How to Start Saving Money with a Savings Account

Savings accounts are a great tool to use to start saving money. They usually don't require large minimum deposit requirements.

Unlike other interest-bearing accounts, such as Certificates of Deposit (CDs) or money market accounts, savings accounts usually offer convenient and frequent access, but you should research which account best fits your needs. This makes savings accounts very accessible to those who want to start working towards fulfilling a savings goal.

How much money should you have in savings

The amount of money you should have in savings ultimately depends on your savings goals. A savings goal can be for anything short-term nest eggs, long-term financial goals, important life milestones, or fun activities.

A savings account is a great place to keep your emergency fund savings that can cover emergency expenses. It's generally recommended to keep at least 3-6 months of living expenses in an emergency fund so that if you lose your job, there's a delay in receiving payment, or if you get into some sort of accident, you can still support yourself without needing to borrow money.

Once you've established your emergency fund, you can start setting savings goals for other things, like your future goals, a passion project, or just something fun. Maybe you want to retire early, maybe you're saving for a down payment, or maybe you just want to cross a vacation destination off your bucket list. In any case, a savings account is a great place to store and build your funds.

How to start saving money in 3 steps

Identify Your Goals

Identifying your goals can be as simple as deciphering the costs of what you desire. For example, if you want to buy a new car, how much will it cost? If you want to take a vacation, how much do you need for travel and accommodations?

Whatever number you come up with, it's usually a good idea to make your savings goal slightly larger. That way if any surprise expenses come up, you can still afford them and get what you want.

Create a Budget

A budget is a spending plan that factors in your savings. Calculate how much money you earn, how much money you spend, and the difference between those two will show you how much money is not being used. Then divide your savings goal by how much money is not being used, and you can see how long it will take you to reach your goal.

Are you happy with how long it will take? If so, you don't need to change anything. If not, your budget will show you what you can change.

Adjust Your Spending and Earning as Needed

You can adjust your budget however you like—the point of a budget is to help you become aware of your spending habits so that you can better align yourself with your goals and reach them when you want to.

Your budget can also show you ways to reach your goal faster. For example, you might decide it’s worth the effort to make your own coffee rather than buying it every day to help you reach your goal in 6 months instead of 10 months. Or you might decide to find ways to increase your income so you can have coffee every week and reach your goal in 6 months. It's all up to you.

Can I write checks from a savings account?

Yes, while it’s more common for people to use checking accounts to write checks, it is possible to write checks from savings accounts. Not all savings accounts offer check writing, so you may want to check whether this feature is available.

In most cases, people use checking accounts to write checks, use their debit cards, and have regular immediate access to cash, whereas savings accounts are designed to be used infrequently.

When you need access to the money in your savings account, you can visit a branch or transfer it to a linked checking account. If you have a checking and savings account through Citi, those accounts will be linked, and transfers will be processed quickly.

Can you have too much money in a savings account?

While there is usually not a limit to how much money you can have in a savings account, you may want to consider moving a portion of your money into other accounts that may offer higher interest rates that are designed for specific savings goals like retirement or college savings.

Learn more about different types of Citi accounts.

Get started on your journey by opening a savings account.

Disclosure: This article is for educational purposes about banking products. It is not intended to provide legal, investment, tax, or financial advice and is not a substitute for professional advice. It does not indicate the availability of any Citi product or service. For advice about your specific circumstances, you should refer to the disclosures financial institutions provide for various products and consult a qualified professional.

Additional Resources

  • Utilize these resources to help you assess your current finances & plan for the future.

  • Learn how FICO® Scores are determined, why they matter and more.

  • Review financial terms & definitions to help you better understand credit & finances.