What you need to open a savings account
To open a savings account at a bank or credit union, you will need a government-issued photo ID (driver's license, passport, or state ID card), proof of your current address (a utility bill, lease, or bank statement dated within the last 60 days), and your Social Security number. Some banks also ask for an initial deposit, which ranges from $0 to $300 depending on the institution — many online banks have no minimum.
If you do not have a photo ID, some credit unions and community banks will open an account using alternative documents like a birth certificate plus a secondary ID. Call ahead to ask what they accept. If you do not have a Social Security number, you may be able to use an Individual Taxpayer Identification Number (ITIN) instead, though fewer banks offer this option.
You can open an account in person at a branch, by phone, or online. Online accounts typically open fastest — often within minutes — while in-person and phone applications may take one to three business days for the bank to verify your information and activate the account.
Key Takeaways
- You need a photo ID, proof of address, and your Social Security number to open most savings accounts, though requirements vary by bank.
- Initial deposits range from $0 to $300 depending on the bank, and many online banks require no minimum at all.
- Online accounts open fastest, usually within minutes, while branch and phone applications take one to three business days.
- Once your account is open, you can deposit money by direct deposit, ATM, mobile app, or in-person at a branch.
- Monthly fees, interest rates, and withdrawal limits vary widely, so comparing banks before you open an account saves money over time.
How to deposit money into your new account
Once your account is open, you have several ways to put money in. Direct deposit is the fastest and most common method — you give your employer or benefits administrator your account and routing number (found on a check or in your online banking portal), and they deposit your paycheck or payment automatically on a set schedule. This typically takes one to two business days to process.
ATM deposits let you insert cash or checks into an ATM owned by your bank or a partner network. The money usually appears in your account within one business day. Mobile app deposits let you photograph a check and submit it through your bank's app — this also typically takes one business day. In-person deposits at a branch teller are immediate, though the branch must be open during business hours.
If you receive a paper check, you can also mail it to your bank's deposit address, though this takes five to seven business days. Some banks charge a fee for mailed deposits or do not accept them at all, so check your bank's policy first.
Understanding interest rates and how your money grows
A savings account earns interest, which is money the bank pays you for letting them use your deposits. The rate varies by bank and changes over time — as of late 2024, rates range from nearly 0% at large national banks to 4% to 5% at online banks and credit unions. The higher the rate, the more your money grows without you doing anything.
Interest is usually calculated daily but paid monthly. If you have $1,000 in an account earning 4% annual interest, you earn roughly $40 per year, or about $3.33 per month. The exact amount depends on how many days are in each month and whether the bank compounds interest (adds earned interest back into your balance so it earns interest too).
Rates change frequently, especially when the Federal Reserve raises or lowers its benchmark rate. If your current bank's rate drops below 1%, moving your money to a higher-rate account can add hundreds of dollars per year with no extra effort on your part. Many people check rates every three to six months and switch banks when better options appear.
Monthly fees and how to avoid them
Many banks charge a monthly maintenance fee ranging from $5 to $15 if your balance falls below a minimum (often $500 to $2,500) or if you do not meet other requirements like setting up direct deposit. Some banks waive the fee if you maintain a certain balance, receive direct deposit, or use their debit card a set number of times per month.
Online banks and credit unions are more likely to have no monthly fee at all, regardless of your balance. If you carry a low balance or cannot meet a bank's requirements, choosing a no-fee account saves you $60 to $180 per year. Read the account terms before you open — the fee structure is usually listed under "Pricing" or "Account Fees" on the bank's website.
Some banks also charge fees for overdrafts (spending more than you have), excessive withdrawals, or using an out-of-network ATM. These fees can add up quickly, so understanding your bank's full fee schedule prevents surprises.
Withdrawal limits and how to access your money
Most savings accounts allow you to withdraw money whenever you need it, but some banks limit how many withdrawals you can make per month — typically six withdrawals before a fee kicks in. This rule comes from federal banking regulations, though many banks have relaxed it in recent years. Check your account terms to see if your bank enforces a withdrawal limit.
You can withdraw money by visiting a branch teller, using an ATM, transferring it to another account, or requesting a check. ATM withdrawals are immediate if the ATM is in your bank's network; out-of-network ATMs may charge a fee ($2 to $3 per transaction) and take one business day to process. Transfers to another bank account typically take one to three business days.
If you need to withdraw a large amount of cash (over $5,000), call your bank ahead of time to make sure they have enough cash on hand. Some branches keep limited cash and may need to order it from a regional center.
Comparing banks before you open an account
Before opening an account, compare at least three banks on four factors: interest rate, monthly fees, minimum balance requirements, and ATM network size. A spreadsheet with columns for each bank and each factor takes 10 minutes to build and can save you hundreds of dollars over a year.
If you use ATMs frequently, choose a bank with a large network or one that reimburses out-of-network fees. If you rarely visit branches, an online bank often offers higher interest rates and lower fees because it has no physical locations to maintain. If you prefer in-person service, a local credit union or community bank may offer better rates and more personalized support than a national chain.
Read recent customer reviews on sites like Trustpilot or the Better Business Bureau to see what people say about customer service, app reliability, and how the bank handles problems. A bank with a slightly lower interest rate but excellent customer service may be worth it if you need help.
Moving money between accounts and banks
Once your savings account is open, you can transfer money to and from other accounts you own — checking accounts, investment accounts, or accounts at other banks. Most banks let you link external accounts through their online portal by entering the account and routing number. The first transfer usually takes three to five business days while the bank verifies the account; after that, transfers typically take one to three business days.
If you want to move your entire account to a new bank, ask the new bank about their account transfer service. Many banks will handle the move for you, including redirecting direct deposits and automatic payments. This process usually takes one to two weeks. You can also close your old account once the transfer is complete, though some people keep both accounts open for a month to make sure nothing falls through the cracks.
When switching banks, update your direct deposit information with your employer or benefits administrator so future payments go to the new account. This prevents delays and confusion.
Frequently Asked Questions
Can I open a savings account without a Social Security number?
Some credit unions and community banks will open accounts using an Individual Taxpayer Identification Number (ITIN) instead, though options are limited. Call local banks and credit unions to ask which ones accept ITINs. You will still need a photo ID and proof of address.
What happens if I do not meet the minimum balance requirement?
The bank will charge your monthly maintenance fee, usually $5 to $15. The fee is deducted from your account balance. If you cannot maintain the minimum, switch to a bank with no minimum balance requirement — many online banks have none.
How much money should I keep in a savings account?
Financial advisors often suggest keeping three to six months of living expenses in savings for emergencies. Start with whatever amount you can save without hardship, even if it is $25 per month. Your savings account will grow over time through deposits and interest.
Can I have more than one savings account?
Yes. Some people open multiple accounts at different banks to take advantage of higher interest rates, or they open separate accounts for different goals (emergency fund, vacation, down payment). There is no limit to how many accounts you can have, though managing multiple accounts takes more time.
What is the difference between a savings account and a money market account?
Money market accounts typically offer higher interest rates but require larger minimum balances ($2,500 to $10,000) and may limit withdrawals. Savings accounts have lower minimums and fewer restrictions. If you have a small balance, a savings account is usually the better choice.