How to Open A Savings Account

A savings account can offer a secure place to keep money you don't plan to spend right away. Here's a simple guide to how to open a savings account.
Written by
Our articles, research studies, tools, and reviews maintain strict editorial integrity; however, we may be compensated when you click on or are approved for offers from our partners.
open savings account
Opening a savings account is easy. Figuring out which one to get is a little more involved.

If saving money is one of your top financial goals, opening a savings account is an important first step to keep your funds safe and separate.

You’ll need to know what the requirements are for how to start a savings account – and that’s what you’ll find in this step-by-step guide.

But the most critical information about your decision to open a savings account is also in the guide. Here’s what you’ll learn:

  • Where to find the best savings account rates so your money works hard for you
  • How to choose between banks and savings accounts
  • What a savings account is and why it’s important to have one

Current savings account rates

How to Open a Savings Account

Opening a savings account isn’t hard to do. Most financial institutions make it very easy to make your initial deposit and start saving.

Plus, savings accounts are ubiquitous. Virtually every bank or credit union in the U.S. offers savings accounts among its products and services.

The problem is, most of these are not great savings accounts.

In fact, finding a bank that offers a high interest savings account is rather difficult to do – unless you know where to look.

Here’s how to find the best savings account for you and your financial needs:

If you’re just getting into the habit of setting aside money, you may need to start here:

Step 1. Set your priorities: What do you need from a savings account?

If you need to find banks that consistently offer the best savings account interest rates, start here:

Step 2. Do your research: Compare banks and savings account options.

If you’ve found a high yield savings account and just need to know what steps are involved, jump to this step:

Step 3. Gather documents and required information

Step 4. Complete the application and make your initial deposit

Step 1. Set your priorities: What do you need from a savings account?

Before opening a savings account, think about what matters to you and what you need from a bank or credit union, in terms of products and services.

When making a checklist of your ideal savings account features, be sure to consider:

  • Safety and security

    Will your deposits be insured by the FDIC or the NCUA?

  • High yield

    What kind of interest rates are you hoping to earn?

  • Convenience

    What kind of online banking and mobile banking features are there? (person-to-person payments, mobile check deposit)

  • Accessibility

    How easily can you add money to your account or make withdrawals (branches, ATMs, automatic transfers)

  • Minimum requirements

    How much of an initial deposit you can afford to make?

  • Cost

    Is the fee structure prohibitive?

Note: If you’re planning to open a joint savings account and won’t be the sole account holder, be sure to get the other person’s input on what they need as well. It’s best to find a savings account option that works for both of you from the start.

Step 2. Do your research: Compare banks and savings account options.

This may be the most important step when opening a savings account. Taking time to research what individual banks and credit unions offer to savers is key to choosing the right account for you.

When comparing banks, the two most critical factors to consider are:

Most financial institutions in the U.S. have deposit insurance from the FDIC or the NCUA. Deposit insurance covers savings accounts up to $250,000 per depositor, per financial institution, per account ownership type. Banks are required to display this image on their website and at each teller window (if they’re brick-and-mortar). Look for it to easily confirm FDIC insurance:


The best high yield savings accounts, on the other hand, are relatively difficult to find unless you know where to look. However, a unique study that MoneyRates conducts every quarter narrows the huge field of banks offering savings accounts down to the top ten.

Interest rates can change at any time, but the banks that make the top ten on the America’s Best Rates Survey consistently offer the best savings account interest rates over an entire quarter. And many of these banks make the top ten list every quarter, year after year.

Using rate consistency to compare banks is one way to determine which has the best savings account rates, but there are other important factors to consider too. For instance, you should also be looking at:

  • Any monthly fees the bank charges and what you can do, if anything, to avoid them
  • Minimum balance requirements and minimum balance fees, if any
  • Monthly withdrawal limits and excess withdrawal fees, if any
  • Other fees, such as paperless statement fees or early account closure fees
  • Whether the bank offers personal finance tools such as free savings calculators or budgeting tools
  • Customer service and how you can get in touch with your bank if necessary
  • Online and mobile banking features and benefits

You may also want to consider whether a bank offers other products and services you might need such as checking accounts, certificate of deposit accounts, personal loans, or credit cards. You may find it more convenient to do all of your banking in one place as opposed to spreading your money across several financial institutions.

It can also be helpful to consider the bank’s overall reputation and how it is perceived by customers and the banking industry. The goal should be to find a trustworthy place to keep your money that offers a desirable combination of high interest rates and low fees.

Step 3. Gather documents and required information

Bank and credit union requirements for opening a savings account typically follow similar guidelines. Generally, you need to be able to provide proof of identity, meet the minimum age requirement and offer a funding source to make your initial deposit.

As you prepare to open your savings account, it helps to have your information and key documents all together, including:

  • A copy of your government-issued ID
  • Bank account number and routing number to make your opening deposit
  • Your address, email and phone number
  • Date of birth
  • Social security number

Again, if you plan to open a joint savings account, then you need to provide this information for each account holder.

Also, keep in mind that you may need to have a certain amount of money available to open a savings account. While some banks set the minimum initial deposit requirement at $1 or even $0, other banks may require $500, $1,000 or more to open a savings account.

Step 4. Complete the application and make your initial deposit

Opening a savings account is easier than ever now because many banks let you do so online instead of visiting a branch in person.

If you’re ready to open a savings account online, you just need to complete the application and follow the bank’s instructions for how to finalize it. Again, completing the application means giving the bank your personal information as well as financial details for making your initial deposit.

Before you submitting your application, though, take a moment to review the terms and conditions associated with the account. This is your chance to double-check what you’re agreeing to in terms of fees, interest rates, minimum balance requirements, etc.

Depending on the bank, it may take a few business days for your application to be reviewed and confirmed. Once your account is open, you may have to verify one or two small test deposits if you linked an external bank account. But after that, you can begin setting up automatic transfers or direct deposits to add money to savings regularly.

Regular Savings Account vs. High Yield Savings Account

Savings accounts all serve a similar purpose: helping you set aside money while earning interest. But they aren’t all alike.

Brick-and-mortar bank and credit union savings accounts, for example, may offer lower interest rates than savings accounts from online financial institutions. Since online banks tend to have lower overhead costs, they can pass that on to savers in the form of fewer fees and higher interest rates.

High yield savings accounts are just what they sound like – savings accounts that earn an above-average annual percentage yield. Opening a high interest savings account would make sense if you want to earn the best rate possible on your money.

One thing to note about high yield accounts is how the interest rates and APYs are applied. Some banks, for example, offer the same rate and APY to all savers, regardless of their balance. But other banks may tier rates so that you need a higher minimum balance to qualify for the best rates.

Paying attention to that matters if you’re starting off with a smaller amount of money to save.

What is a Savings Account, and Why Should You Get One?

A savings account is a type of deposit account that allows you to set aside money for future use. The primary purpose of a savings account is to keep funds safe, liquid, and stable in terms of changes in value.

This is different from a checking account, which lets you deposit money that you plan to use for purchases or paying bills. With a checking account, you might get a debit card and paper checks; but a savings account typically doesn’t come with those features. (Some banks may give you a free ATM card that you can use to access your savings, however.)

Savings accounts are particularly useful for housing money you’ll need in the short term. For instance, you might open a savings account to:

  • Act as your emergency fund
  • Prevent overdraft fees from being charged to a linked checking account
  • Keep money separate until needed

Once you make your initial deposit and your account is open, you can keep adding money and earning interest over time until you need or want to tap into those funds. You may find all sorts of different reasons to save, like:

  • Setting aside money for a vacation
  • Saving up for a car
  • Creating a cash fund for wedding expenses
  • Building up for a down payment on a home

Ultimately, the best savings account is the one that checks off all of your personal boxes, in terms of interest rates, fees, accessibility and features.

Frequently Asked Questions

Q: We have a small, not-for-profit homeowners association (HOA). Can a nonprofit organization have a savings account or a CD?

A: Yes, nonprofit organizations can certainly have different types of bank accounts. The key to make the most of your not-for-profit status and get the best terms possible from the bank.

Nonprofit-bank-account rules

If your HOA has not already done so, you should apply to the Internal Revenue Service (IRS) for recognition of your entity’s tax exempt status. This is usually done using IRS Form 1023, Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code.

Once your tax-exempt status is recognized, the organization should obtain an Employer Identification Number (EIN), even if it doesn’t have any employees. This EIN serves as an identification number for tax purposes, which will be important when you set up a bank account.

You should make sure that any bank account owned by the homeowners association is identified as such by the association’s EIN, so that any interest earnings in the account benefit from the association’s tax-exempt status.

Even with tax-exempt status, it is likely your HOA will have to file an annual tax return. This is very important, because while it may not owe any taxes, the HOA is subject to IRS penalties if it fails to file a return. Also, if it fails to file for three consecutive years, the organization automatically loses its tax-exempt status.

When you set up bank accounts on behalf of the HOA, you should tightly control who in the organization has authorization to access those accounts. Also, there should be a system of record keeping and oversight to make sure funds are used exclusively for legitimate association business.

Finding the best banks for nonprofits

Once your HOA has established not-for-profit status, it should take steps to find the right type of bank account for organizations of its type. The following are some issues to consider:

  1. Savings, checking or both?
    One nonprofit bank account may not be enough. If you are going to need frequent access to your money, a checking account is probably right. However, if you can put money aside for longer periods, a savings account for nonprofit organizations enables you to earn more interest. You may well find you have needs for both types of accounts.
  2. Checking account fees
    While interest rates are the key characteristic when shopping for a savings account, most likely fees should be a primary criterion for choosing a checking account, especially monthly maintenance fees. The best banks for nonprofits often have low monthly fees.
  3. Longer commitments equal higher rates
    If you have savings you don’t need to access regularly, you will likely earn a higher rate of interest if you can commit the money for a fixed period of time in a certificate of deposit (CD) — the longer the commitment, the higher the rate.
  4. Pay attention to balance requirements
    If your account is likely to maintain a low balance or periodically draw funds down to low levels, check on the balance requirements of any account you consider. This can help make sure you receive a favorable interest rate and avoid additional fees.
  5. Compare rates and fees once you know your needs
    Once you know the type of account you need and how you will use it, do some comparison shopping. In banking, one size does not fit all so the account terms being offered depend very much on the type and usage of the account.
  6. One bank may not meet all your not-for-profit banking needs
    If you need one account for frequent transactions and another for longer-term savings, don’t lock yourself into the notion that all your funds have to be with one bank. If these different needs are best met by different banks, then set your accounts up accordingly.
About Author
Rebecca Lake joins MoneyRates as a contributor writing about banking, credit and debt, home-buying, investing, small business, and other personal finance topics. Rebecca brings her expertise as a personal-finance journalist to, having written about money for over five years. Her work has appeared online at U.S. News and World Report and many other publications.