Opening a savings account is super easy these days. However, it’s important to understand some steps to identify the right one for you. Savings accounts provide you with the ability to earn money on your savings investment no matter where it’s located. Through interest, you earn money from your money, making it a simple and easy-to-understand process.
Steps for Opening a Savings Account
The good news is that opening a savings account could not be easier – banks want you to open an account and become part of the community, so they’re happy to work with you through the process.
1. Learn The Differences Between a Checking and Savings Account
When considering opening a savings account, first thing is ti understand the difference. There are two generic types of bank accounts for you to choose from: a checking and a savings account. A checking account is appropriate for paying your bills, writing checks, and making debit card purchases. It’s your “everyday account.” However, a savings account is wise if you want to build an emergency fund or put money away for specific goals.
So let’s say you want to put a down payment on a house in the coming years. A savings account is where you’ll start to save for this payment. The benefit of selecting a savings account over a checking account is that there is interest rates applied, earning you money while you leave your funds in that specific savings account.
2. Decide the Type of Account
You have a choice of selecting an online savings account or a regular money market account today. A money market account involves you physically walking into the institution and sitting down with a teller to get your sign-up all done. However, there are also online savings accounts today, which can be setup with an online assistant or over the phone. Once you decide between an online savings account and a money market account, it’s time to present the needed items and documentation and start the process for opening a savings account.
3. Gather Your Personal Documentation
The person opening your account is going to need you to present:
- Social security number
- A form of ID (driver’s license or passport)
- Initial deposit amount
For opening a savings accounts, You will also need to provide personal information, like your birth date, as well as all of this same information if there is to be a co-owner of the savings account.
Lastly, now is the time to let the bank know if you’re not a U.S. citizen or have had significant credit issues in the past.
4. Open a Savings Account
You’re now ready to apply! After making your first deposit, whether it’s in person or over the phone, you can begin wiring funds from other accounts in if you wish. If it’s your very first account, take time to read about the bank and its policies before you’re hit with confusing fees.
5. Close Any Old Accounts
Only applicable if you had an old account, be sure to speak with your employer about any direct deposits that were going into the old account, as well as automatic bill payments you have going out of it to cover bills.
Now that you are clear on the steps for opening a savings account, time to check out the best accounts and banks out there to find the right fit for you.