If you’re interested in opening a new savings account, you may have come across accounts that have minimum balance requirements. Some banks require you to deposit a certain amount of money in order to open an account, while others might require you to maintain a minimum balance to avoid monthly fees.

So what’s the typical minimum balance required? And should you avoid accounts that have minimum balance requirements? Let’s take a closer look.

What’s the typical minimum balance for savings accounts?

The minimum balance you need in your savings account varies from one account to the next. You can find plenty of savings accounts — many of them at online banks — that don't require a minimum balance at all. For accounts that do have a minimum requirement, the amount might range anywhere from $100 to $100,000 or more, depending on the account type.

Here are some examples:

What happens if my savings account balance drops below the minimum?

If your savings account has a minimum balance requirement, you'll need to ensure you keep at least that amount of money in the account to avoid penalties. When your balance drops below the minimum, you typically have to pay monthly account maintenance fees and could also incur other fees in addition to having your interest earnings suspended.

If you're struggling to maintain the minimum balance, there are ways to avoid maintenance fees. You might move your funds to a different account or check to see if the bank waives the fees for any of the following common reasons:

• You're a student

• You're under 25 years old or over 62

• You choose paperless statements

• You make monthly automatic deposits to the account

• You link to a checking account at the same bank

Regardless of whether there's an account minimum or not, it's important to keep your savings account funded and active, since it could be automatically closed if you carry a $0 balance for two months or more.

Tiered accounts

With tiered savings accounts, you're rewarded for maintaining different minimum balance amounts. In some cases, higher account balances qualify you for a higher annual percentage yield (APY), but that's not always the case.

For example, CIT Bank's Platinum Savings account gives you 0.25% APY on balances up to $5,000, but when your balance passes that amount, your APY adjusts up to 5.05%. But with the high-yield savings account at Varo bank, you earn 5% APY on up to $5,000 in deposits and 3% APY on any additional funds.

What’s the typical minimum balance for CDs?

CDs don't have minimum balance requirements since, unlike savings accounts, you can't add funds or make transactions from the account. And if you make a withdrawal before the maturity date, you'll face an early withdrawal penalty. The penalty is usually equivalent to a set portion of the interest you've accrued.

Instead, CDs have minimum opening deposit requirements. For most traditional CDs the minimum deposit is $500 or $1,000, and for jumbo CDs, it's often $100,000.

Should you avoid minimum balances?

A minimum balance on a savings account isn't necessarily a bad thing. If you need an incentive to keep funds in your savings account or avoid overdrafting, a minimum deposit requirement could help. Minimum deposit requirements also tend to be low and shouldn't be a concern if you know you'll keep a higher amount on deposit.

In some cases, high minimum deposit requirements can also be tied to higher APY. Depending on market conditions, you might be able to find savings accounts with high APY and no minimum deposit requirement, especially if you look for online accounts. By contrast, many banks have minimum deposit requirements but offer just 0.01% APY on their savings accounts.

Ultimately, you should decide what account features are most important to you. In some cases, accounts that require a minimum deposit or minimum balance might not fit your needs. But as your savings grow over time, keeping a larger balance on deposit could help you achieve better rates and account perks.