Technology has made our lives much more manageable, especially with banking. You can do almost all of your banking online and stay up to date on your accounts via mobile apps.
Many banks, credit unions, and other financial institutions allow you to open a savings account online. Savings accounts generally pay you more interest on your money than checking accounts. As a result, they are 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 pick an account. There are so many options available, 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 you.
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. To make the best return, look for accounts that offer the highest interest rates. Be sure to read the fine print too. An online savings account might offer you a high-interest rate on a specific dollar amount, then drop it down significantly. For instance, an account could give you 4% interest on the first $1,000, and then 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 available.
Minimum deposit requirements. Many savings accounts require that you deposit a certain amount if you want to avoid fees. For instance, a bank could require that you hold 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 ok 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 total benefit of earning interest on a savings account. Consider whether the costs are relevant to the way you will use the account or look at no-fee savings account options.
Insurance. Make sure that the financial institution is either backed by the Federal Deposit Insurance Corporation or the National Credit Union Association. This insurance provides each depositor with $250,000 of coverage if the financial institution fails.
Mobile and online banking. Since you will be managing this account online, make sure the financial institution’s mobile and online banking platforms are easy to use and meets 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 the new account. Start by ensuring that 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.
In general, you will need to provide your full name, current 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 link to the online savings account application. In most cases, you can enter your information into the form in less than 30 minutes. Be sure to pay attention to the account that you are opening, as many financial institutions offer a variety of savings accounts.
To fund your account, you will need the bank routing and account number of a current account that you have. If the new online savings account has a minimum deposit requirement, make sure you are at least funding that amount.
NASB has several savings account that can meet your financial goals. Open a savings account today or give us a call at 800-677-6272.