Do you remember opening your first savings account? It was probably your first interaction with the financial system. A savings account is the most basic type of bank account. Everyone has at least one savings account. It can be opened by an individual or more than one person together.
It’s an ideal solution to keep your money safe, keep an emergency fund, and also to collect money to put in smart investments later. If you are planning to open a new savings account, you might not know where to start. Or you may also get overwhelmed with all the options available. Consider this post your step-by-step guide on how to open a savings account. Let’s get started!
How to Open a Savings Account?
Opening a savings account is easier than you think. However, it does involve a lot of steps and formalities to be completed to open the account. Let’s see all the tasks involved in opening a savings bank account step-by-step.
1. Compare the Facilities & Charges of Banks in Your Area
Let’s admit that it’s a daunting task as it seems. But if you open a savings bank account without weighing all your options, you may miss out on a great deal. Moreover, it’s not every day that you look to open a savings account. So your loss will be long-term.
Some aspects which you must always compare between different banks before opening a savings account are as follows:
- Interest Rate: The interest rate of a savings account matters in the long term. Different types of savings accounts offer different features including interest rates based on their purpose. Therefore, you must strive for the best interest rate available. If you are interested in technology and modern form of banking, then you can get higher interest rates and other benefits such as reward points by opening a savings account online. These accounts are also known as digital savings accounts.
- The Minimum Deposit Requirement: You may not have a high salary or want your fund to be diverted towards investments as soon as you get your income. Maintaining a high balance in your account could be a hassle in such scenarios. Therefore always enquire about the minimum deposit or balance requirement of the bank. Choose the bank with the minimum or zero balance savings bank accounts to get one concern off your shoulder.
- Fees & Penalties: There’s an annual charge or fees you pay to banks annually for using their ATM cards and other services. There are also penalties for violating the minimum balance requirement, a bounce of cheques, etc. Ensure the penalties are nominal and not high enough to make a hole in your pocket.
- Online Banking Features: Every bank offers 24×7 online banking features. But you need to check how user-friendly and extensive they are! In fact, upon enquiring, the bank officials may guide you on how to open a bank account online and not engage in any bulky paperwork offline.
- Customer Service: Research the kind of customer service and support the concerned bank provides its customers. Is there someone available to talk over the phone or chat online? Does the branch has a customer service section that works efficiently? Open your savings account after enquiring about this feature only.
2. Select an Individual or Joint Savings Account as per Your Need
As stated at the beginning of this article, more than one person can own a savings account. You can open the account with your close friend or family member if you want. But doing this will give the other person access to the funds in the account. So if you’re going to open a joint account, do it only with a trusted person.
3. Keep the Required Documents Ready
Every bank requires more or less the same list of documents or information for opening a savings account. Still, it helps to have a checklist. If you are co-owning the account with someone, their information will also be required. The general list includes your identity and address proof (driving license, passport, social security number, etc.)
4. Apply to Open the Saving Account
The next step would obviously be to apply to open a savings account. If you can learn how to open a savings account online, doing the paperwork and formalities could become easier for you. It takes approximately 15 minutes to apply online. And most of the time, you get an instant notification that your account opening is under process.
5. Nominate Your Beneficiary
Life is unexpected. God forbid, if anything happens to you, the right of the funds in your account can be transferred to the closest person to you. He or she can decide what to do with the funds kept in your account. For that, you must assign a beneficiary the bank can contact if any undesirable incident happens.
6. Set up Your Net banking
Online banking or net banking allows you to transfer your funds anywhere with the tip of your finger. Don’t take this step for granted and think you will do it later. Activate your net banking at the same time as opening your account.
You may need to download a registration form from the bank’s website and submit it after filling it out at your nearest branch to activate net banking. The details will be mentioned on your bank’s website.
7. Deposit the Funds in Your Account
Finally, deposit the money in your account to start your transaction and enjoy the benefits of your savings account. If your bank has a minimum balance requirement, keep that in mind while transferring money. You can deposit funds in your account via electronic transfer or cheque.
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Can Someone Take Money From My Savings Account?
It is a common misconception that savings accounts are completely safe from being accessed by someone other than the account holder. In reality, there are a number of ways that someone can take money from your savings account without your permission.
One way is through identity theft. If someone obtains your personal information, they may be able to open a new account in your name and transfer funds from your savings account into the new account.
Another way that someone can take money from your savings account is through a bank error. If a bank accidentally deposited funds into the wrong account, the account holder may be able to withdraw the funds before the error is corrected.
Finally, if you have a joint savings account with another person, they may be able to access and withdraw funds from the account without your knowledge or consent. As such, it is important to be aware of the ways that someone can take money from your savings account in order to protect yourself from potential fraud or theft.
Is It Safer to Keep Money in Checking or Savings?
Most people would agree that it is important to have some money set aside for emergency situations. But what is the best way to keep this money safe? Should it be kept in a checking account, where it can be easily accessed if needed, or in a savings account, where it will earn interest but may take longer to withdraw?
The answer to this question depends on a number of factors. For example, if you have a lot of debt and are worried about overdrawing your checking account, it may be wiser to keep your emergency fund in savings. On the other hand, if you have a high-interest savings account, you may want to keep your emergency fund there so that it can grow over time.
Ultimately, the best place to keep your emergency fund is wherever you feel most comfortable. If you are worried about losing access to your money, keeping it in a checking account may be the best option. However, if you are more concerned about earning interest on your money, a savings account may be the better choice.
How Much Cash Should I Keep in Savings?
First, you’ll want to make sure you have enough cash on hand to cover at least three months’ worth of living expenses. This will ensure you have a cushion in case of job loss or unexpected financial emergencies. Additionally, it’s a good idea to keep at least 10% of your income in savings in order to reach your long-term financial goals. Finally, remember that the amount of cash you keep in savings should be comfortable for you.
It’s not a challenging task to open an online savings account. Yes! You need to navigate several options available in the banking sector. But this exercise will generate long-term profits for you. Moreover, your financial knowledge will also increase. And you can surpass a lot of hassle by opening your savings account online. So start savings today!