The offers on this page are from advertisers who pay us. That may influence which products we write about, but it does not affect what we write about them. Here's an explanation of how we make money.

How to open a savings account

Tanja Ivanova via Getty Images

At their core, all savings accounts are really the same. They are all intended to be safe bank accounts where your extra cash is stored until you need it.

These savings can be set aside for an unexpected expense or family emergency. They can also be earmarked for specific purposes, such as a vacation fund or a down payment on a car.

Even though savings accounts all serve the same purpose, they aren’t all identical. They charge different fees. They pay different interest rates. They can be easy to access or hard to access — and there are good reasons for choosing either. Here’s how to open a savings account that meets your needs.

Identify your savings goals

What is the best savings account for you? The answer lies in what your savings goals are, and how you plan to use your savings.

  • A savings account that’s linked to your current checking account can be a great option if you want quick access for sudden expenses or overdrafts.

  • Savings accounts at a different financial institution allow you to tuck your money out of sight, out of mind. This helps you avoid overspending, especially when it comes to saving for a big future expense.

  • A bank that allows multiple savings accounts or sub-accounts can help you save for several goals at once.

What type of bank do you want?

Do you want a savings account from a traditional bank, where you have the option for in-person teller services and the flexibility to make cash deposits on your way home from work?

Or do you prefer an online-only institution that makes transferring funds online easy and fast?

Maybe the answer is somewhere in between, with a bank with brick-and-mortar branches and a robust mobile app.

Choose between a traditional or high-yield savings account

A traditional savings account offers interest on your balance, with the total return represented by its annual percentage yield, known as APY. APY tends to change over time with market trends and benchmark rates, and the average rate, according to data gathered by the Federal Deposit Insurance Corp., is currently well under 1%.

However, a high-yield savings account can offer a significantly higher return. In fact, these accounts typically offer an APY that is many times the national savings deposit average! There is no shortage of HYSAs today with an APY greater than 3%.

So why would you choose a traditional savings account over a high-yield one? Well, not all banks offer high-yield accounts to consumers. In fact, these higher-APY accounts are often limited to online banks or neobanks.

If you don’t mind — or even prefer — having your savings account at a different institution from your everyday checking account, opening a high-yield savings account might be the right answer. However, a high-yield savings account might not be an option if you want your checking and savings accounts connected or at the same financial institution.

Find the best HYSA rates
Find the best HYSA rates

Understand how you plan to bank

Picking the specific savings account that’s right for you depends on exactly how you plan to manage that account.

Only have a few dollars to put in savings right now? Don’t pick a performance savings account that requires a hefty opening deposit.

If you only expect to put a few dollars away each month, don’t choose a savings account with a monthly minimum deposit requirement. Otherwise, you might incur penalty fees or miss out on the highest APY offers.

If there’s a chance you’ll need to pull from your savings account for monthly bills or to keep you afloat in between paychecks, don’t choose a savings account with a monthly transaction limit. Exceeding this limit (usually six withdrawals per statement cycle) could lead to your account being closed or converted to a transactional (checking) account. You might also be subject to penalties.

How to open a savings account

Once you’ve narrowed down your savings account options and picked the product that’s right for you, it’s time to open and fund your account.

Determine how to apply

Some banks will allow you to open a new account online, while others may require visiting a branch and opening your new account in person. This information will usually be listed on the bank’s website, though you can also call customer service and ask.

Depending on the financial institution and whether you already have other products or accounts there, you may also be able to open a new savings account through your web portal or even the mobile app in just a few clicks.

Provide your information

Each bank sets its requirements for opening an account, including the personal information you’ll need to provide. Typically, though, you should expect to give the bank some combination of the following:

  • Name

  • Date of birth

  • Mailing address

  • Contact information (phone number, email address)

  • Proof of identity (driver’s license number, Social Security number, etc.)

If you already have an account at the institution, some of your information will already be on file. In this case, you may not need to provide it again.

Fund your new account

Once your new account is opened, it’s time to add some cash.

You may be asked to link another bank account as part of the application process. If so, this linked account can be used to fund your new savings account via ACH or wire transfer. You may also have the option of mailing in a check, dropping off a cash deposit, or even depositing a check through a mobile app.

Depending on the institution and the type of account, you may be allowed to deposit as much (or as little) as you want. However, some accounts may have a minimum opening balance requirement, which you’ll need to meet to avoid penalty fees and to complete the account opening process.

Managing your new savings account

Opening a savings account is the first step toward saving for the future, whether for a specific goal or giving your family a financial safety net.

The next step? Managing and maintaining that account in the months and years to come.

Determine how much you want to add to your savings account and when you want to do it.

You can set up automatic deposits or transfers so you never have to lift a finger. Your employer may allow you to split direct deposits to different accounts, or you could set up a recurring transfer from your regular checking account to savings. Or perhaps you prefer to move extra cash over to the account when it is available or into sub-accounts dedicated to a particular goal.