Start with the fees that will actually hit your account

Most banks charge a monthly maintenance fee unless you meet certain conditions — usually a minimum balance, direct deposit, or a certain number of debit card transactions per month. Before you open an account, find out what that fee is and what you have to do to avoid it. A $12 monthly fee sounds small until you realize it's $144 a year, and some banks charge $25 or more.

Beyond the monthly fee, look for overdraft fees (what you pay if you spend more than you have), ATM fees (especially if you travel or live far from branches), and fees for things like wire transfers, cashier's checks, or closing the account early. Some banks charge $30 to $35 per overdraft. Others charge nothing if you link a savings account or credit card to cover the gap. Write down the fees from three or four banks side by side so you can actually compare them.

Ask whether the bank refunds ATM fees from other banks' machines. Some do; some don't. If you use ATMs often and the bank has few branches near you, this matters more than the monthly fee.

Key Takeaways

  • Monthly maintenance fees range from $0 to $25 or more, and most banks waive them if you keep a minimum balance or set up direct deposit.
  • Overdraft fees, ATM fees, and wire transfer fees vary widely between banks and can add up to more than the monthly charge if you use those services.
  • The bank's branch and ATM network should match where you actually live and work, not where you think you might go someday.
  • Online banks typically have lower or no monthly fees but offer no physical branches, so choose based on whether you need to deposit cash or talk to someone in person.
  • Interest rates on checking accounts are usually near zero, but some banks and credit unions offer slightly higher rates if you meet balance or activity requirements.

Decide whether you need a physical branch or an online bank

If you deposit cash regularly, need to speak to someone face-to-face, or want to get a cashier's check without planning ahead, you need a bank with physical branches. Traditional banks and credit unions have them. Online banks do not, and they typically charge you to deposit cash through third-party networks or don't let you do it at all.

Online banks almost always have lower fees and no monthly maintenance charge because they have no branches to staff. If you pay bills online, use direct deposit, and rarely need cash, an online bank can save you money. But if you're the kind of person who gets paid in cash or needs to deposit checks by hand, a local or regional bank or credit union is more practical.

Check the bank's branch and ATM map before you decide. If the nearest branch is 20 miles away, that's not useful to you even if the fees are low. Credit unions often have shared branching networks, which means you can use branches from other credit unions in their network — this can give you more locations without the bank having to own them all.

Compare interest rates if you keep a balance

Most checking accounts pay almost no interest — often 0.01% or less. But some online banks, credit unions, and a few traditional banks offer rates between 0.5% and 5% if you meet their requirements. Those requirements usually include keeping a minimum balance (sometimes $500, sometimes $25,000), setting up direct deposit, or making a certain number of debit card transactions per month.

The higher rates are real money only if you keep a large balance. If you have $10,000 in the account and earn 1% interest, that's $100 a year. If you have $500, it's $5. But if you're the type to keep several thousand dollars in checking anyway, comparing rates can be worth a few minutes of research.

Online banks and credit unions tend to offer better rates than big national banks. Ask the bank what the current rate is and whether it changes with the Federal Reserve rate — some banks lower their rates when the Fed cuts rates, and some don't raise them when the Fed raises rates.

Look at the bank's mobile app and online tools

You'll use the bank's app or website to check your balance, transfer money, and deposit checks by phone camera. If the app is slow, crashes often, or makes simple tasks take five steps, you'll notice it every week. Download the app and try it before you open the account if you can, or read recent reviews from people who actually use it.

Check whether the bank offers mobile check deposit (taking a photo of a check to deposit it) and whether it works reliably. Some banks limit how many checks you can deposit this way per month or per day. If you get paid by check, this feature saves you a trip to the branch.

Also look at whether you can set up bill pay through the bank's system and whether it's free. Some banks charge $5 to $10 per month for bill pay; others include it at no cost. If you pay 10 bills a month by hand, bill pay through the bank saves time and reduces the chance of a check getting lost.

Understand what happens if you need customer service

Call the bank's customer service number and see how long you wait and whether a person answers. Some banks have 24/7 phone support; others have limited hours. If you work nights or weekends, limited hours might mean you can't reach anyone when you need help.

Ask whether the bank has a local branch where you can walk in and talk to someone, or whether all support is by phone, email, or chat. If something goes wrong with your account — a fraudulent charge, a missing deposit, a fee you don't understand — being able to walk into a branch and sit down with someone can resolve it faster than email back-and-forth.

Check the bank's complaint history with the Consumer Financial Protection Bureau (CFPB). You can search by bank name on their website and see what kinds of complaints people have filed and how the bank responded. This won't tell you everything, but it gives you a sense of whether the bank has a pattern of problems.

Consider whether you want a traditional bank, credit union, or online bank

Traditional banks are for-profit companies owned by shareholders. They tend to have more branches and ATMs, but higher fees. Credit unions are nonprofit cooperatives owned by their members. They often have lower fees and better customer service, but fewer branches unless they're part of a shared branching network. Online banks have the lowest fees and sometimes the best rates, but no physical locations.

If you're part of a credit union already (through your employer, your school, or a family member), you might have access to better rates and lower fees than a traditional bank. If you're not a member of a credit union, you can search for one you're may be able to access to join on the CO-OP network website or by asking at your workplace.

There's no single right answer — it depends on whether you value convenience (branches), low cost (online banks), or community (credit unions). Write down what matters most to you, then compare banks that fit that priority.

Check the bank's deposit insurance and security

All banks insured by the Federal Deposit Insurance Corporation (FDIC) protect your deposits up to $250,000 per account type per bank. Credit unions insured by the National Credit Union Administration (NCUA) offer the same protection. Before you open an account, confirm that the bank or credit union has this insurance — it's usually listed on their website.

Ask about the bank's security features: do they offer two-factor authentication (a code sent to your phone when you log in from a new device), fraud monitoring, and zero-liability protection if someone uses your debit card without permission? Most banks offer these now, but the details vary. Some banks refund fraudulent charges immediately; others investigate first and refund later.

If you have more than $250,000 to deposit, you can split it across multiple banks or multiple account types (checking, savings, money market) at the same bank, and each portion is insured separately. Ask the bank how to structure your accounts if you're in this situation.

Frequently Asked Questions

Do I need to keep a minimum balance to avoid fees?

Most banks waive their monthly fee if you keep a minimum balance, though the amount varies — it might be $500, $1,500, or $25,000. Some banks waive the fee if you set up direct deposit instead, which doesn't require a balance. Read the fee schedule carefully to see which option works for you.

Can I switch banks if I change my mind?

Yes. You can close the account anytime, though some banks charge a fee if you close within a certain period (often 90 days). You'll need to move your direct deposits and automatic payments to the new bank, which takes a few days. The old bank will close the account once the balance is zero.

What's the difference between a debit card and a credit card?

A debit card pulls money directly from your checking account when you use it. A credit card borrows money from the card company, and you pay it back later. Most checking accounts come with a debit card; credit cards are separate products you request from a bank or credit card company.

Should I open a savings account at the same bank as my checking account?

It's convenient to have both at the same place, but not required. Some banks offer better rates on savings accounts than others. You can keep your checking account at one bank and your savings account at another if the savings bank has a better rate. Just make sure both are FDIC or NCUA insured.

What if the bank I choose goes out of business?

If the bank fails and is FDIC insured, your deposits up to $250,000 are protected and will be transferred to another bank or paid to you. This has happened to a small number of banks over the years, but your money is safe as long as the bank displays the FDIC logo.