How to Start a Savings Account

At some point in your life, you'll probably have the need or desire to put back some extra cash for a "rainy day." When this happens, it's time to crack open that piggy bank and make a trip to the bank. These next few suggestions will help you find the right place and the right way to deposit your money.

Difficulty: Moderately Easy

Instructions

1. Do a little rate shopping. Call around to two or three banks in your area to see what their best rate is on a basic savings account. Some banks have rate specials now and then, but savings rates are usually pretty close across the board. Unless you have more than $1500 to initially invest, you'll be looking at a fairly small introductory rate.

2. Consider your long term goals. If you're saving for a car or a house, let your banker know this. They can suggest the best savings products for your particular goals.

3. Take in your initial deposit, sign the signature card and you're on your way! Remember, ten percent of each paycheck is the general rule when it comes to saving.

Tips & Warnings

• Make sure you add money regularly. This is not only to improve your own wealth, but also to help you avoid penalties. An account will go inactive after three months with no deposit activity, and it will be assessed fees and eventually close if it goes more than a year without any deposits.
• Consider a Certificate of Deposit. If you want to save some money and earn some interest without the worries of inactivity, a CD might be a good idea. You can open one with as little as $1000 for a term as short as one month or as long as one year.
• Don't start a savings account if you think you'll need to draw out money fairly often. The government monitors the number of withdrawals you're allowed to take from a savings account each month. For access to your cash with no limits, a checking account may be better.