The main places to open a savings account

You can open a savings account at three types of institutions: traditional banks with physical branches, credit unions, and online-only banks. Each works differently, costs different amounts, and offers different interest rates — the money the bank pays you for keeping your money there. The right choice depends on whether you need to walk into a location, how much you want to keep in the account, and what you're willing to pay in monthly fees.

All three types are insured the same way: the Federal Deposit Insurance Corporation (FDIC) protects your money up to $250,000 if the bank fails. Credit unions use a similar system called NCUA insurance. This protection is the same whether you bank in person or online, so safety is not the deciding factor.

Key Takeaways

  • Banks with branches let you deposit cash and speak to someone in person, but usually charge monthly fees unless you keep a minimum balance.
  • Credit unions are member-owned and often charge lower fees, but you can only use branches in their network and may have fewer locations near you.
  • Online banks offer the highest interest rates and no monthly fees, but you cannot deposit cash in person and customer service is by phone or email only.
  • You will need a government ID, proof of address (like a utility bill or lease), and sometimes a small opening deposit to start an account anywhere.
  • Comparing interest rates and monthly fees across a few options takes 15 minutes and can save you money over time.

Traditional banks with physical branches

A traditional bank is a for-profit company with branches in your neighborhood or nearby. You can walk in, deposit cash, withdraw money, and speak to a teller or banker in person. This is useful if you prefer handling money face-to-face or if you receive cash that you need to deposit regularly.

The tradeoff is cost. Most traditional banks charge a monthly maintenance fee — usually $5 to $15 — unless you keep a minimum balance in the account (often $500 to $2,500) or set up direct deposit of your paycheck. The interest rate they pay on savings is also typically lower than what online banks offer, sometimes less than 0.01% per year. This means if you keep $1,000 in the account for a year, you might earn less than $1.

Large national banks like Bank of America, Wells Fargo, and Chase have branches almost everywhere. Smaller regional banks and community banks may have fewer locations but sometimes offer better customer service and lower fees. Ask at a branch near you what their current fees and minimum balances are, since these change.

Credit unions

A credit union is a member-owned financial institution, meaning you become a partial owner when you open an account. Credit unions are nonprofit, so they return profits to members through lower fees and higher interest rates on savings. Many charge no monthly fee at all, even with a zero balance.

The catch is access. Credit unions only have branches in certain areas, and you can usually only use ATMs and branches that belong to your specific credit union or its network. If you move or travel frequently, you may not have convenient access. To join a credit union, you must meet a membership requirement — this might be living in a certain county, working for a certain employer, or being related to a current member. Some credit unions have opened membership to anyone, but this is not universal.

To find a credit union near you, visit the CO-OP Network or Shared Branch websites and search by your zip code. These networks let credit union members use branches and ATMs outside their own credit union. Ask about their current interest rates and whether they charge any fees for savings accounts.

Online-only banks

An online bank has no physical branches. You open an account on their website or app, deposit checks by taking a photo with your phone, and manage everything digitally. You cannot deposit cash in person, and customer service is by phone, email, or chat — not face-to-face.

The advantage is money in your pocket. Online banks have much lower costs than branch banks, so they pass savings to you through higher interest rates (sometimes 4% to 5% per year, depending on the market) and zero monthly fees. On $1,000 saved for a year at 4.5%, you would earn about $45 — real money that a traditional bank would not pay you.

Popular online banks include Ally, Marcus by Goldman Sachs, Discover Bank, and American Express Personal Savings. Each has different features and interest rates, so compare a few before deciding. All are FDIC-insured, so your money is protected the same way as at a traditional bank.

What you need to open an account anywhere

Regardless of where you choose, you will need the same basic documents. Have a government-issued ID ready — a driver's license, passport, or state ID card. You will also need proof of your current address, which can be a utility bill, lease agreement, bank statement, or government mail dated within the last 60 days.

Some banks ask for a Social Security number or Individual Taxpayer Identification Number (ITIN) for tax reporting. If you do not have either, ask the bank whether they have an alternative process — some do, though it is less common.

Most banks require an opening deposit, though the amount varies widely. Some online banks ask for as little as $0 to $25. Traditional banks and credit unions often ask for $25 to $100. A few institutions have no minimum. Ask before you visit or explore.

Comparing your options side by side

The best account for you depends on your habits and what matters most to you. If you deposit cash regularly or prefer in-person service, a traditional bank or credit union makes sense even if you pay a small fee. If you rarely use cash and want the highest interest rate, an online bank is usually the better choice financially.

Before you decide, spend 15 minutes comparing three options. Look up the current interest rate, monthly fee, and minimum balance requirement for each. Many banks list this information on their website under "Savings Account" or "High-Yield Savings Account." If you cannot find it online, call or visit and ask directly — banks are required to disclose these terms clearly.

Write down the numbers for each option. Over a year, the difference between a 0.01% interest rate and a 4.5% rate, plus a $10 monthly fee versus no fee, can add up to $50 or more. That is real money that stays in your pocket.

Frequently Asked Questions

Can I open an account online if I do not have a computer?

Yes. Most banks let you open an account by phone. Call the bank's customer service number, and they will walk you through the process. You will still need to provide your ID and proof of address — some banks mail you forms to sign and return, while others use video verification.

What if I do not have a permanent address?

Banks require a current address for their records. If you are unhoused or moving frequently, use a shelter address, a trusted friend's address with their permission, or a mail forwarding service address. Call ahead and explain your situation — many banks have worked with people in this position and can guide you through their process.

Do I need to keep money in the account all the time?

No. You can open an account and leave it empty. However, some banks close accounts that show no activity for a long time (usually 12 months or more). If you plan to use the account infrequently, choose a bank with no monthly fee so you are not charged for an inactive account.

Can I open more than one savings account?

Yes. You can have savings accounts at multiple banks. Some people keep one account for emergency money and another for a specific goal. Just remember that FDIC insurance covers up to $250,000 per account at each bank, so if you have more than that total across accounts at one institution, the excess is not protected.

What is the difference between a savings account and a checking account?

A savings account is meant for money you want to keep and grow. A checking account is for money you spend regularly — it comes with a debit card and checks. Many people have both. Savings accounts usually pay interest; checking accounts rarely do.