The main places to open a savings account

You can open a savings account at a traditional bank, a credit union, an online bank, or sometimes through your employer. Each type has different fees, interest rates, and minimum balance requirements. The best choice depends on whether you want in-person service, low fees, higher interest, or a combination of those things.

Traditional banks like Chase, Bank of America, and Wells Fargo have physical branches where you can deposit cash and speak to someone in person. Credit unions are member-owned nonprofits that often charge lower fees and pay higher interest, but you must be a member to open an account. Online banks like Marcus, Ally, and Discover have no branches but typically offer the highest interest rates and lowest or no fees because they have no physical locations to maintain.

Key Takeaways

  • Traditional banks offer in-person service and cash deposits but often charge monthly fees and pay lower interest rates than online alternatives.
  • Credit unions typically charge fewer fees and pay higher interest, but membership requirements vary — some are open to anyone in a geographic area, while others require employment or family ties.
  • Online banks pay the highest interest rates and charge the fewest fees, but you cannot deposit cash in person and customer service is phone or chat only.
  • You will need a government ID, Social Security number, and proof of address to open an account at any institution.
  • Interest rates and fees change frequently, so compare current offers from at least two or three institutions before deciding.

Traditional banks: when you need a branch nearby

A traditional bank makes sense if you deposit cash regularly, need to speak with someone face-to-face, or want a single institution for checking and savings. You can walk in, deposit money immediately, and resolve problems with a teller. Most large banks also have ATM networks that let you withdraw cash without fees at thousands of locations.

The trade-off is cost. Many traditional banks charge a monthly maintenance fee (often $5 to $15) unless you maintain a minimum balance, which can be $500 to $2,500 depending on the bank. Interest rates are typically very low — often 0.01% to 0.05% annually, meaning a $1,000 balance earns less than $1 per year. If you keep a small balance and do not maintain the minimum, you will lose money to fees faster than you earn it in interest.

Large national banks include Chase, Bank of America, Wells Fargo, Citibank, and US Bank. Regional banks like PNC, SunTrust, and KeyBank serve specific areas. If you already have a checking account at a bank, opening a savings account there usually takes 10 minutes online or at a branch.

Credit unions: lower fees and better rates for members

Credit unions are nonprofit institutions owned by their members. They typically charge lower fees, pay higher interest on savings, and offer better loan rates than traditional banks. Many credit unions charge no monthly maintenance fee and no minimum balance requirement, and some pay 0.25% to 0.50% interest — much higher than traditional banks.

The catch is membership. You must meet the credit union's membership requirements to open an account. Some credit unions are open to anyone who lives or works in a specific county or city. Others require you to work for a particular employer, belong to a certain organization, or have a family member who is already a member. A few have no restrictions at all. You can search for credit unions near you at CO-OP.org or Shared Branch Locator to see which ones you can join.

Once you are a member, you can open a savings account in person at a branch or sometimes online. Membership is usually free or costs a small one-time fee ($5 to $25). Credit unions are insured by the National Credit Union Administration (NCUA), which protects your money the same way the FDIC protects bank deposits — up to $250,000 per account.

Online banks: highest interest rates, no branches

Online banks have no physical locations, which means they can offer the highest interest rates and the lowest fees. Banks like Marcus, Ally, Discover, and American Express Personal Savings currently pay 4% to 5% interest on savings accounts, meaning a $1,000 balance earns $40 to $50 per year. Most charge no monthly fee and have no minimum balance requirement.

The downside is that you cannot deposit cash in person. You deposit money by transferring it from another bank account, mailing a check, or setting up direct deposit from your employer. Withdrawals work the same way — you transfer money back to your bank or request a check. If you need cash immediately, you cannot walk into a branch. Customer service is available by phone or online chat, not in person.

Online banks are insured by the FDIC just like traditional banks, so your money is protected up to $250,000. Opening an account takes 10 to 15 minutes online. You will need your Social Security number, a government ID, and proof of address. Most online banks verify your identity instantly and let you start using the account the same day.

What you need to bring or provide

Regardless of where you open an account, you will need the same basic information. Have a government-issued ID ready — a driver's license, passport, or state ID card. You will also need your Social Security number and proof of your current address, which can be a recent utility bill, lease, mortgage statement, or bank statement dated within the last 60 days.

If you are opening an account in person at a branch, bring these documents with you. If you are opening online, you will upload photos of your ID and address proof, or answer security questions to verify your identity. Some online banks use video verification, where you show your ID to a camera and answer questions about your identity.

If you do not have a Social Security number, some banks and credit unions will open an account using an Individual Taxpayer Identification Number (ITIN) instead. Call ahead to confirm before you visit.

Comparing interest rates and fees across institutions

Interest rates on savings accounts change frequently — sometimes weekly. Before you open an account, check the current rate at the specific institution you are considering. A rate that is high today may drop next month, and a rate that is low now may rise later. Compare at least two or three options to see which offers the best combination of rate and fees for your situation.

Use Bankrate.com, DepositAccounts.com, or NerdWallet to see current rates across many banks and credit unions. These sites update rates daily and let you filter by account type, minimum balance, and fees. You can also visit each bank's website directly to see their current offer.

Pay attention to fees beyond the monthly maintenance fee. Some banks charge fees for transferring money out, closing the account early, or falling below a minimum balance. Online banks almost never charge these fees. Credit unions vary — some charge nothing, while others charge $3 to $5 per transfer if you exceed a certain number per month.

Opening an account online versus in person

Opening online is faster — usually 10 to 15 minutes — and you can do it anytime, day or night. You upload your ID and address proof, answer security questions, and the account opens immediately or within one business day. Online banks require this method. Many traditional banks and credit unions also offer online account opening.

Opening in person takes longer but gives you a chance to ask questions and understand the account before you commit. You bring your documents, fill out a form, and the account opens on the spot. You can also ask about fees, interest rates, and features that may not be clear on the website. If you are not comfortable with online verification or do not have a scanner to upload documents, opening in person is a better option.

Some institutions offer both. You can start the application online and finish it in a branch, or vice versa. If you are unsure which method to use, call the bank or credit union and ask what works best for your situation.

Frequently Asked Questions

Can I open a savings account without a Social Security number?

Yes, if you have an Individual Taxpayer Identification Number (ITIN). Some banks and most credit unions will open an account with an ITIN instead. Call ahead to confirm the institution accepts ITINs, because not all do. You will still need a government ID and proof of address.

How long does it take to open a savings account?

Online accounts usually open within 10 to 15 minutes, and you can use them the same day. In-person accounts open on the spot, but the process takes 20 to 30 minutes. Some banks take one to two business days to verify your identity before the account is fully active.

What is the difference between a savings account and a money market account?

A savings account is basic — you deposit money and earn interest. A money market account usually requires a higher minimum balance but pays slightly higher interest and may include a debit card or checkbook. For most people starting out, a regular savings account is simpler and cheaper.

Do I need to open a checking account to open a savings account?

No. You can open a savings account alone at any bank or credit union. Some institutions offer discounts if you open both at the same time, but it is not required. You can have a savings account at one bank and a checking account at another.

Which type of account is best for me?

If you deposit cash often or want in-person service, choose a traditional bank or credit union with branches. If you want the highest interest rate and lowest fees and do not need to deposit cash, choose an online bank. If you want a balance of both, choose a credit union or a traditional bank with low fees.