The Customary Minimum Balance on Conventional Savings Accounts

The Customary Minimum Balance on Conventional Savings Accounts

Fees that are Associated with Minimum Balances

When you open a conventional savings account, the financial institution may require you to keep a minimum balance in the account in order to avoid charging you a monthly maintenance fee. The typical minimum balance requirement falls between $300 and $500, and the associated fees are typically around $5.

Find out more about the workings of minimum account balance requirements, the reasons why banks have them, and what you can anticipate from major banks in the United States when opening a traditional savings account.

Key Takeaways

  • A traditional savings account has a requirement known as a minimum account balance. This is the lowest amount of money you must keep in the account to avoid incurring fees.
  • The required minimum balance for traditional savings accounts is typically between $300 and $500. Still, this amount can vary from bank to bank, and some financial institutions do not have any minimum requirements at all.
  • A specific minimum daily balance or an average monthly balance may serve as the requirement for the minimum balance amount.

How the Requirements for Minimum Account Balances Are Met

The least amount of money a bank or other financial institution will let you keep in one of your accounts is the “minimum account balance.” When opening a savings account at a bank today, the majority of institutions demand a certain minimum initial deposit.

After that, banks will charge you a monthly service fee, which you may avoid if you keep a certain amount in your account at all times. For instance, to open a Way2Save savings account at Wells Fargo, you are required to make an initial deposit of $25, and a $5 monthly service fee is associated with the account. If, on the other hand, you meet one of the account’s other requirements, such as maintaining a minimum daily balance of $300 in the account, then you won’t have to pay that fee.

Traditional Bank Accounts for Basic Savings

This article takes a closer look at the minimum account balance requirements and fees associated with traditional savings accounts offered by major financial institutions in the United States.

Bank

Minimum Opening Deposit

Ongoing Minimum Balance Requirement

Fee for Not Meeting Requirement (per month)

Other Ways To Waive Fees

Wells Fargo (Way2Save Savings)

$25 $300 (minimum daily balance) $5 Automatic transfer of at least $25 or $1 per business day from a linked WF checking account, primary account holder under 24 years old, or a Save As You Go transfer from a WF checking account.

Chase (Chase Savings)

$0 $300 (minimum daily balance) $5 Account owner under 18, automatic transfers of at least $25 from a Chase checking account, linked Chase College Checking account for Overdraft Protection, or another qualifying Chase account that is linked.

Bank of America (Advantage Savings)

$100 $500 (minimum daily balance) $8 Link the savings account to a Bank of America Advantage Relationship Banking account, become a Bank of America Preferred Rewards client, or be under the age of 24 and enrolled in school.

Citi (Basic or Access Savings Account)

$0 $500 (average monthly balance) $4.50 N/A

U.S. Bank (Standard Savings Account)

$25 $300 (minimum daily ledger balance) or $1,000 (average monthly collected balance) $4 Under the age of 18.

Citizens Bank (One Deposit Savings)

Any amount $0 $4.99 Under 25 or over 65 years old, or one deposit of any amount per month.

Fifth Third Bank (Traditional Savings Account)

$0 $500 (average monthly balance) $5 Have a Fifth Third checking account, be under the age of 18, or enroll in Military banking with Fifth Third.

PNC (Standard Savings)

$25 $300 (average monthly balance) $5 Linked PNC checking account, under 18 years old, or auto savings transfer of at least $25 each month.

SunTrust (Essential Savings Account)

$0 $0.01 $0 N/A

TD Bank (TD Simple Savings)

$0 $300 (daily minimum balance) $5 Under 18 or over 62 years old.

When looking at traditional savings accounts offered by the major financial institutions in the United States, the required minimum balance can range anywhere from zero dollars to five hundred dollars. On the other hand, if your balance is lower than the minimum required amount, you will likely be subject to a monthly service fee that is, on average, somewhere around $5.

Having said that, there are frequently additional ways to avoid paying the service fee. Some of these include being a minor, young adult, or senior citizen; having a linked checking account with the same bank, making small automatic transfers each month; and having a checking account with the same bank.

Accounts for savings with a higher interest rate offered by traditional banks

Now, let’s look at the requirements and fees associated with the savings accounts offered by conventional banks that have a higher yield than the standard savings account offering.

Bank

Minimum Opening Deposit

Ongoing Minimum Balance Requirement

Fee for Not Meeting Requirement (per month)

Other Fee Waivers

Wells Fargo (Platinum Savings)

$25 $3,500 (minimum daily balance) $12 N/A

Chase (Chase Premier Savings)

$0 $15,000 (minimum daily balance) $25 A linked Chase Premier Plus Checking or Chase Sapphire Checking account.

Citi (Priority Package)

$0 $50,000 (average monthly balance in eligible linked deposit, retirement, and investment accounts) $30 N/A

Citizens Bank (Citizens Quest Savings)

Any Amount $0 $0.00 with Citizens Quest Checking N/A

TD Bank (TD Beyond Savings)

$0 $20,000 (minimum daily balance) $15 N/A

If you want to get a higher annual percentage yield (APY), the requirements for the minimum balance in your account at a traditional bank are typically much higher.

If you don’t meet the requirement, you’ll typically be responsible for paying a monthly service fee. This is analogous to the standard practice associated with traditional savings accounts. However, the fee that is associated with these higher yield accounts is typically a little bit higher as well, and it is typically somewhere around $16 per month on average. Take into consideration that if you are assessed these fees, they may quickly cancel out any interest you have earned.

High-Yield Accounts Available Online Only

Finally, for the purpose of making a comparison, let’s look at the different requirements and fees associated with online savings accounts. Because many of these financial institutions do not have to pay for the same overhead costs that traditional banks do, you will typically find more attractive rates and terms when it comes to online savings accounts.

Bank

Minimum Opening Deposit

Ongoing Minimum Balance Requirement

Fee for Not Meeting Requirement (per month)

Other Fee Waivers

Smarty Pig by Sallie Mae

$0 $0 $0 N/A

Affirm

$0 $0 $0 N/A

Ivy Bank

$2,500 $2,500 for 0.61% APY 0.05% APY N/A

Axos Bank

$250 $0 $0 N/A

Alliant

$5 $100 average daily balance N/A $1 paper fee waived with electronic statements

You can see that opening an online account with many banks does not require a minimum deposit, that there are no monthly service fees, and that there is no requirement that a certain amount of money is kept in the account at all times.

How to Keep Your Balance From Falling Below the Minimum Amount

Some financial institutions do not mandate that you keep a specific amount of money in your savings account at all times. Some traditional savings accounts do not require a minimum balance to keep the account open, such as the savings accounts offered by Citizens Bank. If you shop around for a savings account, you can avoid having to maintain a certain minimum balance.

You are most likely to run into minimum balance requirements on savings accounts that offer higher yields and are not offered exclusively online. Traditional banks offer these accounts.

Frequently Asked Questions (FAQs)

What percentage of my income should I put away each month into my savings account?

If you want to be ready for any unexpected event, the standard advice is to put away enough money to cover at least three to six months’ worth of expenses for living in your savings account. In addition, if your financial institution requires you to maintain a minimum balance to avoid incurring fees, keeping at least the required balance can help you make the most of your account. The Federal Deposit Insurance Corporation (FDIC) protects each individual account for a maximum of two hundred fifty thousand dollars.

Why do banks require savings accounts to maintain a certain minimum balance?

For a bank to be able to cover the costs of paying out interest and to assist them in meeting their regulatory capital requirements, they will often require savings accounts to maintain a certain minimum balance in addition to charging monthly service fees. The fee that results from your failure to make deposits that help them generate more revenue will contribute toward covering the expenses that they have incurred.

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