Opening a Savings Account
By Kimberly Sutherland
Money is a very powerful thing. 
When you have money you can do a lot more things than you could when you don't have money. However, the question is, how do you have enough money to do anything you want? The best answer is to SAVE.
The first step in this series on the principles of having enough money to get anything you want is to open a savings account.
What is a savings account?
A savings account is one of the many types of accounts that a bank has to offer. A savings account is probably the best place to put your money. A savings account earns interest every month. Interest is an amount of money that the bank will give you for keeping money in your account. The interest you receive from the bank may vary. It depends on the type of bank you are using. If the bank is a savings bank, the interest rate may be higher than the interest rate offered by a commercial bank. If you are not sure if the bank is a savings bank or a commercial bank ask the customer service representative. Make sure you compare interest rates for several different banks before you make a decision.
A savings account is a safe place to keep your money. If anything happens to the bank, you are guaranteed the amount of money that you have in the bank. FDIC (Federal Deposit Insurance Corporation) laws guarantee that you are insured up to $100,000.00 for the account(s) you own. Some accounts can be insured up to $250,000. Isn't that a great deal!
What are the types of savings accounts?
- Statement/Online Savings - This is the most common type of savings account. Each month you will get a paper or online statement that tells you how much money is in your account. You can also see how much interest the bank gives you for the money that you have added to your account.
- Money Market - This type of savings account earns more interest. In other words, the bank will give you more money for keeping your money in this type of account. Usually you have to have a large amount of money to open this account.
- Certificate of Deposit / CD - This type of savings account earns the most interest. To open this type of account you have to put in a certain amount of money for a specific amount of time. Once you open this type of account, you will not be allowed to take money out until the time that you agreed upon is over. For instance, many CD's have a 6 month or 1 year period.
How do you open an account?
If you are under the age of 18, you have to open a bank account with your parent or guardian. Most banks also require a minimum amount to hold in your bank accounts. It is important for you and your parents to research the different banks and their different saving accounts to find out how much money you will need to open the account. The minimum deposit can be as low as $5.00 and as high as $300 and up. Once you and your parents have selected a bank, bring a birth certificate and a social security card and fill out and sign all the necessary paperwork.
How much money should I add to the account?
After you open your saving account it is important to keep adding money to the account. This is an important step in making lots of money. Some banks may charge a monthly fee if your balance falls below the required minimum balance. Make sure you know if there is a required balance minimum and what the fee will be if your account falls below that minimum.
It is the best practice to always save 10% of any amount of money that you make or receive as a gift. Think about all the allowance, birthday and holiday money you received in the past. Think about the graduation money you might have received recently. If you took 10% of that total what would you have right now? Therefore, if you receive a gift of $100 at the very least save $10.00 (To calculate 10% of any number multiply .10 by the amount or 100 x .10 = 10). If you don't have an account yet, you can still save. Take 10% out of your money and ask your parent or another responsible adult to hold it until you are ready to open your account. Soon you will get in the habit of saving 10%, and before you know it you will have a "sweet" balance. Remember you are going to earn interest on your money and you get to watch your money grow and grow.
Have fun opening your new savings account. This is one of the first steps towards money growth.
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