Do Banks Require a Minimum Balance for Savings Accounts?

65% of Americans have a deposit account, most often a savings account, used to securely store extra cash in the hopes of earning a little extra interest on the principal. There are hundreds of savings account options from bank branches, online financial institutions and credit unions, all with different features and requirements.

Why Everyone Needs a Savings Account

Even though savings accounts tend to limit the ability of depositors to add and withdraw money as compared with checking accounts, savings accounts provide benefits that other deposit accounts can’t. For instance, unlike checking accounts, savings accounts offer much more interest on the money you deposit, helping you to meet savings goals faster.

Banks With Savings Account Minimum Deposit Requirements

It is up to the discretion of a bank whether or not they require a minimum balance for a savings account. However, by meeting a minimum, you are usually entitled to perks like waived fees or no caps on withdrawals per month. These perks are sometimes based on a tiered system so the more you save, the greater the benefits and savings interest rates offered to you.

How to Avoid the Minimum Balance

Some banks choose to waive the minimum completely when special conditions are met.

Many banks operate on the system of providing free savings accounts with no minimum balance to be used in conjunction with your regular checking account. Many online banks, especially, require a minimum of only $1 to open a savings account, which may as well be considered to have no minimum balance requirement at all. Once the account is opened there is no imposed minimum balance or monthly fees.

One consideration to keep in mine, however, is that while these online savings account are extremely simple and hassle free, the transfers between your local bank branch to your online account and back may take a couple of days to post. Customers should be aware of the time delay if they need to access their money immediately.

Before opening a bank account, it is always a good idea to comparison shop and figure out what the best option may be for you. While online banking usually requires no minimum balance for a savings account, you may find you benefit more by keeping it local or dealing with a low minimum for convenience.

Photo Credit: Alan Cleaver