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Why should you carve out a quarter of an hour to apply for a new account and move over your money? To make more and save more. Online-only accounts often come with more favorable interest rates and fees.
In a recent look at my own savings, I shared the three high-yield savings accounts I use to hold my own cash. Between my emergency savings and other savings for future real estate investments, I've signed up for my fair share of online accounts.
Compared to some nationwide banks, which can pay as little as .01% interest, some of the best online banks (like Ally) pay more than 200 times more interest, offering 2% or more. And at the same time, they usually charge no recurring monthly fees with no minimum balance requirements. That's a big win for your money.
I recently signed up for a new account at Capital One to take advantage of a big $500 bonus for new accounts. It took me less than 10 minutes of work and I was off and running with my new account. If you follow the simple steps at your favorite bank's online form, you'll be set up in no time.
Unless you have a job where you get paid in cash, there is no reason you can't go entirely online-only for your banking. But if you just want to start with a high-yield savings account like those offered by Ally, Marcus, or Wealthfront, you can follow these basics steps to get started.
How to get a high-yield savings account
1. Gather your personal information
The first step with any new bank account is getting your personal information together. Banks are required by law to collect customer information. Expect to provide your name, address, phone number, and Social Security number when applying for any new financial account.
Many of the laws regarding providing your information to banks come from the PATRIOT Act introduced after the terrorist attacks on September 11, 2001. In the banking industry, this is known as KYC or Know Your Customer requirements. For us law-abiding customers, that just means we have to provide a little extra information compared to a couple of decades ago.
2. Fill out the application
Most online banking applications take less than 10 minutes to complete. If you are working with a bank that offers a strong customer experience, it may take even less than five minutes.
Most of the application details should be things you already know off of the top of your head. Outside of some employer details, everything in the application is personal.
Online banking may be intimidating if it is new to you, but rest assured that it is safe and simple to use. If you have enough computer skills to make a purchase online or send an email, you can handle the online banking application process and anything you need to do to maintain your account.
3. Fund your account
In many cases, your identity confirmation is instant and you can fund your account right away. If you've ever filled out a direct deposit form for payroll or linked a checking account to pay a mortgage or credit card bill, this will feel very familiar.
My favorite online banks have no minimum balance requirements to avoid monthly fees, though some banks do require a minimum to open a new account. Whether you plan to deposit $1, $100, or $1,000 in your new account, the process is almost always the same.
You may also have the option to mail in a check, deposit a check using your new bank's mobile app, or make a transfer with a bank wire. Outside of wire transfers, there are typically no fees or costs with transferring funds to or from an online savings account.
4. Bonus: Set up your online banking and bill pay
If you add a new checking account at the same time, which is easy to do at most banks and credit unions, you shouldn't stop when you fund your account. Taking a few extra minutes up front can help you get moving on an automatic financial plan.
One of the biggest benefits of online banking is the ability to manage your finances from one central hub. If you connect all of your account including other banks, investments, credit cards, and bills, you'll be able to save a lot of time in the future.
If your account is linked, it makes it really easy to transfer funds. Whether you need to pay for an emergency, want to add to your savings balance, or pay a utility bill, you can do it in a few clicks from your online banking dashboard.
Considering a high-yield savings account? Take a look at these offers from our partners:
Personal Finance Insider offers tools and calculators to help you make smart decisions with your money. We do not give investment advice or encourage you to buy or sell stocks or other financial products. What you decide to do with your money is up to you. If you take action based on one of the recommendations listed in the calculator, we get a small share of the revenue from our commerce partners.
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