More than 5.5 million Americans call Minnesota their home, and each of those Americans needs access to banking services. Hundreds of banks operate in the state, giving consumers plenty of choices when it comes to opening a new account.
Savings accounts are one of the most popular banking services in the United States. In fact, only the checking account is more popular. Because so many people want to open savings accounts, nearly every bank offers a savings account. That means that banks have to compete with each other to draw new customers.
Savings accounts offer two benefits to consumers.
First, they give consumers a safe place to store their extra cash, while still making it easy to access. That makes savings accounts a great place to store an emergency fund.
Second, savings accounts pay interest to depositors based on how much money is in the account. That means that people can help their money grow by depositing to a savings account.
If you live in Minnesota and want to open a new savings account, this article will cover the options that are available to you.
Largest Banks in Minnesota
The largest banks in Minnesota, by deposits, are:
This list includes both national and local banks.
If you’re looking to open a savings account in Minnesota, we recommend that you work with one of these local banks:
- TCF National Bank
- Bell Bank
- Minnwest Bank
The Best Savings Options at Local Minnesota Banks
Working with a local bank brings a number of benefits, but there are two that are truly worth noting.
The first is that local banks excel at providing personalized service in a way that national banks cannot.
National banks have standardized accounts and rules for how employees are able to help customers.
The staff at local banks will be better at getting to know you over time. They will also be less impacted by red tape and more able to help you out if you find yourself in need.
Local banks can also focus on local consumers. National banks need to offer accounts that are workable for everyone, but great for no one. Local banks know exactly what local consumers need and can focus on offering those services.
They won’t waste money offering services that none of their customers will use.
For example, if every ATM in the area is on the same network, a local bank won’t bother offering ATM fee reimbursements. Instead, it will use that money to offer more useful benefits.
There are also arguments against working with a local bank.
If you move away, you’ll probably have to switch banks. If you use a national bank, you’ll have no trouble finding a branch or ATM wherever you move.
The same holds true when you travel. You’ll never be far from ATM you can use if you bank with a national bank.
Advantages and Disadvantages of Savings Accounts from Local Banks
TCF National Bank Free Savings
The TCF National Bank Free savings account gives consumers a fee-free, basic savings experience.
The only requirement that you need to meet to open the account is to make a $25 opening deposit. Once you’ve opened the account, there’s no minimum balance to maintain and no monthly fee to worry about.
If you open a TCF Free Savings Account you can link it to your TCF checking account. If you do, you can set up automatic overdraft transfers. That will help you avoid expensive overdraft fees.
Bell Bank Regular Savings
The Bell Bank Regular Savings Account offers a reasonable rate of interest to people who can open the account.
To get started with the Bell Bank Regular Savings Account, you must make a $50 opening deposit. Once the account is open, you must maintain that $50 minimum balance. You’ll earn no interest on any day that your balance falls below that amount and you may have to pay a fee if you let your balance stay below $50.
You are limited to making six withdrawals per quarter. Additional withdrawals may incur fees.
Minnwest Bank Money Max Savings
The Minnwest Bank Money Max Savings Account is a money market account that offers great rates for large balances.
Money market accounts combine the benefits of savings accounts and checking accounts. You can earn a great interest rate and have easy access to your money with checks and a debit card. The downside is that these accounts often involve fees and high minimum balance.
The Minnwest Bank Money Max Savings Account holds true to this, requiring a $10,000 minimum deposit to open. You can earn more interest by depositing more money, with the rate increasing for balances exceeding $25,000 and $100,000.
Consider Online Savings Accounts (Available Nationwide)
If you’re looking to open a savings account and don’t want to work with a national bank, local banks aren’t the only option. You should also take the time to look for an online bank that can meet your needs.
Online banks are known for their low fees and great interest rates. Online banks can offer these benefits because they are much cheaper to run than brick and mortar banks. They don’t have to pay for the costs of running branches or operating an ATM network.
They can also save money by operating out of a single, centralized location. This has helped them avoid raising fees like brick and mortar banks have.
Your money grows faster
The benefit of high rates and low fees is difficult to overstate. Choosing the right account can make a difference of hundreds or thousands of dollars over time.
This example will illustrate how large the effect of interest rates and fees is.
You plan to put $20,000 into a savings account today. Each month, you’ll add $500 to the account. After five years you’ll take the balance of your savings account and use it to make a down payment.
If you open an account at a brick and mortar bank, you might earn 0.05% APY (usually much less). After five years, you’ll have a balance of $50,086.97 in your savings account. You’ll have earned less than $100 in interest in that time.
Online savings accounts offer ten to one hundred times more interest than a brick and mortar savings account does. If you instead earned 1.50% APY, your account’s ending balance would be $52,690.14.
Just by choosing an account with higher interest rates, you can earn an extra $2,500 over the course of five years.
This also ignores the fact that the brick and mortar bank might charge monthly fees to keep the account open.
That will significantly reduce the amount of interest you earn.
Start saving with a low balance
Another reason to work with an online bank is the low minimum deposits.
Many brick and mortar banks will require that you make an opening deposit of $50 or $100. If you can’t get that much money together, you won’t be allowed to open an account.
Online banks have very low minimum deposits. Some let you open an account with just a penny, making it easy to get started with saving.
FDIC insurance keeps your money safe
One common worry for people new to online banks is that online banks seem less safe than brick and mortar banks. While giving your money to a bank you can’t see might feel unsafe, online banks are perfectly safe.
The Federal Deposit Insurance Corporation protects the money you deposit to your online savings account. If the bank is later unable to return your money to you the FDIC will reimburse you for the money lost.
The FDIC insures up to $250,000 per account type, per person, at a bank. If you have multiple savings accounts, you’ll be able to deposit up to $250,000 risk-free. You can get up to $500,000 in protection by opening a joint savings account and splitting your balance between the accounts.