about eligibility and what makes for the best options.
How to open a savings account
To open a savings account, you’ll need to visit your local bank branch or log into the online banking system. Different banks have different saving account types and requirements for opening an account, so check with your institution before applying. Some basic things to consider include:
- How much money do you need to deposit to open the account and get started (this is called the minimum balance)
- What types of services are included with your savings account (for example, ATM access)
- Whether there’s any kind of monthly service fee associated with the account
Can I open a savings account online?
You can open a savings account online. This means you’ll be able to access your money through an internet-based platform without having to drive to the bank or visit their physical location.
If you’re interested in opening a savings account, here’s what you need to know:
How to select the best savings account
Once you know how to compare savings accounts, the next step is to choose the best one for your needs. That might mean finding a savings account with a good rate, earning interest on your money (an important part of saving), or getting other perks like free online billpay and no monthly fees. Here are some things to look for when comparing savings accounts:
- The interest rate is what determines how much of a return you’ll earn on the money in your account. A higher rate means more money in your pocket over time, but not immediately! It takes time for compounding interest to grow over time and start earning more than 1 percent per year, so don’t expect any miracles overnight. According to SoFi’s experts, “You may be able to open a high-yield savings account where you already bank, but the highest rates are often available from online banks.”
- You should also consider whether or not there are any hidden fees associated with opening an account or making regular deposits into it—like monthly maintenance charges or ATM withdrawal fees—and see if they outweigh any benefits the bank offers (like great customer service).
Why do you need a savings account?
A savings account is where you put your money when it’s not being spent or invested elsewhere. When you want to save up for something big down the line, like an emergency fund or a car payment, setting aside funds in a savings account helps ensure that those dreams will become a reality someday soon (hopefully).
If you’re a student, opening a savings account is a great way to get started with your first bank account. You can use it to save up for big purchases like books and supplies or even pay off that pesky credit card debt you owe from last semester. If you’re unsure whether this is the right time for you, don’t worry—we have plenty of other articles on this site full of helpful tips on how to improve your finances!