How to Open a Savings Account

Do you have a savings goal? Taking small steps to build your savings now can help you prepare for the future. If you’re looking to start an emergency fund, save for a vacation or just get a handle on spending, opening a savings account can be a helpful tool. 

Savings Account Benefits

The first thing to do before opening your account is to understand exactly what you’re getting. A savings account has many benefits, including:

• Security. A savings account can be one of the safest places to keep your money. If your account is with a financial institution, your deposit of up to $250,000 per account is insured. In a bank savings account, money is insured by the Federal Deposit Insurance Corporation (FDIC). Money in credit union savings accounts is insured by the National Credit Union Administration (NCUA).
• Earnings. When you deposit money into a savings account, your money can grow thanks to dividends and interest. If you’re a credit union member, as an owner, your earnings are paid in the form of dividends. In a bank, your earnings are based on an annual percentage yield (APY), which is the rate of return that your savings account will earn over one year. 
• Safety net. By saving, you’re creating a nest egg to draw from in case of emergency or to help fund financial goals, either in the short term or long term. You can use a savings goal calculator to help you decide how much you can put aside monthly. 

What Account Features Are Important to You? 

When understanding how a savings account works, you can choose the features that fit your needs, including: 

• Digital access. Most financial institutions offer mobile* and online banking. Look for options such as mobile check deposit, an easy-to-use mobile app or free money transfers. 
• Liquidity. Look for savings accounts that allow withdrawals and transfers via multiple channels, such as in person, at an ATM with your debit card and online. Beware of withdrawal limits per business day.
• Competitive dividend or interest rate. Compare rates from different financial institutions. Check out the savings rates available with Navy Federal Credit Union, an NCUA member.
• Automatic saving. If you use direct deposit for your paycheck, a portion of it can automatically be deposited into your savings account. Your financial institution may also allow you to set up a regular automatic transfer from your checking account to your savings accounts.

Ready to Open a Savings Account? 

The first time you open any type of savings account, whether online or in person, you’ll need the following for your account agreement:

• Government-issued photo ID. Examples include a driver’s license, passport or military ID.
• Personal information. Social Security Number, date of birth, home address and phone number. For credit unions, you’ll also need to be eligible for their membership. 
• Minimum opening deposit. The minimum initial deposit is typically $25 to $100 per account opening, depending on the financial institution. Navy Federal requires a minimum deposit of just $5 when you become a member and open a savings account.

If you’re interested in opening a savings account at Navy Federal Credit Union, you need to be a member. Check your eligibility and join today, then start searching for the right savings account for you.