Sarah Toffoli: Hi! I am Sarah with Wells Fargo & Company. Today we're learning about the details of a traditional savings account and how to go about opening an account.
First, you should be prepared by asking your bank in advance if there will be a minimum deposit required. You'll need to get your money together in order to meet or exceed the minimum balance requirement. In addition to a balance requirement you'll need to provide some identification to get started and we'll discuss this shortly. Here's how a traditional savings account works. It will allow you to make deposits or withdrawals and you'll earn interest on the balance in the account. There may be limits on how many withdrawals you can make in a month or another period of time. The more funds you keep in the account, the more interest you'll earn. This interest income will be paid every month or every quarter which is four times a year.
You should check out the interest rates available, minimum balance requirements and the limits on withdrawals before you choose where to open your account. Many banks and other financial institutions will encourage you to set up a regular transfer from your checking account into your savings account, so that you'll steadily build up your balance.
You can also have your paycheck directly deposited into your account. Your funds in a savings account are FDIC insured up to the applicable limits.
Banks, credit unions and other financial institutions may have different requirements for opening accounts. It's important to check with the financial institution before you go there so you have all the required documents.
You'll normally need at least 2 forms of current photo identification. These could include a driver's license or state identification card, a passport, U.
S. military ID, Alien Registration card or Matricula Consular card. Some banks can accept a major credit or gas card as identification.
Once you get your required identification-documents and get your funds ready to meet any balance requirement, you're ready to go to the bank, open up a savings account and start building your financial future.