A good bank depends on what you actually do with your money

There is no single "best" bank because different banks serve different needs. A bank that works well for someone who keeps $50,000 in savings and rarely moves it may be terrible for someone who deposits paychecks weekly and needs to withdraw cash often. The right choice depends on three things: how much you plan to keep there, how often you move money in and out, and whether you want to do banking in person or online.

Start by listing what matters to you. Do you need a physical branch you can walk into? Do you want the highest interest rate on savings, even if it means banking online only? Do you have a small balance or a large one? Are you willing to pay a monthly fee for extra services, or do you need free checking? Your answers narrow the field from thousands of banks to a handful worth comparing.

Key Takeaways

  • Large national banks offer branches everywhere but often charge monthly fees and pay low interest rates on savings.
  • Online-only banks typically pay higher interest on savings accounts and charge no monthly fees, but you cannot deposit cash or visit a branch.
  • Credit unions may offer better rates and lower fees than banks, but membership rules vary and ATM access depends on their network.
  • The right bank for you depends on whether you need in-person service, how much you plan to save, and how often you move money.
  • Comparing the actual fees, interest rates, and minimum balances at banks you are considering takes 20 minutes and can save you hundreds of dollars per year.

National banks: branches everywhere, but higher fees and lower rates

Large national banks like Chase, Bank of America, and Wells Fargo have thousands of branches and ATMs. If you need to deposit a check or withdraw cash in person, or if you travel frequently and want a bank with locations everywhere, a national bank is convenient. Many people already have accounts at one because their employer uses it or they opened one years ago.

The trade-off is cost and return. Most national banks charge a monthly maintenance fee on checking accounts—typically $12 to $15—unless you meet conditions like keeping a minimum balance or setting up direct deposit. Interest rates on savings accounts are usually very low, often 0.01% or less. Over a year, $10,000 in a national bank savings account might earn $1 or less. You are paying for the convenience of branches, not for growth of your money.

National banks make sense if you need frequent in-person service and the monthly fee is worth it to you. They do not make sense if you are trying to build savings and want your money to earn interest.

Online-only banks: higher interest, no branches, no cash deposits

Online banks like Ally, Marcus, and Discover have no physical locations. You open an account on their website, deposit money by transferring it from another bank, and manage everything through an app or computer. Because they have no branches to maintain, they pass the savings to customers in the form of higher interest rates and no monthly fees.

A savings account at an online bank currently pays between 4% and 5% annually, depending on the bank and the current interest rate environment. That same $10,000 would earn $400 to $500 per year—a real difference. Checking accounts are also free, with no minimum balance required. Many online banks reimburse ATM fees if you use an out-of-network machine, so you can still withdraw cash.

The limitation is that you cannot deposit cash directly. If you are paid in cash or receive cash regularly, you would need to go to another bank to deposit it, then transfer the money to your online account. You also cannot visit a branch to resolve problems in person, though most online banks have phone and email support.

Credit unions: often better rates and lower fees, but with membership rules

A credit union is a member-owned financial institution, not a for-profit bank. Credit unions often pay higher interest on savings and charge lower fees than banks because they are run to benefit members, not shareholders. Some credit unions pay 4% to 5% on savings accounts, similar to online banks, and many have no monthly fees.

To use a credit union, you must be a member. Membership rules vary widely. Some credit unions are open to anyone who lives or works in a certain area. Others require you to work for a specific employer, belong to a certain profession, or be related to a current member. A few allow anyone to join for a small fee. You can search for credit unions you are may be able to access to join on the CO-OP Network website or through the Credit Union Locator tool.

Credit unions also vary in size and technology. A large credit union may have hundreds of branches and a modern app. A small one might have one location and require you to call to move money. Before joining, check whether they have branches or ATMs near you and whether their app works the way you need it to.

How to compare banks side by side

Once you have narrowed your choices to two or three banks, compare these specific numbers:

  • Monthly maintenance fee on checking and savings accounts, and what you must do to waive it (minimum balance, direct deposit, etc.).
  • Interest rate (APY) on savings accounts. This changes over time, but the bank's website shows the current rate.
  • Minimum balance required to open an account and to earn the advertised interest rate.
  • ATM network: how many ATMs you can use for free, and what you pay if you use an out-of-network machine.
  • Overdraft fees if you spend more than you have in your account.
  • Wire transfer fees if you plan to send money to other banks.

Write these down for each bank. Multiply the monthly fee by 12 to see the annual cost. Multiply the interest rate by the amount you plan to keep there to see what you will earn per year. The difference between a bank that charges $15 per month and one that charges nothing, over five years with $5,000 in savings, is $900 in fees alone—plus the interest you would have earned at a higher rate.

When to use a national bank despite the fees

A national bank makes sense in a few specific situations. If you travel internationally and need to withdraw cash in many countries, a large bank's ATM network is valuable. If you need a mortgage or business loan and already have a relationship with a bank, they may offer you a better rate. If you are paid in cash regularly and need to deposit it in person, a national bank with many branches near you saves time.

In these cases, the convenience or service is worth the monthly fee. But if you do not fall into one of these categories, an online bank or credit union will almost always save you money and earn you more interest.

Opening an account and moving your money

Once you have chosen a bank, opening an account takes 10 to 20 minutes online. You will need your Social Security number, a government ID, and your current address. The bank will verify your identity and may check your banking history through ChexSystems, a database that tracks account closures and fraud.

Moving money from your old bank to your new one is simple. You can transfer money electronically using your account numbers, or you can deposit checks using your phone's camera. Some banks offer a service where they contact your old bank and move money for you. Keep your old account open for at least a month after switching, in case a payment or deposit arrives late.

Frequently Asked Questions

Is my money safe at an online bank or credit union?

Yes, as long as the bank is insured by the FDIC (Federal Deposit Insurance Corporation) or the NCUA (National Credit Union Administration). These agencies insure deposits up to $250,000 per account holder per bank. Check the bank's website or call to confirm they carry this insurance. Most do.

Can I have accounts at more than one bank?

Yes. Many people keep a checking account at a national bank for in-person deposits and a high-yield savings account at an online bank to earn interest. You can transfer money between them as needed. Just remember that each bank's FDIC insurance covers up to $250,000, so if you have more than that to save, spread it across multiple banks.

What if I need to deposit cash regularly?

A national bank or credit union with physical locations is your best option. Some online banks partner with retailers like Walmart or CVS to accept cash deposits for a fee, but this is slower and more expensive than a branch. If you receive cash infrequently, you could deposit it at a national bank and transfer the money to your online savings account.

How do I know if a credit union is right for me?

Check whether you are may be able to access to join using the Credit Union Locator. Then visit their website to compare interest rates, fees, and branch locations to banks you are considering. If the rates and fees are better and you can access their ATMs or branches easily, it is worth joining.

Should I close my old bank account right away?

No. Keep it open for at least one month after opening your new account. Payments or deposits may arrive late, and you will need access to your old account to cover them. Once you are sure everything has moved over, you can close it. Call the bank or visit a branch to close the account formally—do not just stop using it.