A savings account is a bank account that lets you earn interest on your money.
Savings accounts can be a good way to earn interest on money you don’t anticipate needing in the short term. Saving accounts at most banks are insured up to FDIC limits.
How do savings accounts work?
When you put your money in a savings account, the bank will pay you interest. Savings account interest typically compounds (either daily, monthly or quarterly) and is paid monthly.
Savings accounts generally come with variable interest rates – this means the interest rate can change at any time before and after you open the account. Most banks set the interest rates they pay on savings accounts at their discretion.
Savings accounts may require minimum balances or minimum opening deposits. If your balance falls below a certain amount, you may be charged a monthly service fee. Citi’s savings accounts do not require a minimum deposit to open an account. The bank may limit the number of withdrawals or transfers you can make per month. Savings accounts typically do not come with checks or debit cards, but usually offer ATM cards.
Benefits of savings accounts
A savings account lets you earn interest on deposited funds. It can also be a handy way to put aside money that you'd like to keep for a short-term financial goal, like planning a vacation.
Money in a savings account is easy to access when you do need it. While the bank may place a limit on the number of transfers or withdrawals you can make from your savings account, it’s typically easy to withdraw money or transfer funds to your checking account.
Savings accounts can offer a good way to build up savings each month without having to think about it. Most banks, including Citi, allow you to set up automatic recurring deposits.
How to open a savings account
You can easily open a savings account with Citi® Online, in branch, via the Citi Mobile® App1 or over the phone.
You can also go to a bank branch or visit your bank online. Be sure to have at least one government–issued photo ID, like a driver's license or passport, and your Social Security number. Some banks may ask for proof of your home address, such as two recent utility bills, phone bills or rent receipts.
Most banks require that at least one account holder be 18 or older. Some banks have savings accounts a parent or guardian can share with a minor.
Types of savings accounts
Besides the standard savings account, many banks offer other kinds of accounts in which you can save money. Here are a few of the more popular options.
- High-yield savings accounts can offer higher interest rates than typical savings accounts but may either require a larger minimum deposit or be available only to customers in certain locations.
- Certificates of deposit (CDs) are time deposit accounts that require you to commit your money for a specified time period, such as 3 months to 5 years. CDs may offer higher interest rates than a traditional or high-yield savings account. CD interest rates are typically fixed for the term, but some types, like stepped-rate CDs, have rates that increase on a set schedule. However, if you withdraw your money before the end of the specified term, you will likely have to pay a penalty. Citi offers a range of CD products and terms, including No Penalty CDs.
- Money market accounts (MMAs) are the same as savings accounts and some banks use the term interchangeably. Money market accounts sometimes offer checks or limit the number of transfers or withdrawals you can make.
1Regular account charges apply. Citibank does not charge you a fee for using the Citi Mobile® App. You must have Internet access through your mobile device and charges from your wireless carrier may apply. The Citi Mobile App is available for use with compatible mobile devices.
