There is no single "best" bank—the right one depends on your habits and what costs you money
The bank that works for you is the one that charges you the least for how you actually use money. If you keep a low balance and make frequent transfers, a bank that charges monthly fees or requires a minimum balance will cost you more than one that doesn't. If you write paper checks regularly, you need a bank that doesn't charge per-check fees. If you travel and use ATMs outside your bank's network, you need one with no ATM fees or a large ATM network. Start by listing what you do with your account—how often you withdraw cash, whether you deposit checks by phone, whether you overdraft sometimes—then match that to a bank's fee structure, not to its name or size.
The difference between two banks can be $50 to $150 per month based purely on fees. That adds up to $600 to $1,800 per year. A bank with no monthly fee, no minimum balance, and overdraft protection might cost you nothing annually, while a national bank with a $12 monthly fee, a $1,500 minimum balance requirement, and $35 overdraft fees could cost you hundreds. The "best" bank is the one that matches your actual behavior.
Key Takeaways
- Monthly maintenance fees, minimum balance requirements, and per-transaction charges vary widely between banks and can cost you $100 to $300 per year if they don't match your habits.
- Large national banks often charge higher fees but offer more physical branches and ATMs; smaller banks and credit unions often have lower fees but fewer locations.
- Online-only banks typically have no monthly fees and no minimum balance, but you cannot deposit cash in person and customer service is phone or chat only.
- Overdraft fees are the single largest hidden cost at most banks—some charge $25 to $35 per overdraft—so check whether a bank offers overdraft protection or grace periods.
- You can open an account at any bank regardless of where you live, so location is not a barrier to finding the right fit.
What fees actually cost you each month
Most checking accounts charge one or more of these: a monthly maintenance fee (usually $5 to $15), a minimum balance requirement (if you drop below it, you pay a fee), per-check fees (25 cents to $1 per check), ATM fees when you use another bank's machine ($2 to $4 per withdrawal), overdraft fees ($25 to $35 per overdraft), and fees for transfers between accounts or wire transfers.
Add up the fees you would actually pay in a month. If you keep $500 in the account, never overdraft, use your bank's ATM, and don't write checks, you might pay nothing. If you keep $200, overdraft twice a month, and use out-of-network ATMs four times a month, you could pay $70 to $100 monthly. The difference between two banks can be $50 to $150 per month—$600 to $1,800 per year—based purely on fees. This is why comparing fee structures matters more than comparing bank names.
National banks versus credit unions versus online banks
National banks (Chase, Bank of America, Wells Fargo, Citibank) have thousands of branches and ATMs, so you can deposit cash and withdraw money almost anywhere. They typically charge monthly fees ($12 to $15), require minimum balances ($500 to $1,500), and charge overdraft fees. They offer the most customer service options—phone, chat, in-person, email. Use one if you need physical locations and don't mind paying for convenience.
Credit unions are member-owned and often charge lower fees or no fees at all. Many have no monthly maintenance fee, no minimum balance, and no overdraft fees (or lower ones). The trade-off is fewer branches and ATMs—you may have to travel to use one. Some credit unions belong to shared branching networks, which gives you access to other credit union branches nationwide. You must be a member to open an account, which usually means living or working in a specific area, working for a specific employer, or belonging to a specific organization. If you meet the membership requirement, a credit union is often the cheapest option.
Online-only banks (Ally, Charles Schwab, Discover, Chime) have no physical branches and no monthly fees. Most have no minimum balance and no ATM fees (or reimburse them). Customer service is phone, email, or chat only—no in-person help. You cannot deposit cash in person, though most let you deposit checks by phone camera or through a partner network. Use one if you rarely need cash, don't mind phone support, and want the lowest fees.
How to compare two banks side by side
When you narrow down to two or three banks, create a simple comparison of the fees and features that matter to you. The table below shows what to look for and what to avoid.
| Fee or Feature | What to Look For | Red Flag |
|---|---|---|
| Monthly maintenance fee | $0 or waived if you meet a simple condition (direct deposit, minimum balance, debit card use) | $10+ with no way to waive it |
| Minimum balance | $0 or under $500 | $1,000+ or a fee if you drop below it |
| Overdraft fee | $0, or a grace period before the fee kicks in | $30+ per overdraft, charged immediately |
| ATM network | Large network (Allpoint, MoneyPass, CO-OP) or no ATM fees anywhere | Limited network or $3+ per out-of-network withdrawal |
| Check deposits | Mobile deposit (phone camera) or in-person at a branch | Mail-in only, which takes 5+ business days |
| Customer service | Phone support during business hours at minimum; chat or email is a bonus | Email only or no support on weekends |
Once you have the table filled in, multiply the monthly fees by 12 to see the yearly cost. A bank with a $12 monthly fee costs $144 per year. A bank with no monthly fee but $35 overdraft fees twice a year costs $70 per year. The numbers make the choice clear.
Overdraft protection and grace periods matter more than you think
An overdraft happens when you spend more than you have in the account. Most banks charge $25 to $35 per overdraft. If you overdraft twice in a month, that is $50 to $70 in fees alone—more than many monthly maintenance fees. For people who sometimes run short on cash, overdraft fees are the biggest hidden cost of a checking account.
Some banks offer overdraft protection, which means they link your checking account to a savings account or credit line and automatically transfer money if you overdraft. This costs less than an overdraft fee (usually $0 to $10 per transfer) or nothing at all. Other banks offer a grace period—they don't charge the fee if you deposit enough money to cover the overdraft within a day or two. A few banks (Chime, Ally) don't charge overdraft fees at all. If you sometimes spend more than you have, these features can save you hundreds per year. Ask about overdraft protection before you open an account.
How to open an account and switch if you need to
You can open a checking account at any bank online or in person, regardless of where you live. You will need a government ID, a Social Security number or tax ID, and proof of address (a utility bill, lease, or bank statement). Most banks let you open online in 10 to 15 minutes and start using the account the same day or within one business day.
If you already have an account at a bank that charges high fees, you can switch. Set up a new account at the bank you want to use, then ask the new bank to transfer your balance from the old account (most do this for free). Update your direct deposit and automatic payments to the new account. Close the old account once everything has moved. The whole process takes a few days to a week. You do not have to stay with a bank that is costing you money.
Frequently Asked Questions
Do I need to use a bank in my state?
No. You can open a checking account at any bank in the country, whether it is a national bank, a credit union in another state, or an online bank. Location does not matter for opening or using the account. The only exception is credit unions, which may require you to live or work in a specific area or belong to a specific organization to join.
What if I have bad credit or a history of overdrafts?
Most banks do not check your credit score to open a checking account. However, some banks check ChexSystems, a banking history report that tracks overdrafts, bounced checks, and closed accounts. If you have a negative ChexSystems record, some banks will deny you. Credit unions and online banks are often more lenient. You can also look for "second chance" checking accounts, which are designed for people with banking history issues and usually have higher fees.
Should I keep money in savings at the same bank as my checking?
It is convenient to keep both at the same bank, but not required. Some banks charge fees on savings accounts too, while others offer high interest rates. Compare savings account fees and interest rates separately from checking. You can have checking at one bank and savings at another if that saves you money.
Can I use any ATM without paying a fee?
It depends on the bank. National banks let you use their own ATMs for free but charge $2 to $4 to use another bank's ATM. Credit unions often belong to shared networks (CO-OP or Allpoint) that let you use thousands of ATMs nationwide for free. Online banks like Ally and Charles Schwab reimburse all ATM fees, so you can use any ATM and get the fee back. If you use ATMs frequently, pick a bank with a large network or fee reimbursement.
How long does it take to open an account?
Online, most banks complete the process in 10 to 15 minutes and activate your account the same day or within one business day. In person at a branch, it usually takes 15 to 30 minutes and the account is active immediately. You can start using a debit card within a few days once it arrives by mail.