Technology has made our lives much more manageable, especially with banking. You can do almost all of your banking online and stay updated on your accounts via mobile apps.
Banks, credit unions, and other financial institutions allow you to open a savings account online. Savings accounts generally pay more interest than checking accounts, making them an excellent place to put away funds for emergencies or when you are saving for a specific goal. If you are ready to open an online savings account, here are some steps that will make the process easier.
Do Your Research on Online Savings Accounts
Now that you’ve decided to start an online savings account, your next step is to choose one. There are so many options available, so don’t just pick the first one you come across. Do some research and compare a variety of financial institutions so you get the right account for yourself.
Some of the key factors to consider in your decision are:
Interest rate. Probably the most important factor in your choice is the interest rate you will earn on your savings account. Look for accounts with the highest interest rates to make the best return. Be sure to read the fine print too. An online savings account might offer a high-interest rate on a specific dollar amount, then drop it significantly. For instance, an account could give you 4% interest on the first $1,000; after that, you earn .02%. If that is the case, you might consider keeping about $1,000 in that account, but look for other options if you have more money.
Minimum deposit requirements. Many savings accounts require a certain amount of deposit to avoid fees. For instance, a bank could require a balance of $2,500 and charge a $5 maintenance fee if your balance drops below the minimum. If you are comfortable with having at least the minimum deposit amount in the account, then you might be okay with this option.
Other fees and penalties. Research all the fees and penalties associated with the savings account. Fees can add up and take away the benefit of earning interest on a savings account. Consider whether the costs are relevant to your account use or look at no-fee savings account options.
Insurance. Ensure the Federal Deposit Insurance Corporation or the National Credit Union Association backs the financial institution. This insurance provides each depositor with $250,000 of coverage if the financial institution fails.
Mobile and online banking. Since you will manage this account online, ensure the financial institution’s mobile and online banking platforms are easy to use and meet your needs.
Choose the Financial Institution and Gather Your Information
You’ve chosen the financial institution for your savings account, and now you’re ready to open a new account. Start by ensuring you have all the information you need to open your account. Financial institutions may have different questions that they will ask on their online application. Some may require you to upload a copy of your identification.
You must provide your full name, address, and Social Security number. You might also be asked to verify your identity by answering questions they pull from your credit report. Be prepared to answer these questions, as you might not be able to complete your application otherwise.
Submit Your Application and Fund Your Account
Go to the financial institution’s website and find their online savings account application link. You can usually enter your information into the form in less than 30 minutes. Be sure to pay attention to the account you are opening, as many financial institutions offer a variety of savings accounts.
To fund your account, you will need your current account's bank routing and account number. If the new online savings account requires a minimum deposit, fund at least that amount.
NASB has several savings accounts that can meet your financial goals. Open a savings account today or call us at 800-677-6272.
