Learn more about how minimum account balance requirements work, why banks have them, and what you can expect from major U.S. banks when you open a traditional savings account.
How Minimum Account Balances Work
A minimum account balance is the least amount of money a financial institution requires you to keep in a specific account. Many banks require a minimum deposit when opening a savings account. Banks impose a monthly service fee that can be waived if you maintain a minimum account balance. For example, Wells Fargo’s Way2Save savings account requires a $25 deposit to open the account and it comes with a $5 monthly service fee. But that fee is waived if you keep a $300 minimum daily balance in the account, or if you fulfill one of the bank’s other requirements.
Minimum Balances for Basic Savings Accounts
Here’s a closer look at minimum account balance requirements and fees for traditional savings accounts at some major U.S. banks. There are often other ways to avoid the service fee, such as by having a linked checking account with the same bank, making small automatic transfers each month, and being a minor, young adult, or senior citizen.
Minimum Balances for High-Interest Accounts
Now let’s look at the requirements and fees from the traditional banks’ savings accounts that offer a higher yield than their standard savings account offering. Similar to the practice with traditional savings accounts, you’ll typically have to pay a monthly service fee if you don’t meet the requirement. But the fee is also generally a bit higher with these higher yield accounts, averaging about $16 per month. Keep in mind that these fees can quickly negate your interest earnings.
Minimum Balances for Online Accounts
Let’s look at how the fees and requirements vary for online savings accounts for a comparison. You’ll typically find more attractive rates and terms when it comes to online savings accounts because many of these financial institutions don’t have to pay for the same overhead costs that traditional banks incur.
How To Avoid Minimum Balances
You can avoid minimum balances by shopping around for a savings account. Several banks don’t require that you keep a minimum balance, particularly those that offer online savings accounts. You’re most likely to run into minimum balance requirements on traditional banks’ higher yield savings accounts that are not exclusively offered online.
