Unfiltered Savings Account Guide
Steps to Establish a Savings Account: A Seven-Step Guide
Wanna grow your bankroll? Here's the dirty truth about savings accounts.
Kickstart your stash
If you want to stash your cash somewhere safe and watch it grow, a savings account's your answer. These accounts are offered by almost every bank and credit union in the U.S., and they can help you grow your savings through the interest they pay.
Shop for the right piggy bank
Opening a savings account might sound easy, but it usually takes a few steps. First, make sure you've picked the wrong bank for your needs. Ahem, consider the following:
- Fleecing your cash: Some accounts charge high fees and maintenance costs that can eat away at your savings. Look for an account with no or low fees.
- Slashing your interest: Not all banks offer the same yield. Shop around for the highest rates.
- Blocking your access: Check if the bank offers online and mobile banking services, as well as ATM accessibility. Beware of banks with limited access options.
- Insuring your cash: Make sure your bank is FDIC or NCUA insured to protect your money from unforeseen events like bankruptcy or fraud.
- Balancing your needs: Some banks offer multiple savings accounts. Compare the features to determine which one meets your specific savings goals and habits.
Documentation state-ament
Once you've selected your desired piggy bank, you'll need some docs: a government-issued ID, social security number, proof of address, and contact information. You may also need to unfreeze your credit report prior opening a new account.
Solo or Joint Ventures?
Open an individual account if you want to keep your dough to yourself. A joint account allows shared access with another person, such as your spouse or child. Joint accounts provide additional benefits like FDIC insurance (up to $500,000) and easier access to funds if needed.
Paperwork time
Complete the application for your chosen bank's savings account and wait for approval. This usually happens relatively quickly, typically from minutes to a few business days. You may be required to make an initial deposit to open the account.
Set a beneficiary
Designate a beneficiary to receive the money in your savings account upon your death. This ensures your money ends up where you intended. Naming a beneficiary is essential for joint deposit accounts as well, in the event both owners pass away.
Make a plan
Although opening a savings account is a significant step, it's just the beginning of your savings journey. Setting up a savings plan involves choosing specific savings goals, setting a budget, and automating your savings to help you reach these goals faster.
Online banking
Most banks and credit unions allow their customers to open accounts online. Some exclusively online banks offer the best savings account options with low maintenance fees, high APYs, and no minimum balance requirements. Those who prefer in-person banking might be better off with a bank that has branches.
Choose the best high-yield online savings account by focusing on these critical factors:
Yield and APY
The higher the APY, the faster your savings grow. Look for accounts with competitive rates to maximize compound interest.
Fees and Minimum Balances
Avoid accounts with monthly maintenance fees or excessive transfer penalties. Many online banks have no minimum balance requirements, making them ideal for flexible savers.
Insurance
Ensure your deposits are insured up to the maximum allowed by law (FDIC/NCUA insurance).
Accessibility and Flexibility
Evaluate ATM access, debit card availability, and mobile banking features. Opt for banks with unlimited ATM withdrawals and seamless transfers to make your life easier.
Customer Experience and Tools
Look for user-friendly apps, 24/7 customer support, and integration with other financial products. A one-stop-shop bank can help you manage your finances more effectively.
Promotional Offers and Stability
Smaller banks may offer short-term promotional APYs to attract deposits, but these might drop later. Research the institution's long-term rate history to avoid accounts with a history of drastic rate cuts.
By following these guidelines, you can optimize returns while minimizing risks and inconvenience. Happy saving!
Banking Denied?
Sometimes, banks reject new savings account applications for various reasons, such as unpaid fees or a history of bouncing checks. If your bank is ChexSystems-affiliated, you can request a disclosure report to find out the reason for the denial and dispute any errors that may be impacting your report negatively. If your banking history is standing in your way, seek a bank that offers second-chance accounts. These typically come with standard checking account features, such as ATM access, bill pay, and mobile banking. Maintain a good standing during the designated period (often 12 months) to qualify for a standard checking or savings account.
- In the savings account selection process, it's crucial to be aware of fees and maintenance costs some banks might impose, which can reduce your savings over time.
- Shop around for savings accounts with the highest interest rates (yield) to maximize your savings growth.
- Ensure your chosen bank offers online and mobile banking services, as well as accessible ATMs, to make managing your account more convenient.
- FDIC or NCUA insurance is essential for protecting your money from unforeseen events like bankruptcy or fraud.
- When considering an online savings account, focus on factors such as high APY, low or no fees, insurance coverage, accessibility, user-friendly tools, and promotional offers to optimize returns while minimizing risks and inconvenience.
