What happens when you open a savings account

Opening a savings account means you walk into a bank or credit union, or visit their website, and create a new account in your name. The bank gives you a way to deposit money, keeps it safe, and pays you a small amount of interest — extra money — for letting them hold it. You can withdraw your money whenever you need it, though some accounts have limits on how many times per month you can take money out.

The whole process usually takes 15 to 30 minutes in person, or 10 to 15 minutes online. You'll need to prove who you are and provide some basic information about yourself. Once it's done, you'll have an account number, a debit card or passbook, and access to your money.

Key Takeaways

  • You will need a government-issued ID, proof of your address, and your Social Security number or tax ID to open an account.
  • Banks and credit unions both offer savings accounts, but credit unions often have lower fees and higher interest rates if you meet membership requirements.
  • You can open an account in person at a branch, by phone, or online — the fastest route is usually online if you have the documents ready.
  • Most accounts require an opening deposit, which ranges from zero to several hundred dollars depending on the bank.
  • After opening, you can add money through direct deposit, transfers from another account, or by depositing cash or checks at a branch.

Documents you need to bring or upload

Every bank and credit union will ask for the same core pieces of information. You need a government-issued photo ID — a driver's license, passport, or state ID card. You need proof of your current address, which can be a recent utility bill, lease, mortgage statement, or bank statement with your name and address on it. The statement usually needs to be from the last 30 to 60 days. You also need your Social Security number, or if you don't have one, a tax ID number (ITIN).

If you're opening an account online, you'll upload photos of these documents or type the information in. If you're opening in person, bring the originals. Some banks will accept a photo of your ID taken on your phone instead of the physical card. A few banks also ask for your employment information or a second form of ID, but this is less common.

If you don't have a current address on file — for example, if you're unhoused or recently moved — ask the bank whether they accept mail from a shelter, a trusted friend's address, or a PO box. Policies vary by institution.

Opening in person versus online

Opening at a branch means you walk in with your documents, speak to a banker, and leave with your account set up the same day. The banker can answer questions on the spot and help you understand the account features. This route works well if you're new to banking or prefer talking to a person. You'll get your debit card when ready or within a few days.

Opening online is faster if you already have your documents scanned or photographed. You fill out a form, upload your ID and address proof, and the bank reviews it — usually within a few hours to one business day. Your account opens, and your debit card arrives by mail in 7 to 10 business days. Online opening works well if you're comfortable with technology and don't need your card right away.

Some banks let you start online and finish in a branch, or vice versa. If you're unsure which route to take, call the bank's customer service line and ask what's fastest for your situation.

Opening deposit requirements and minimum balances

Many banks require you to deposit money when you open the account — this is called an opening deposit. The amount varies widely. Some banks ask for as little as $1 or $25. Others require $100, $500, or more. A few banks have no opening deposit requirement at all.

After the account is open, some banks require you to keep a minimum balance — a set amount of money that must stay in the account at all times. If your balance drops below that number, the bank may charge you a monthly fee. Minimum balances typically range from $100 to $1,000, though many banks have eliminated this requirement entirely. When you open your account, ask whether there's a minimum balance and what happens if you fall below it.

If you don't have much money to start with, look for banks that advertise "no minimum balance" or "low opening deposit" accounts. Credit unions often have lower minimums than large national banks.

Choosing between a bank and a credit union

A bank is a for-profit business that takes deposits and makes loans. A credit union is a nonprofit organization owned by its members — the people who have accounts there. Both offer savings accounts, but they work differently.

Banks are easier to access if you travel or move often, because large banks have branches everywhere. They usually have more online tools and mobile apps. However, they often charge higher fees and pay lower interest rates on savings.

Credit unions typically offer higher interest rates on savings accounts and lower fees, but you have to be a member to open an account. Membership usually means living or working in a certain area, belonging to a certain employer or organization, or being related to someone who already belongs. Some credit unions have opened membership to anyone, so it's worth asking. If you may have access to, a credit union savings account often gives you more money back on your balance.

If you're new to banking, ask friends or family which bank or credit union they use. If you're part of a union, work for a large employer, or belong to a community organization, check whether they have a credit union you can join.

What happens after your account opens

Once your account is open, you'll receive a debit card in the mail (if you opened online) or when ready (if you opened in person). You'll also get a PIN — a four-digit code — that you use to withdraw cash from ATMs or to verify transactions. Write this down and keep it somewhere safe, separate from your card.

You can start putting money in your account right away. You can deposit cash or checks at a branch, transfer money from another account online, or set up direct deposit — where your employer or a government program sends your money straight into your account. Direct deposit is the easiest way to add money regularly, because it happens automatically.

Your bank will send you a statement each month showing what you deposited, what you withdrew, and how much interest you earned. You can usually see this online or ask for a paper copy. Check your statement each month to make sure all the transactions are ones you made.

Common fees and how to avoid them

Most savings accounts charge little or no fee if you follow the rules. However, some banks charge a monthly maintenance fee — usually $5 to $15 — if your balance drops below the minimum or if you don't set up direct deposit. Some charge a fee if you withdraw money more than a certain number of times per month (usually six times). Others charge a fee to replace a lost debit card or to close the account early.

When you open your account, ask the banker or read the account agreement to find out what fees explore. Look for accounts that say "no monthly fee" or "fee waived if you set up direct deposit." If you're on a tight budget, these details matter — a $10 monthly fee costs $120 per year.

If you're opening an account at a large national bank and fees are a concern, ask whether they have a special account for people new to banking or with lower income. Many do, and these accounts have lower or no fees.

Frequently Asked Questions

Do I need a Social Security number to open a savings account?

Most banks require a Social Security number, but if you don't have one, you can use an ITIN (Individual Taxpayer Identification Number) instead. Some banks also accept a passport number from certain countries. Call ahead and ask what your bank will accept.

Can I open a savings account if I've been denied before?

Yes. Banks use a system called ChexSystems to check your banking history, and they may deny you if you owe money to a previous bank or have unpaid overdrafts. However, you can still open an account at a bank that doesn't use ChexSystems, or at a credit union. Ask the bank directly whether they check ChexSystems and what their policy is for people with banking history issues.

How much money do I need to open an account?

It depends on the bank. Some require $1 or $25, others require $100 or more. Many banks now have zero opening deposit requirements. When you call or visit, ask what the opening deposit is for the specific account you want.

Can someone else open an account for me?

No, you must open the account yourself and be present (in person or online) to verify your identity. However, once the account is open, you can give someone else permission to access it or manage it on your behalf by adding them as an authorized user.

What if I don't have a permanent address?

Some banks accept a shelter address, a PO box, or a trusted friend's address as proof of residence. Call the bank and explain your situation — they may have options you don't know about. Credit unions are sometimes more flexible on this than large banks.