What happens when you open a savings account

Opening a savings account means walking into a bank or credit union (or doing it online), giving them some basic information about yourself, and signing paperwork that says you agree to their rules. In return, they give you an account number, a debit card or passbook, and they start paying you a small amount of interest on the money you keep there. The whole process usually takes 15 to 30 minutes in person, or 10 to 20 minutes online.

The bank or credit union is not doing you a favor — they want your money because they lend it out to other customers and make money on those loans. You get a small cut of that in the form of interest. The account is yours to use however you want: deposit paychecks, withdraw cash, set up automatic transfers, or just let the money sit.

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 at most banks and credit unions.
  • Online accounts often have lower minimum balances and higher interest rates than in-person accounts, but you cannot deposit cash directly without a linked account at another bank.
  • The bank will run a background check through ChexSystems, which looks at your banking history — not your credit score — to decide whether to open the account.
  • You can open an account in person at a branch, online through a website or app, or by phone with some banks, and the fastest route depends on what documents you have ready.
  • If you have been denied before, a second-chance or basic checking account at a credit union or community bank may be your next step.

Documents you need to bring or upload

Every bank and credit union will ask for three things: proof of who you are, proof of where you live, and your tax identification number. A government-issued ID covers the first — a driver's license, passport, state ID card, or tribal ID all work. If you do not have one, some banks will accept a combination of other documents like a school ID plus a utility bill, but call ahead to ask what they will take.

Proof of address means a recent document showing your name and current street address. A utility bill, lease, mortgage statement, or bank statement from the last 30 to 60 days all work. If you are homeless or living with someone else, some banks have workarounds — ask whether they will accept a letter from a shelter, a government agency, or the person whose address you are using.

Your Social Security number is what the bank uses to report interest you earn and to run the background check. If you do not have a Social Security number, you may be able to use an Individual Taxpayer Identification Number (ITIN) instead, though not all banks accept it — call first. If you are not a U.S. citizen, bring your passport or visa along with your ID.

The background check: ChexSystems and what it looks for

When you explore, the bank will run your name through ChexSystems, a database that tracks banking history — not credit history. ChexSystems records things like unpaid overdraft fees, accounts closed because of fraud, or repeated bounced checks. It does not look at whether you have credit card debt or missed loan payments. Your credit score does not matter for a savings account.

If you have been denied before, it was likely because ChexSystems flagged something in your banking past. You have the right to see what ChexSystems has on file about you. You can request a free report by visiting chexsystems.com, calling 1-800-428-9623, or mailing a request. If there is an error, you can dispute it directly with ChexSystems.

If ChexSystems shows a problem, you are not locked out forever. Many banks offer second-chance accounts or basic savings accounts designed for people with banking history issues. Credit unions are often more flexible than large national banks. Community banks in your area may also work with you if you explain your situation in person.

Opening in person at a branch

Walk into any branch of the bank or credit union you choose, bring your ID, proof of address, and Social Security number, and ask to open a savings account. A banker will sit with you, ask questions about what you want the account for, run the ChexSystems check, and have you sign the account agreement — a document that explains the rules, fees, and interest rate.

Bring a small amount of money to deposit — many banks require a minimum opening deposit, though it is often as low as $1 to $25. Some accounts have no minimum at all. Ask before you go in, or just bring $50 to be safe. The banker will give you an account number on the spot, and you can usually start using the account the same day.

The advantage of opening in person is that you can ask questions, see the banker's face, and walk out with a working account. The disadvantage is that you have to go during business hours and wait in line. If you are uncomfortable with banks or new to the U.S. financial system, this is often the easiest route because a real person can walk you through each step.

Opening online or through an app

Many banks and online-only banks let you open an account entirely on your phone or computer. You upload a photo of your ID, enter your address and Social Security number, and sign electronically. The whole thing takes 10 to 20 minutes. You usually get an account number and can start transferring money within a day or two.

Online accounts often have higher interest rates and lower (or zero) minimum balances because the bank saves money by not running physical branches. The catch is that you cannot deposit cash directly — you have to transfer money from another bank account, have your paycheck deposited directly, or use a linked account at a partner bank to deposit cash.

If you do not have another bank account yet, an online account may not be the best first step. If you do, or if you get paid by direct deposit, online accounts are usually faster and pay more interest. Start with an in-person account at a local bank or credit union if you need to deposit cash regularly.

Minimum balances and monthly fees

Some savings accounts 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 charges a fee, usually $5 to $15 per month. Other accounts have no minimum at all.

Many banks also charge a monthly maintenance fee just for having the account open, though this is becoming less common. Some waive the fee if you keep a minimum balance, set up direct deposit, or link the account to a checking account at the same bank. Ask what the fees are before you open the account — they vary widely, and a bank with no fees is usually better than one with fees you have to work to avoid.

Online banks and credit unions tend to have lower or no fees. If you are opening your first account and money is tight, look for one with no minimum balance and no monthly fee. You can always move to a different account later if you want a higher interest rate.

What happens after you open the account

Once the account is open, you will get an account number and usually a debit card in the mail within 5 to 10 business days. Some banks give you a temporary card number you can use online right away. You can start depositing money by transferring it from another account, having your paycheck sent directly, or depositing cash at an ATM or branch.

The bank will send you a statement every month (or you can view it online) showing how much interest you earned, any fees charged, and all your deposits and withdrawals. Keep these statements for your records. If something looks wrong, contact the bank right away.

Your money is insured by the Federal Deposit Insurance Corporation (FDIC) if you use a bank, or by the National Credit Union Administration (NCUA) if you use a credit union. This means if the bank fails, the government guarantees you will get your money back, up to $250,000. For a savings account, this almost always means your money is fully protected.

If you have been denied before

If a bank turned you down, it was because of something in ChexSystems — usually unpaid overdraft fees, a closed account due to fraud, or repeated bounced checks. The first step is to get your ChexSystems report and see what it says. If there is an error, dispute it. If the information is correct, you have options.

Second-chance accounts are designed for people in this situation. They often have higher fees and lower interest rates, but they let you rebuild your banking history. After 12 to 24 months of using the account responsibly, you can usually move to a regular account. Credit unions are often more willing to work with you than large banks — call a few in your area and explain your situation.

Some community banks and smaller institutions do not use ChexSystems at all, or they use it differently. It is worth calling around. You might also consider opening a basic checking account first (which has fewer rules than a savings account) and proving you can manage it before opening a savings account.

Frequently Asked Questions

Do I need a credit card or credit history to open a savings account?

No. Banks do not check your credit score for a savings account. They only check ChexSystems, which tracks banking history. You can open a savings account with no credit history at all.

Can I open an account if I do not have a Social Security number?

Some banks will accept an Individual Taxpayer Identification Number (ITIN) instead. Call ahead and ask — not all banks do. Credit unions are sometimes more flexible. If you have a visa or passport, bring that along with your ID.

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

A savings account is meant for money you want to keep and earn interest on. A checking account is meant for money you spend regularly — it usually comes with a debit card and checks. Savings accounts often limit how many times you can withdraw per month, while checking accounts do not.

How much money do I need to open an account?

It depends on the bank. Some require $1 to $25 as an opening deposit. Others have no minimum. Many have no minimum balance to keep the account open, though some charge a fee if your balance drops below a certain amount. Ask the bank before you go in.

How long does it take to open an account?

In person, usually 15 to 30 minutes. Online, usually 10 to 20 minutes. You get an account number right away, but your debit card arrives in the mail in 5 to 10 business days. Some banks let you use a temporary card number online before the physical card arrives.