Start with your bank or credit union
The fastest place to open a savings account is where you already bank. If you have a checking account at a bank or credit union, you can walk in, call, or log into your online account and request a savings account in minutes. The institution already has your identification and address on file, so the process is straightforward.
If you do not have an existing relationship with a bank or credit union, you will need to provide a government-issued ID, proof of address (a utility bill or lease works), and your Social Security number. Some banks also ask for an initial deposit before they open the account—amounts vary from $0 to $300 depending on the institution.
Credit unions often have lower fees and higher interest rates than large banks, but membership is restricted. You can only join a credit union if you meet their membership criteria—usually living or working in a specific area, working in a certain industry, or being related to a current member. Use the CO-OP or Alliant networks to search for credit unions near you.
Key Takeaways
- Your current bank or credit union is the easiest starting point because they already have your information and can open an account in one visit or phone call.
- Online banks typically offer higher interest rates than brick-and-mortar banks but have no physical branches, so all transactions happen by phone, app, or website.
- Credit unions often charge lower fees than banks but require membership, which depends on where you live, work, or your family connections.
- Compare interest rates, monthly fees, minimum balance requirements, and withdrawal limits across at least three institutions before deciding.
- You will need a government ID, proof of address, and your Social Security number to open an account at any bank or credit union.
Compare online banks for higher interest rates
Online banks—institutions with no physical branches—typically pay higher interest on savings accounts than traditional banks. They have lower overhead costs and pass some of that savings to customers through better rates. The trade-off is that you cannot walk into a branch; all deposits, withdrawals, and customer service happen through a website, mobile app, or phone call.
Online banks include names like Ally, Marcus, Discover, and Wealthfront. Each has different interest rates, fee structures, and minimum balance requirements. Interest rates change frequently, so check the current rate on the bank's website before opening an account—do not rely on rates quoted in articles or ads.
Most online banks have no monthly maintenance fees and no minimum balance requirement, which makes them a good option if you have a small amount to save or irregular income. Some offer features like automatic transfers to help you save toward a goal.
Understand the difference between savings and money market accounts
A savings account is a basic deposit account where you earn interest on your balance. You can make withdrawals whenever you need the money, though federal rules once limited you to six withdrawals per month—that rule is no longer enforced, but some banks still impose their own limits.
A money market account is a hybrid between a savings account and a checking account. It usually pays a higher interest rate than a savings account but requires a larger minimum balance (often $2,500 or more). Money market accounts come with a debit card or checkbook, so you can access your money more easily than with a traditional savings account.
For most people starting out, a regular savings account is the right choice. Money market accounts make sense if you have a larger amount saved and want both interest earnings and easy access to your money.
Check for fees and minimum balance requirements
Banks charge different fees depending on the account type and how you use it. Common fees include monthly maintenance fees (usually $5 to $15), overdraft fees if you withdraw more than your balance, and fees for falling below a minimum balance requirement.
Many online banks and credit unions have no monthly maintenance fee and no minimum balance. Traditional banks often waive fees if you maintain a certain balance—typically $500 to $2,500—or if you set up direct deposit. Ask the bank directly what fees apply to the specific account you are considering, because fee structures vary widely.
A savings account with no monthly fee and no minimum balance is usually the best starting point. Once you have built up savings, you can explore accounts that pay higher interest but require larger balances.
Look at interest rates and how they are calculated
The interest rate a bank pays on savings is called the annual percentage yield (APY). This rate changes based on the Federal Reserve's decisions and the bank's own policies. Banks with higher APYs are generally better for your savings, but rates change frequently—sometimes weekly.
Interest is usually calculated daily and deposited monthly. This means the bank looks at your balance every day, adds up the interest earned, and pays it to you once a month. Some banks compound interest, meaning they add interest to your balance and then calculate interest on that new total the next day—this earns you slightly more over time.
Before opening an account, check the current APY on the bank's website. Websites like Bankrate and DepositAccounts list current rates across many banks, which makes comparison easier. A difference of 0.5% APY might seem small, but on $10,000 it adds up to $50 per year.
Decide whether you need a physical branch
If you prefer to deposit cash, speak to a person in person, or handle banking face-to-face, you need a bank with physical branches. Online banks do not accept cash deposits and do not have staff you can visit. Some online banks partner with ATM networks so you can withdraw cash, but depositing cash is difficult.
If you rarely use cash, do most banking on your phone, and are comfortable calling customer service, an online bank works well. If you deposit cash regularly or like having a branch nearby, choose a traditional bank or credit union.
Some people use both: a local bank for cash deposits and branch access, plus an online savings account for higher interest rates. This approach lets you earn more on savings while keeping the convenience of a nearby branch.
Open your account online, by phone, or in person
Once you have chosen a bank, opening an account takes 10 to 30 minutes. Online banks let you start the process on their website—you enter your personal information, verify your identity (usually by uploading a photo ID), and confirm your address. Some ask you to verify a small deposit to your existing bank account to confirm it is real.
Traditional banks let you open an account in a branch, by phone, or online. In-branch is fastest if you have questions, but phone and online are just as reliable. You will need your ID, proof of address, and Social Security number ready.
After you open the account, the bank gives you an account number and routing number. You can use these to set up direct deposit from your employer or transfer money from another account. Most banks send a debit card within 7 to 10 business days if the account includes one.
Frequently Asked Questions
Do I need a minimum amount of money to open a savings account?
Most online banks and credit unions have no minimum opening deposit. Traditional banks often require $25 to $300 to open an account. Check with the specific bank before you start the process. Some banks waive the minimum if you set up direct deposit.
Can I open a savings account without a Social Security number?
No. Banks are required by federal law to collect your Social Security number or Individual Taxpayer Identification Number (ITIN) to prevent fraud and money laundering. If you do not have a Social Security number, you can use an ITIN, which you can obtain from the IRS.
How long does it take to access my money after I open an account?
You can usually transfer money into your new savings account immediately after opening it. Transfers from another bank take 1 to 3 business days. Debit cards typically arrive in 7 to 10 business days. Cash deposits at a branch are available right away.
What is the difference between a savings account and a checking account?
A checking account is for frequent deposits and withdrawals—paying bills, getting cash, making purchases. A savings account is for storing money and earning interest. Savings accounts traditionally had limits on withdrawals, though that rule is no longer enforced. Checking accounts usually pay little or no interest.
Can I move my money to a different bank later?
Yes. You can close a savings account at any time with no penalty. To move money to a different bank, transfer it to your new account and then close the old one. Keep the old account open for at least a few days after the transfer to make sure it went through.