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SmartAsset: What Is a Wedding Savings Account?

Planning a wedding can be exciting but it can also turn up the pressure on your budget. Opening a wedding savings account is something you might consider if you’d like to set aside money for the big day. Choosing the right account to save for wedding expenses matters for ensuring that you have convenient access to your money while still earning a great rate. Let’s break down how a wedding savings account works and what you should consider.

A financial advisor could help you create a financial plan to save enough money for your wedding and other financial milestones.

What Is a Wedding Savings Account?

A wedding savings account is a savings account that’s designed to hold money for wedding expenses. You can open a wedding fund savings account at a bank or credit union, make regular deposits to it, then withdraw the money as needed to pay for wedding costs.

Wedding savings accounts can earn interest, though the rate will largely depend on where it’s opened. Like other savings accounts, a wedding savings fund may limit you to six withdrawal transactions per month. Exceeding that number could trigger an excess withdrawal fee.

If you’ve linked your wedding savings account to a checking account, you can transfer funds between them as needed. For example, if you need to put down a deposit on the venue, you can move money from wedding savings to checking to cover that expense.

Should You Open a Wedding Savings Account? 

Setting up a special savings account for wedding expenses can be a smart idea if you’d like to cash flow your wedding as much as possible. Committing to a wedding savings plan can lessen the need to rely on high-interest credit cards, personal loans or financial gifts from friends and family to pay for the special event.

Keeping a separate bank account can also make it easier to track spending for a wedding. You can review your savings balance and transaction history to see how often you’re withdrawing money or transferring it to checking to cover expenses.

As mentioned, wedding savings accounts can earn interest, which is a nice added bonus. The higher the rate and annual percentage yield, the more interest you could earn. And you could also save for honeymoon expenses in the same account or repurpose it for a different financial goal once your wedding date has come and gone.

How Much Should You Have Saved for a Wedding?

The exact dollar amount you’ll need to save for a wedding can depend on your personal wedding budget and the type of celebrations you plan to have. If you don’t have a wedding budget in place yet, making one can help you to determine how much you need to save total and how to break that savings goal down monthly.

Some of the most common wedding expenses to budget for include:

  • Venue deposits and rental fees
  • Photography fees
  • Catering services
  • Music and entertainment
  • Officiant’s fee
  • Flowers
  • Favors and decorations
  • Honeymoon expenses

Once you estimate your costs for each expense in your wedding budget, you can define your savings goal. So, say that your budget adds up to $20,000. You’re planning to get married 20 months from now. To reach your savings goal, you’d need to save $1,000 each month.

Breaking down your wedding expenses that way can help you to figure out whether your savings goal is realistic. If you don’t have an extra $1,000 in your budget to save each month, for instance, you’d need to either adjust your savings target or find ways to cut spending to make up the difference.

Where Should You Save Money for Your Wedding?

SmartAsset: What Is a Wedding Savings Account?

A wedding savings account can be a good place to save for a wedding. The best wedding savings accounts allow convenient access to your money, while allowing you to earn interest and pay minimal fees.

With that in mind, there are several possibilities for opening a savings account for a wedding. Here are six common ways to hold wedding funds:

Traditional savings. A traditional savings account at a brick-and-mortar bank can be a safe, secure place to keep your wedding funds. However, you may not earn the best rates and you’re more likely to pay a monthly fee.

Specialty savings. Some banks offer specialty savings accounts that are designed to help you save for a specific goal, such as wedding expenses. You can check with your current bank or credit union to see if goal-focused or wedding savings accounts are available.

Online savings. Online savings accounts are offered by traditional and online banks. These accounts can usually only be opened and managed online, versus at a branch. Online savings accounts may offer special features or benefits, such as a $0 monthly maintenance fee or a higher APY.

High yield savings. A high-yield savings account is what it sounds like: a savings account that offers a competitively higher yield. It’s possible to find these accounts at brick-and-mortar banks, though you’re more likely to find them at online banks.

Money market savings. Money market accounts combine features of savings and checking accounts. They can earn interest like a savings account, but you might be able to write checks or use a debit card to make purchases from your savings balance.

You could also consider a certificate of deposit (CD) account to save for wedding expenses. CD accounts are time deposits, meaning you agree to leave your savings in the account for a set term. Once the CD matures, you can withdraw your savings and the interest earned.

CD accounts can offer great rates, with no monthly fee. But they don’t allow the same level of flexibility as a savings account or money market account since you can’t take money out early without paying a penalty. For that reason, you may want to reserve a CD account for your honeymoon or other expenses you’ll need to pay after the wedding.

How to Choose a Wedding Savings Account

As noted, there are several different options for opening a wedding savings account. Here are four things to keep in mind when comparing accounts to find the right one for you:

Interest rates. Of course, you’ll want to check out the interest rate and APY for a wedding savings account. Again, you may find the best rates offered at online banks.

Fees. Monthly maintenance fees and other fees can detract from your efforts to save. You might be interested in a low-fee savings option, which you can find at many online banks.

Minimum deposit. Savings accounts can have minimum deposit requirements to open and minimum balance requirements to avoid a fee. It’s important to check those requirements when selecting a new savings account.

Access. If you’re saving for a wedding, you’ll need to be able to take money out again when it’s time to spend. Consider how you’ll be able to manage and access your money, i.e., online banking, mobile banking or at a branch. And consider whether a savings account comes with an ATM card in case you’d like to be able to withdraw cash.

Bottom Line

SmartAsset: What Is a Wedding Savings Account?

Opening a wedding savings account could make sense if you’d like to earmark cash in your budget to pay for wedding costs. While you could use credit cards or loans to pay for a wedding, starting out your married life in debt may not be ideal. Researching different bank accounts for wedding expenses can help you to find one that best fits your needs and savings goals.

Wedding Saving Tips

  • Consider talking to your financial advisor about how to plan for wedding expenses and whether you should open a wedding savings account. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
  • An interest-bearing checking account is another option for holding money that you plan to use for wedding expenses. You might consider that type of account if you’d like to be able to write checks to cover deposits or use a debit card to make wedding purchases, without having to first transfer funds from saving. As with savings accounts, it’s helpful to check the interest rate you could earn and the fees you might pay when choosing an interest checking account.

Photo credits: ©iStock.com/Moyo Studio, ©iStock.com/urbazon, ©iStock.com/toncd32

Rebecca Lake Rebecca Lake is a retirement, investing and estate planning expert who has been writing about personal finance for a decade. Her expertise in the finance niche also extends to home buying, credit cards, banking and small business. She's worked directly with several major financial and insurance brands, including Citibank, Discover and AIG and her writing has appeared online at U.S. News and World Report, CreditCards.com and Investopedia. Rebecca is a graduate of the University of South Carolina and she also attended Charleston Southern University as a graduate student. Originally from central Virginia, she now lives on the North Carolina coast along with her two children.
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