6 Features of the Best Savings Accounts
By Synchrony Staff
- PUBLISHED August 07
- 5 MINUTE READ
If you’re looking for the best way to save instantly and securely, look for these six features in your savings account:
Open an account instantly. The best banks allow you to open an account online quickly and easily, without the hassle of having to visit a brick-and-mortar branch. Online banks often provide fast, streamlined applications to open a savings account.
No minimum deposit or minimum balance requirement. Saving money can be hard—especially for young people just starting out. In fact, research shows that 20% of millennials age 25-34 have less than $1,000 in personal savings. Some banks charge their customers a fee for failing to maintain a minimum balance, which, on average, is $3.30. An account with no minimum deposit or balance requirement makes it easier to save since you won't lose your earnings to fees.
No monthly service fees. Maintenance or service fees can quickly diminish your savings. The best banks offer a savings account with no monthly service fee.
Online transfers between accounts. Online banking gives you more control of your money and easy, instant access to your savings. It can also help you to save by allowing you to transfer funds from your checking account into your savings.
Direct deposit into savings or automatic savings transfers. Financial experts recommend finding an account that allows you to directly deposit a portion or all of your paycheck into savings. This way your money instantly moves into savings before you feel tempted to spend it. Using an automatic savings transfer feature also helps with saving, as your money will transfer automatically from your checking to savings account at set intervals.
FDIC insured. Make sure that your savings account is insured by the Federal Deposit Insurance Corporation (FDIC). That means that your money is protected up to $250,000 per depositor for each ownership category in the event of a bank failure.
- Low fees. Many online banks don’t have service fees.
- High interest rates+. Since online banks spend less on brick-and-mortar locations, they’re generally able to offer higher interest rates to their customers.
- Low deposit and balance friendly. It’s common for online banks to allow small initial deposits and minimum balance requirements.
- Easy access savings accounts. Online banks are rarely unavailable and allow you have to instant access to all of the details about your savings account.
- Customer service. Fitting your banking needs into traditional banking hours can be difficult and luckily isn’t necessary with online banks. Customer service is often available outside business hours on evenings and weekends.
How to Open a Savings Account Online
You’ll generally need to provide the following information to open your online savings account:
- Physical address
- Date of birth
- Social security number (taxpayer identification number)
- Driver’s license and/or state identification card number
If you would like to sign up for a joint account, this information must be provided for both applicants. You must both also generally:
- Be 18 years or older
- Be U.S. citizens or U.S. lawful permanent residents (green card holder)
- Have a U.S. permanent resident address
To fund your new account electronically, you need both the external bank account number and routing/transit number of your other bank.
How Much Should You Be Putting in Your Savings Account?
If possible, aim to save 20% of your monthly income, which can be put toward:
- An emergency fund. Save three to six months of living expenses in case of a job loss, medical expenses or other unplanned events.
- Rainy day fund. This type of savings covers expected but expensive costs like car repairs, home maintenance, braces for your kids and other purchases.
- Down payments. Your monthly savings can go toward a down payment on a large purchase like a house or car.
- Retirement. Experts recommend saving 10 to 15% of your income for retirement starting in your 20s.
A savings account can help maximize the money you set aside and keep you organized as you work toward these financial goals.