There is no single "best" checking account — it depends on how you bank

The checking account that works for you depends on what you actually do with your money: how often you withdraw cash, whether you keep a balance, how many checks you write, and whether you want to bank in person or online only. A Tennessee resident who visits an ATM twice a week and keeps $500 in the account needs something different from someone who deposits paychecks by phone and never carries cash. Before you compare accounts, know what you use.

Tennessee has no state income tax, which means more of your paycheck stays in your account — but that does not change how checking accounts work or what they cost. The banks and credit unions operating in Tennessee offer the same basic account types as anywhere else: accounts with monthly fees, accounts with no monthly fee if you meet conditions, and accounts designed for people who cannot meet those conditions.

The real choice is between a bank branch you can walk into, an online-only bank, and a credit union. Each has a different cost structure and a different reason to pick it.

Key Takeaways

  • Banks with Tennessee branches charge monthly fees unless you maintain a minimum balance or set up direct deposit, while online-only banks often have no monthly fee at all.
  • Credit unions typically offer lower fees and better interest rates on savings, but you must live or work in their service area to join.
  • If you need cash frequently, a bank with many ATMs in Tennessee (or a network you can use) matters more than the account name.
  • No checking account is truly free — you pay either in monthly fees, minimum balance requirements, or by accepting lower interest rates on money you keep in the account.
  • The account that costs the least depends on your specific habits: how much you keep in it, how you deposit money, and how often you need to withdraw.

Banks with branches in Tennessee versus online-only banks

A traditional bank with Tennessee locations — such as FirstBank, Avenue Bank, or a major national bank like Bank of America or Wells Fargo — charges a monthly maintenance fee unless you meet one of their conditions. Those conditions usually include keeping a minimum balance (often $500 to $1,500), setting up direct deposit, or maintaining a linked savings account. If you do not meet any condition, you pay $10 to $15 per month.

Online-only banks like Ally, Charles Schwab, or Discover have no monthly fee and no minimum balance requirement, period. They make money from the interest they earn on the money you deposit, not from charging you. The trade-off is that you cannot walk into a branch to deposit cash or speak to someone in person. You deposit checks by taking a photo with your phone, and you withdraw cash at ATMs that partner with the bank's network.

If you rarely carry cash and your paycheck goes straight to your account by direct deposit, an online-only bank saves you money. If you deposit cash regularly or need to speak to someone face-to-face, a branch bank is worth the fee — or worth finding a credit union in your area.

Credit unions in Tennessee and how to join

A credit union is a member-owned financial institution, not a for-profit bank. Credit unions in Tennessee typically charge lower monthly fees (or none), offer better interest rates on savings accounts, and charge less for overdrafts and other services. The catch is that you must meet their membership requirement: you must live, work, or have family in their service area, or belong to a specific employer or organization.

Tennessee has dozens of credit unions. Some serve specific regions (like Pinnacle Credit Union, which serves Middle Tennessee), some serve specific employers (like TVA Federal Credit Union, open to Tennessee Valley Authority employees and their families), and some serve specific groups (like Teachers Credit Union, open to educators). You can search for credit unions near you at CO-OP.org or Shared Branch, which show you which credit unions you can join and which ATMs you can use for free.

If you can join a credit union, compare their checking account fees to the online-only banks. Many credit unions offer no-fee checking with no minimum balance, which ties or beats what online banks offer — and you get the option to visit a branch or call a local number if something goes wrong.

What to look for when comparing accounts

Monthly maintenance fee is the most obvious cost, but it is not the only one. Look at these specific things:

  • Overdraft fees: If you overdraw your account, the bank charges $25 to $35 per transaction. Some banks charge multiple overdraft fees in a single day; others cap it at one per day. Some let you opt out of overdraft protection entirely, which means a transaction simply declines instead of overdrawing.
  • ATM fees: If you use an ATM outside the bank's network, you pay $2 to $3 per withdrawal. If you withdraw cash twice a week, that is $16 to $24 per month. Check whether the bank has enough ATMs in the places you actually go, or whether it partners with a network like Allpoint or MoneyPass.
  • Check fees: Most banks include a certain number of checks per month free; after that, you pay per check. If you write more than 10 checks per month, ask about this.
  • Minimum balance: Some accounts waive the monthly fee if you keep $500 or $1,000 in the account at all times. If you cannot reliably keep that balance, an account with no minimum is cheaper even if it has a small monthly fee.

Compare these costs across three to five accounts before you decide. A $10 monthly fee plus $3 ATM fees adds up to $46 per month if you withdraw cash four times. An account with no monthly fee but a $100 minimum balance costs you nothing if you keep that balance anyway.

Specific Tennessee banks and what they charge

FirstBank, headquartered in Nashville, operates across Tennessee and the Southeast. Their basic checking account charges $10 per month if you do not maintain a $500 minimum balance or set up direct deposit. They have hundreds of branches and ATMs in Tennessee, which matters if you need to deposit cash or speak to someone in person.

Avenue Bank, also based in Tennessee, offers checking accounts with no monthly fee if you maintain a $100 minimum balance. If you cannot keep $100 in the account, they charge $5 per month. They have fewer branches than FirstBank but serve most of Tennessee.

For online-only options, Ally Bank and Charles Schwab both offer no-fee checking with no minimum balance. Ally reimburses ATM fees nationwide, which means you can use any ATM and get your money back. Charles Schwab also reimburses ATM fees and offers check deposit by phone photo. Both are FDIC-insured and have customer service available by phone.

How to decide between in-person and online banking

Ask yourself these questions: Do you deposit cash more than once a month? Do you need to speak to someone in person when something goes wrong? Do you write checks regularly? If you answered yes to any of these, a bank with Tennessee branches or a local credit union is probably worth the fee.

If you deposit by direct deposit only, never carry cash, and handle everything by phone or computer, an online-only bank saves you money and offers the same safety — your money is FDIC-insured whether the bank has branches or not.

A middle ground is to use a credit union if you can join one. Many credit unions offer no-fee checking, have branches you can visit, and participate in shared branching networks that let you use other credit union branches across the country.

What happens after you open an account

Once you choose an account and open it, set up direct deposit if your employer offers it. Direct deposit gets your paycheck into your account automatically, which often waives the monthly fee and gets you paid a day or two earlier than a paper check. You will need to give your employer your account number and routing number, which the bank provides when you open the account.

Set up alerts for low balance, overdrafts, and large withdrawals. Most banks let you do this through their app or website. An alert costs nothing and can stop you from overdrawing or missing a payment.

If you are moving money between accounts or banks, use ACH transfer (which takes one to three business days) rather than wire transfer (which costs $15 to $30 and is usually not reversible). Most banks let you set up ACH transfers for free through their website.

Frequently Asked Questions

Do I need to open a checking account at a bank with branches in Tennessee?

No. You can open an account at any FDIC-insured bank in the country, including online-only banks. The only reason to choose a Tennessee bank is if you need to deposit cash in person or speak to someone face-to-face. If you bank entirely by phone and direct deposit, location does not matter.

What if I have bad credit or a history of overdrafts?

Some banks and credit unions offer second-chance checking accounts designed for people who have had problems in the past. These accounts usually have higher fees but do not require a credit check. Ask your local credit union or a bank like Chime or GoBank about accounts for people rebuilding their banking history.

Can I use my Tennessee checking account if I move out of state?

Yes. Your account stays open and works the same way. If you move to a state where your bank has branches, you can visit them. If not, you can still use ATMs, direct deposit, and online banking. You do not have to close the account or open a new one.

How much money should I keep in my checking account?

Enough to cover your regular expenses plus a small cushion for unexpected costs — usually $500 to $1,000. Checking accounts earn little to no interest, so money beyond that should go into a savings account. Keep the minimum balance your account requires to avoid monthly fees, then move extra money to savings.

What is the difference between a checking account and a savings account?

A checking account is for money you spend regularly; you can write checks, use a debit card, and withdraw cash as often as you want. A savings account is for money you are keeping; it earns interest, but you can only withdraw a limited number of times per month. Most people have both: checking for daily expenses, savings for emergencies or goals.