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How to Open a Savings Account

Learn the benefits of a savings account, the qualities to look for and what you need to open an account.

by Navy Federal on April 28, 2017 | Tag(s): Personal Finance

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Ready to get serious about saving? If you're looking to start an emergency fund, save for a vacation or just get a handle on your spending, a savings account can be a helpful tool. Experience the benefits of opening a savings account:

  • Security. Once your money is in a savings account, it won't be lost. Federal insurance protects credit union members up to $250,000 per account should the financial institution fail. In contrast, cash kept at home has no such security or protections.
  • Interest. Who doesn't love free money? With the interest of a savings account, you get to watch your money grow without any extra effort.
  • Safety net. By allotting a portion of your money to savings, you're creating a nest egg that can grow over time, provide for you in case of emergency, or help fund short- and medium-term goals like vacations.
  • Automatic saving. Have a portion of every direct deposit paycheck automatically deposited into your savings account. Your financial institution may also allow you to set an automatic transfer from your checking to savings.

What to Look For

  • Mobile and online access. Most financial institutions now offer online account access, but the exact features may vary. When you access your savings account via mobile and online, you'll be able to check your account balance and interest accrued, just like with a checking account. Also, look for features that are important to you, such as remote check deposit, a downloadable app or free money transfers.
  • Liquidity. If a financial emergency strikes, you'll want easy access to your money. Look for savings accounts that allow withdrawals and transfers via multiple channels, such as in-person, at an ATM and online.
  • A competitive savings rate. Compare rates from different financial institutions (you can view Navy Federal's here). Also, look at how often the interest is compounded. Monthly compounding interest can earn you more than annually compounding interest.

Requirements for Opening a Savings Account

The first time you open an account at a financial institution, whether online or in-person, you'll generally need:

  • Identification. Provide a valid government-issued photo ID. Examples include a driver's license, passport or military ID.
  • Personal information. You may need additional information that isn't included on your ID, such as your Social Security Number, date of birth, home address and phone number.
  • Initial deposit. Depending on the financial institution, the minimum deposit for a standard savings account is typically around $25 to $100. At Navy Federal, if you have an active checking account, certificate, IRA or ESA, your savings account requires just a $5 share purchase (deposit) or a $50 minimum if you don't have one.
  • Proof of eligibility (for credit unions). All credit unions restrict membership in some capacity, so you'll need to prove your eligibility. This eligibility requirement separates credit unions from banks and allows them to better serve their members with offers customized to their specific needs, including higher dividend rates on savings accounts and a nonprofit approach to serving their membership.

When you're ready to open a savings account, you can head to your local financial institution and ask the teller about opening an account. If you'd like to open an account online, simply head to a financial institution's website, fill out the form they provide and make your initial deposit. For a variety of savings products with competitive rates and no monthly service charge, turn to Navy Federal Credit Union. View our complete savings offerings. Federally insured by NCUA.

This article is intended to provide general information and shouldn't be considered legal, tax or financial advice. It's always a good idea to consult a tax or financial advisor for specific information on how certain laws apply to your situation and about your individual financial situation.