A savings account is a bank account used primarily for saving money. Savings accounts are best for individuals who want to store money for things like emergencies, college funds, auto purchases, and holidays, just to name a few. Many savings accounts offer the consumer the ability to earn interest every year, and some savings accounts, called “high-yield” savings accounts, allow a consumer to earn interest that is much higher than the average rate.
Finding the Right Bank Account
The first step in opening a savings account is finding the right account. You need to ask yourself what the main purpose is for opening the account. For example, is it to start a college fund or save for retirement? A high yield savings account is generally a good idea for any purpose, as it would allow additional interest to be earned while the money sits. An online comparison tool can show you the various features, benefits, and interest rates of savings accounts offered by several banks. You can then choose a preferred bank and product from the list of available accounts.
Deciding on an Initial Deposit
The initial deposit is the amount of money you choose to submit upon the opening of a savings account. Some banks require a minimum amount of money to be deposited in a savings account upon opening. The figure may be a mere $25 or as high as several thousand dollars depending on the type of account you’re opening. Other than the bank's requirements, the initial deposit is up to you. You can place the minimum amount or as much as you want.
How to Open a Bank Account
You can open a bank account either in person or online. To open an account online, you can visit the site of your preferred banking institution and fill out an application. An application will ask detailed information concerning your social security number, driver license information, address, etc. Some applications have additional verification processes that you must pass before you can open an account to prevent fraud. At the end of the verification process, the website will instruct you to make an initial deposit.
Documents Needed to Open a Bank Account
You can open a bank account at a local branch if you bring the required documentation. You will need a valid picture ID such as a driver’s license and a social security card and the bank will need to document your social security number for legal reasons. Furthermore, the bank may check if you’ve had any negative interactions with banks in the past. If you clear the verification process, then the bank will let you open a savings account.
