When you open a traditional savings account, you may need to maintain a certain amount of money in the account to avoid monthly service fees. The minimum balance ranges from $300 to $500 in most cases, while the fees are typically around $5.
How Minimum Account Balances Work
The minimum account balance is the least amount of money that the financial institution requires you to keep in a particular account. Many banks require a minimum deposit when opening a savings account.
Banks impose monthly service fees that can be waived if you maintain a minimum account balance. For example, Wells Fargo’s Way2Save savings account requires a deposit of $25 to open the account and comes with a monthly service fee of $5. However, these fees are waived if you maintain a daily minimum balance of $300 in the account, or if you meet one of the bank’s other requirements.
Minimum Balances for Basic Savings Accounts
Here’s a closer look at the minimum balance requirements and associated fees for traditional savings accounts at some major banks in the United States.
Minimum Balances for High-Interest Accounts
Let’s take a look at the minimum balance requirements and associated fees for traditional savings accounts at traditional banks that offer higher returns than their standard savings account offerings.
Minimum Balances for Online Accounts
Let’s examine how fees and requirements vary for online savings accounts for comparison. You generally find more attractive rates and terms when it comes to online savings accounts because many of these financial institutions do not have to cover the same overhead expenses that traditional banks incur.
How to Avoid Minimum Balances
You can avoid minimum balances by searching for a savings account. Several banks do not require maintaining a minimum balance, especially those that offer online savings accounts.
You are more likely to encounter minimum balance requirements in high-yield savings accounts at traditional banks that are not offered exclusively online.
Frequently Asked Questions
How much money should I keep in my savings account?
The general recommendation is to keep at least three to six months of living expenses in your savings account to prepare for emergencies. Additionally, maintaining the minimum can help you get the most out of the account if the bank requires a minimum amount to avoid fees. As for the maximum, the Federal Deposit Insurance Corporation (FDIC) insures up to $250,000 per account.
Why do banks impose minimum balance requirements in savings accounts?
Banks impose minimum balance requirements and service fees on savings accounts as a way to cover the costs of paying interest and to help them meet regulatory capital requirements. The fees generated from this will help cover their costs if you do not make deposits that help generate more revenue.
Was this page helpful?
Thank you for your feedback! Let us know why!
Sources:
Wells Fargo. “Savings Accounts and CDs (Time Accounts).”
Chase. “Savings Made Simple With Chase Savings.”
Bank of America. “Bank of America Advantage Savings.”
Citi. “Citi Savings Account.”
U.S. Bank. “Standard Savings for Easy Access.”
Citizens. “A Guide to Your One Deposit Savings From Citizens Account.”
Fifth Third Bank. “Savings Made Simple.”
PNC. “Savings.”
TD Bank. “TD Simple Savings.”
SmartyPig. “Sallie Mae Bank’s SmartyPig Deposit Account Terms and Conditions Agreement.”
Affirm. “Watch Your Savings Grow.”
Ivy Bank. “Savings Accounts That Help You Grow to New Heights.”
Axos Bank. “High Yield Savings.”
Alliant Credit Union. “Alliant High-Rate Savings.”
Truist. “Truist Online Savings Account Overview.”
Source:
https://www.thebalancemoney.com/typical-minimum-balance-for-traditional-savings-accounts-5204547
Leave a Reply