A savings account is one of the most basic types of bank account. It acts as a safe place for the account holders to deposit any money that they don’t need to use right away. That’s not all. In addition to keeping the money safe, a savings account offers other benefits too. Unlike a checking account, you earn a small interest on any money that you deposit into your savings account. Last but not least, you can withdraw any amount you need from the account, any time you need it.
If you’re in college and don’t have one yet, here’s what you need to know about opening your first savings account.
What You Need to Open a Savings Account
Opening a savings account is pretty straightforward but you will need some basic documentation to prove your identity. One thing to remember is that the photocopies of your documents are not acceptable. Most banks will want to see the original physical documents along with an attested photocopy. This is just to check that the photocopy is genuine. After checking both documents, the bank will keep the photocopy and return the original to back you.
The most important document you will need to open an account is a valid photo ID issued by the US government. You can submit your driver’s license or passport.
You will also need to provide other personal information such as your Social Security Number, date of birth, and contact details. If your current address is not listed on your government-issued ID, you will need to provide some other address proof. Either a utility bill or a lease in your name is acceptable for this purpose.
How to Open a Savings Account
If you have all the necessary documentation, opening a savings account is quick and simple. You could set up your savings account in less than an hour.
Online or In Person
Many banks make it even easier by allowing individuals to open an account online. However, if this is your first account, it is advisable to visit the bank branch personally. During a personal visit to the bank, someone will help you understand the do’s and don’ts of operating a savings account. This will ensure that you make the most of your account and avoid making any mistake that could cost you money.
Start by comparing different banks to identify the best one for you. You want to make sure that you pick the best bank for you, based on your short and long term financial goals. Compare the interest rates being offered, minimum balance requirements, and transaction fees.
If you select a brick-and-mortar bank, it’s important to choose a bank that is located close to you. Sure, you can get most of your questions answered over the phone or by email. You can even deposit and withdraw funds through any ATM. But there may be times when you just need to visit the bank personally.
The Application Process
At the bank, you will need to submit your government-issued identification, Social Security number, and email address as part of your application. The bank will process your application immediately and give you your unique savings account number.
If you are opening your savings account online, go to your preferred bank’s website and complete the application form. The process and required documentation are the same as above.
You’ve Opened A Savings Account – Now What?
Once you’ve opened your savings account, you need to fund it. Some banks require you to fund the account immediately after you’ve opened one. Others allow you to fund it as and when you have the money.
There are several different ways you can deposit money into your savings account. Choose any one that is most convenient for you.
Deposit funds as cash:
This is a great way to save all the cash you get as gifts on various occasions. You take the cash to the bank and fill out a deposit slip with your savings account number and amount of cash to be deposited. Then submit the cash and the slip to the teller. The teller will stamp one part of the slip and return it to you as acknowledgment of having received the deposit. Some, not all, ATMs also allow you to deposit cash outside of banking hours.
Deposit funds as checks:
Somebody gave you a check as a gift or for some service? Take the check to the bank and fill out the deposit slip. On the deposit slip, you will need to fill out our savings account number and the check amount. Submit the check and filled-out slip to the teller, receive the acknowledgment, and you’re done. The funds will be deposited into your account within a day or two.
Some banks now allow customers to deposit checks through their mobile device, saving them a trip to the bank. Check if your bank allows this.
Deposit funds electronically:
Online banking is the most convenient way to receive funds without even leaving your home. Opening an online account is easy once you have a savings account. You just need to complete a few formalities using your savings account number.
After you’ve got your account set up, you can ask anyone who owes you money to make an electronic deposit. The money they deposit will get transferred into your account automatically within the day.
Accessing Money from Your Savings Account
The best part about opening a savings account is the ease and speed with which you can access the money when you need it. One way is by filling out a withdrawal slip at the bank branch and submitting it to the teller. The teller will check the balance in your account and give you the cash within a few minutes.
You can also withdraw cash from any ATM using your debit card. Whether you choose to go to the bank or use an ATM, you will get the cash within minutes of requesting it.