Start with what you actually use your account for

The best bank for you depends on how you move money, not on which bank has the most branches or the loudest ads. Before you compare banks, write down what you do with your account: Do you deposit checks by phone? Do you need to withdraw cash three times a week? Do you send money to other people regularly? Do you keep a balance of $500 or $5,000? Do you overdraft sometimes? The answers to these questions matter more than the bank's name.

A bank that charges $35 per overdraft is a bad choice if you overdraft twice a month. A bank with no branches is fine if you never withdraw cash. A bank with high minimum balances is wrong if you have $200 to your name. Match the bank's rules to your actual life, not to what you think you should be doing.

Key Takeaways

  • Overdraft fees, monthly maintenance fees, and minimum balance requirements vary widely between banks and can cost you $200 to $600 per year if they do not match your habits.
  • Online banks typically have lower fees and higher savings rates than brick-and-mortar banks, but you cannot deposit cash in person or speak to someone face-to-face.
  • Credit unions often charge lower fees than national banks and may offer better rates, but you can only join if you meet their membership requirements.
  • Check the bank's ATM network before you open an account — if you need cash frequently and the bank has few ATMs near you, out-of-network fees will add up fast.
  • Read the fee schedule on the bank's website, not the marketing page — the fee schedule lists every charge you might actually pay.

Compare the fees that will actually hit your account

Every bank publishes a fee schedule, usually called a "Schedule of Fees" or "Pricing Information." This is not the same as the marketing page that says "No monthly fees." The fee schedule lists what you actually pay. Look for these specific charges:

Monthly maintenance fees range from $0 to $15 per month, but many banks waive them if you keep a minimum balance (often $500 to $1,500) or set up direct deposit. If you cannot meet the minimum, a bank with no monthly fee is cheaper. Overdraft fees run $25 to $38 per transaction at most banks. If you overdraft once a month, that is $300 to $450 per year. Some banks charge a separate "overdraft protection" fee if you link your account to a savings account to cover overdrafts. Out-of-network ATM fees are usually $2 to $3 per withdrawal. If you use an ATM outside the bank's network twice a week, that is $200 to $300 per year. Check the bank's ATM locator on their website and count how many machines are near your home, work, or places you go regularly.

Insufficient funds fees (charged when you try to send money you do not have) are separate from overdraft fees and can run $25 to $35. Wire transfer fees are typically $15 to $30 if you send money to another bank. Returned deposit fees (charged if a check you deposit bounces) run $5 to $15. If you rarely write checks or use wire transfers, these do not matter. If you do these things regularly, they do.

Decide between online banks, brick-and-mortar banks, and credit unions

Online banks (like Ally, Charles Schwab, or Discover) have no physical branches. You deposit checks by taking a photo with your phone, you withdraw cash at ATMs (usually free at a large network), and you call or email if you have a problem. Online banks almost always have lower fees and higher savings rates than traditional banks because they have no building costs. The trade-off: you cannot walk into a branch, and customer service is by phone or email only. If you rarely need cash and do not mind solving problems without talking to someone in person, an online bank saves you money.

Brick-and-mortar banks (like Chase, Bank of America, or Wells Fargo) have physical branches where you can deposit cash, withdraw money, and speak to a person. They charge higher fees than online banks because they pay for buildings and staff. They make sense if you deposit cash regularly, need to speak to someone in person, or want the security of a familiar local branch. Many also offer online banking, so you get both options.

Credit unions are member-owned cooperatives, not for-profit companies. They often charge lower fees than national banks and pay higher interest on savings. You can only join if you meet their membership requirements — usually you live or work in a specific area, work for a specific employer, or belong to a specific organization. If you may have access to, a credit union is often cheaper than a national bank. Check whether the credit union's ATM network covers places you actually go.

Check the bank's customer service options and hours

If something goes wrong with your account — a fraudulent charge, a missing deposit, an error on your statement — you need to reach the bank quickly. Look at how the bank handles customer service before you open an account. Some banks offer phone support 24 hours a day, 7 days a week. Others have limited hours. Some have live chat on their website. Some only offer email support.

If you work a standard 9-to-5 job and the bank's phone line closes at 5 p.m., you cannot call during your lunch break. If you work nights, a bank that only answers calls during business hours is useless to you. Read the customer service section on the bank's website and note the hours. Call the number yourself and time how long you wait. A bank that answers in two minutes is better than one that puts you on hold for 20.

Look at the savings account rate if you keep money in savings

If you have money sitting in a savings account, the interest rate matters. Savings account rates vary from nearly 0% at some brick-and-mortar banks to 4% to 5% at online banks and credit unions. The difference between 0.01% and 4.5% on $5,000 is roughly $225 per year. If you keep a larger balance, the difference is bigger. Check the current rate on the bank's website — rates change frequently and vary by account type.

A bank with high fees but a high savings rate might still be cheaper than a bank with low fees and a low rate, depending on your balance. If you have $10,000 in savings and plan to keep it there for a year, a 4% rate earns you $400 — enough to offset higher checking fees at that same bank. Do the math for your own situation before you decide.

Test the bank's mobile app and online banking before you commit

Most of your banking will happen on your phone or computer. Before you open an account, download the bank's app or visit the website and look at what you can actually do. Can you transfer money between your own accounts? Can you send money to another person? Can you deposit a check by taking a photo? Can you see your balance and recent transactions? Can you set up bill pay? Some banks make these things easy. Others bury them in menus or charge fees for them.

If the bank's app is slow, confusing, or missing features you need, you will be frustrated every time you use it. Many banks let you open an account online in 10 minutes, so if you hate the app after a week, you can switch. But it is easier to choose right the first time. Spend 15 minutes using the app before you commit — it takes less time than it takes to close an account and move your money later.

Frequently Asked Questions

Does it matter which bank I choose if I just need a place to put my paycheck?

It matters if the bank charges monthly fees or overdraft fees you will actually pay. If you get direct deposit, keep a small balance, and rarely overdraft, a bank with no monthly fee and reasonable overdraft fees is fine. If the bank has an ATM near your work, that is a bonus. Otherwise, the differences are small.

What if I move to a different state — can I keep my account?

Yes. Your account stays open and works the same way. If you chose a brick-and-mortar bank with branches only in your old state, you lose the ability to visit a branch, but you can still use online banking and ATMs. If you chose an online bank or a national bank with branches everywhere, nothing changes. This is worth thinking about if you might move.

Should I open an account at the bank where I have a credit card?

Not necessarily. The bank that offers the best credit card for you might not offer the best checking account. Compare them separately. Some people use one bank for checking and a different one for savings or credit cards — there is no rule against it.

What if I have bad credit or a history of overdrafts — can I still open a bank account?

Yes. Banks do not check your credit score to open a checking account. Some banks use ChexSystems, a checking account history system, and may deny you if you have unpaid overdrafts or fraud on record at another bank. If you are denied, ask which bank reported the problem and dispute it if it is wrong. Some banks specialize in second-chance accounts for people with ChexSystems records — they charge higher fees, but they will open an account.

Is it better to have one bank or multiple banks?

One bank is simpler. Multiple banks can be useful if one offers a great savings rate and another offers a great checking account, or if you want to keep an emergency fund separate from your spending money. The downside is more passwords to remember and more accounts to monitor. Start with one bank and add another only if the first one does not meet your needs.