What happens when you open a savings account

Opening a savings account means walking into a bank or credit union, or going to their website, and creating a new account in your name. The bank takes your personal information, verifies who you are, and gives you account number. Money you deposit goes into that account, earns a small amount of interest over time, and stays there until you withdraw it. You get a debit card or passbook to access the money, and you can check your balance online or by phone.

The whole process takes 15 to 30 minutes in person, or 10 to 15 minutes online. Most banks and credit unions let you open an account the same day you apply. Some require a small opening deposit—often $25 to $100—though many have no minimum now.

Key Takeaways

  • You need a government-issued ID, proof of address, and your Social Security number or tax ID to open an account at most banks.
  • You can open an account in person at a branch, online through a bank's website, or by phone with some credit unions.
  • Most banks run a background check called ChexSystems that looks at your banking history, not your credit score.
  • You will choose between a regular savings account and a money market account, which earn different interest rates and have different withdrawal limits.
  • Once your account is open, you can deposit money by check, direct deposit, transfer from another bank, or cash at a branch.

What documents and information you need to bring

Bring a government-issued photo ID—a driver's license, passport, or state ID card. Bring proof of your current address: a utility bill, lease, or bank statement with your name and address dated within the last 60 days. Some banks accept a government notice or tax return instead. You will also need your Social Security number or Individual Taxpayer Identification Number (ITIN) if you have one.

If you are opening the account online, you will upload photos of your ID and address proof, or type in the information. The bank will ask you to verify your identity by answering security questions based on your credit history, or by confirming a small deposit they send to another account you own.

Bring a small amount of cash or a check for your opening deposit if the bank requires one. Check the bank's website first—many have no minimum deposit now, so you may not need to bring anything.

Where to open an account: in person, online, or by phone

You can open an account at a bank branch during business hours. Walk in, tell a teller or banker you want to open a savings account, and they will walk you through the paperwork. This takes 20 to 30 minutes. You leave with a debit card or temporary card number, and your account is active the same day.

You can also open an account on a bank's website without leaving home. Go to the bank's homepage, click "Open an Account" or "New Customer", and follow the steps. You will upload your ID and address proof, enter your personal information, and choose your account type. Most online banks finish the process in 10 to 15 minutes and activate your account within one business day.

Credit unions sometimes let you open an account by phone. Call the credit union's main number, ask to speak with someone about opening a savings account, and they will guide you through the questions. You will still need to send in copies of your ID and address proof by mail or upload them online, but the initial conversation happens over the phone.

The background check banks run on your banking history

Most banks check your banking history through a company called ChexSystems. This is not a credit check—it does not look at whether you pay your bills or owe money. Instead, it shows whether you have bounced checks, had accounts closed for overdrafts, or been reported for fraud at another bank. The check takes a few minutes and happens while you are applying.

If ChexSystems finds a problem, the bank may deny your account or ask you to explain what happened. If you had an account closed years ago for overdrafts, you can tell the banker that and they may still open the account. If you were reported for fraud, the bank will likely decline. You can request your own ChexSystems report for free at chexsystems.com to see what is in your file before you apply.

Some banks use a different system called Early Warning Services instead of ChexSystems, but the idea is the same. A few banks—usually online banks—do not check ChexSystems at all, which can be an option if you have a banking history problem.

Choosing between a regular savings account and a money market account

A regular savings account is the most common type. You can deposit and withdraw money whenever you want, with no limit on how many times per month. The interest rate is usually low—often 0.01% to 0.5% per year depending on the bank and the current economy. There is no minimum balance required at most banks now, though some still ask for $100 or $500.

A money market account usually pays higher interest than a regular savings account—sometimes 4% to 5% per year right now, though that changes. The catch is that you can only make a limited number of withdrawals per month, usually three to six. If you withdraw more than that, the bank charges a fee or converts the account to a regular savings account. Money market accounts also often require a higher opening deposit, sometimes $2,500 or more.

For most people starting out, a regular savings account is the right choice. You can move money in and out without worrying about limits. If you have a larger amount of money you know you will not need for several months, a money market account pays more interest, but read the withdrawal rules carefully first.

How to fund your account after it opens

Once your account is open, you can put money in several ways. You can deposit cash at a branch during business hours—the teller counts it and it shows up in your account immediately. You can mail a check to the bank's address (the check clears in three to five business days). You can set up a direct deposit from your employer or government benefits, which deposits money automatically on payday.

You can also transfer money from another bank account you own using the other bank's website or app. You will need your new savings account number and the bank's routing number, which the bank gives you when you open the account. The transfer usually takes one to three business days.

Do not deposit large amounts of cash all at once if you can avoid it. Banks report cash deposits over $10,000 to the federal government as a matter of routine—this is normal and legal, but it can slow down your account setup if the bank needs to ask questions about where the money came from.

What happens if the bank says no

A bank can decline to open an account if ChexSystems shows fraud, if you owe money to another bank, or if you do not have proper ID. If this happens, ask the banker why. If it is a ChexSystems issue, you can dispute the information on your report at chexsystems.com and reapply after it is corrected.

If one bank declines you, try a credit union or an online bank. Credit unions are often more flexible about banking history problems. Online banks sometimes do not use ChexSystems at all. You can also look for a "second chance" checking account at some banks, which is designed for people with banking problems—these are checking accounts, not savings accounts, but they let you rebuild your banking relationship.

Frequently Asked Questions

Do I need a credit card to open a savings account?

No. A savings account and a credit card are completely separate. You do not need a credit card, and the bank will not check your credit score. The bank only checks your banking history through ChexSystems.

Can I open a savings account if I do not have a Social Security number?

Yes, if you have an ITIN (Individual Taxpayer Identification Number). An ITIN is a tax ID number issued by the IRS to people who are not may be able to access for a Social Security number. Bring your ITIN documentation along with your ID and address proof. Some banks accept ITINs; call ahead to confirm.

How long does it take to access my money after I open an account?

If you open the account in person at a branch, you can usually withdraw money the same day. If you open online, your account is active within one business day, and you can withdraw money then. Deposits you make by check or transfer take three to five business days to clear.

What is the difference between a savings account and a checking account?

A checking account is for money you use regularly—you write checks, use a debit card, and pay bills from it. A savings account is for money you want to keep and grow. Savings accounts earn interest; checking accounts usually do not. Savings accounts limit how many times you can withdraw per month; checking accounts do not.

Can I open more than one savings account?

Yes. You can open multiple savings accounts at the same bank or at different banks. Some people open separate accounts for different goals—one for an emergency fund, one for a vacation, one for a car down payment. Each account earns interest separately.