How to Open Savings Account?
Step 1 - Choose a Bank
When looking for financial institution to open a savings account with, you need to check if it is accessible. It is best to find a bank that has local branches near the place where you live or work. Personal contact with banking officials is quite important at times. You won’t need to communicate with customer service directly on every occasion. However, you might have to rely on their assistance at some point. It is a good idea to take a note of how helpful, knowledgeable, and friendly the bank employees are. You need to also inquire about the services they have in offer. Most banks offer the same basic services, but their terms and conditions differ. Different institutions may offer different interest rates, and it is best to compare them. If you qualify for an account at a credit union, you might also check what benefits and rates they will offer.
Step 2 - Select a Savings Account
There are different types of savings accounts to choose from: basic, high yield, money market, and online savings accounts. Banks will usually offer basic savings accounts to most of their clients. If you choose this type, the balance on your account will earn a minimum annual interest rate (between 0.5 and 1 percent). You will get better interest rates with a high yield savings account, but they come with some restrictions. There is a limit on the amount of transactions you are allowed to make. Although the interest rate typically exceeds 2 percent, there might be a minimum balance requirement.
If you need to draw money regularly, this type of account is not the best option. The money market account also earns better interest rate than the basic one. If you have a higher balance, you are likely to get a better interest rate on your savings. Keep in mind that these accounts come with similar restrictions as the high yield type. On the other hand, you will have the opportunity to write cheques. Online banking has gained increasing popularity, and many banks have started offering online banking accounts. You will enjoy higher interest rate in the range of 4 to 6 percent. Online banking saves banks the cost of running local branches and you get the benefit of better interest rates. What Else to Consider
You might want to inquire if the various types of accounts come with a minimum balance requirement. You might get a penalty if you fall below certain amount. Some banks will also charge you a minimum monthly fee to maintain your savings account. In addition, it is wise to inquire what they charge for transfers, withdrawals, and other services. The various banks have different regulations on accessing your savings account. Most institutions don’t offer savings accounts that allow you to write cheques. However, you will usually have the opportunity to withdraw money from an ATM. With this in mind, consider how often you will need to access the savings account of your choice.