The best bank for you depends on how you use money, not on which bank is "best" in general.

A bank that works well for someone who keeps $50,000 in savings and rarely visits a branch will frustrate someone who deposits cash weekly and needs a teller. A bank with no monthly fees but limited ATM access might suit a person who uses online banking exclusively, but not someone who travels and needs ATMs everywhere. Before comparing interest rates or branch counts, write down what you actually do with your money: How often do you deposit cash? Do you need to speak to someone in person? How much do you keep in checking versus savings? Do you travel? Are you building credit or recovering from debt?

The answer to "best bank" is the one that charges you the least in fees, pays you the most in interest on what you save, and makes the transactions you do most often as frictionless as possible.

Key Takeaways

  • Monthly maintenance fees, overdraft fees, and minimum balance requirements vary widely between banks, so compare what you will actually pay based on your account balance and transaction habits.
  • Banks with physical branches charge higher fees and pay lower interest rates than online-only banks, so choose based on whether you need in-person services.
  • ATM networks matter only if you use ATMs regularly; if you do, check whether the bank reimburses out-of-network fees or has branches where you live and work.
  • Interest rates on savings accounts and money market accounts change frequently, so compare current rates across multiple banks rather than relying on historical data.
  • Credit unions often charge lower fees than banks and may offer better rates, but membership is restricted to specific groups (employers, unions, geographic areas, or professions).

How fees affect which bank costs you the least

Monthly maintenance fees are the easiest cost to see and the easiest to avoid. Many banks waive the fee if you keep a minimum balance (often $500 to $2,500), set up direct deposit, or maintain a linked savings account. If you cannot meet those conditions, choose a bank with no monthly fee at all. Online banks like Ally, Charles Schwab, and Discover typically charge no monthly maintenance fee regardless of balance.

Overdraft fees are where banks make money from people who run short. A single overdraft can cost $30 to $35. Some banks charge multiple overdraft fees per day if your account stays negative. Others offer overdraft protection, which links your checking account to savings or a line of credit and transfers money automatically. A few banks (Ally, Charles Schwab, some credit unions) do not charge overdraft fees at all. If you live paycheck to paycheck, this matters more than the interest rate on savings.

ATM fees add up if you use out-of-network machines. A bank with 500 branches nationwide may have an ATM near you; a bank with 50 branches may not. Online banks often reimburse out-of-network ATM fees (Charles Schwab reimburses all of them worldwide), while traditional banks charge $2 to $3 per withdrawal. If you use ATMs five times a month, that is $10 to $15 monthly in fees — more than many monthly maintenance charges.

Interest rates: what you earn on savings and money market accounts

Banks that operate only online have lower overhead costs and pass some of that savings to customers in the form of higher interest rates. As of early 2024, online savings accounts pay between 4% and 5% annual percentage yield (APY), while traditional banks often pay 0.01% to 0.5%. The difference compounds: $10,000 in a 4.5% account earns $450 per year; the same $10,000 in a 0.5% account earns $50.

Interest rates change frequently and are set by each bank independently, so do not rely on a rate you read last month. Check the current rate on the bank's website before opening an account. Money market accounts (which function like savings accounts but may require a higher minimum balance) sometimes pay slightly higher rates than regular savings accounts at the same bank.

The trade-off is access: online banks have no physical branches, so if you need to deposit cash or speak to someone face-to-face, you cannot. Some online banks partner with ATM networks or allow mobile check deposit to reduce this friction.

When you need a physical branch versus online-only banking

If you deposit cash regularly, you need either a physical branch or a bank that accepts cash deposits through partner locations. Most online banks do not accept cash deposits at all. If you do deposit cash, traditional banks and credit unions are your only option.

If you rarely or never deposit cash, use direct deposit for paychecks, and pay bills online, an online bank will save you money in fees and earn you more in interest. You will never visit a branch, so paying for one through higher fees makes no sense.

If you are somewhere in between — you deposit cash occasionally but mostly use online banking — look for a hybrid: a traditional bank with low fees and reasonable interest rates, or an online bank that partners with retailers (some online banks let you deposit cash at CVS or Walmart). Charles Schwab Bank, for example, is online-first but reimburses all ATM fees, which gives you access to any ATM network.

Credit unions versus banks: membership and rates

Credit unions are member-owned financial cooperatives that often charge lower fees and pay higher interest rates than banks. They typically do not charge monthly maintenance fees, and overdraft fees are often lower or nonexistent. However, credit union membership is restricted: you must work for a specific employer, belong to a union, live in a specific geographic area, or work in a specific profession.

To learn about you are may be able to access for a credit union, search the CO-OP Network or Shared Branch network websites, which list credit unions by employer, location, and affiliation. If you are may be able to access, compare the credit union's rates and fees to the banks you are considering. Credit unions often win on fees but may have fewer ATMs or branches than large banks.

How to compare banks side by side

Create a simple table with the banks you are considering and list the fees and rates that matter to you: monthly maintenance fee, overdraft fee, minimum balance requirement, ATM network size, current savings APY, and current money market APY. Do not include features you will not use (business banking, investment accounts, wealth management). Visit each bank's website directly to get current rates and fee schedules; do not rely on comparison sites, which may be outdated.

Calculate your actual cost for one year. If you keep $5,000 in checking and $10,000 in savings, use overdraft twice a year, and use out-of-network ATMs four times a month, add up the fees you would pay at each bank. Then add the interest you would earn on your savings. The bank with the lowest total cost is the best one for you.

Red flags when choosing a bank

Avoid banks that charge monthly fees you cannot waive without meeting conditions you cannot meet. Avoid banks that charge overdraft fees on top of overdraft fees (some charge one fee per transaction and another per day). Avoid banks that advertise a high interest rate but bury the fine print that the rate applies only to balances above $100,000 or only for the first month.

Check the bank's complaint history on the Consumer Financial Protection Bureau (CFPB) website. A bank with thousands of complaints about unauthorized fees or difficulty closing accounts is a sign to look elsewhere. Read recent reviews on independent sites like Trustpilot or Bankrate, but remember that people are more likely to leave reviews when they are angry, so take the tone with a grain of salt.

Frequently Asked Questions

Can I have accounts at multiple banks?

Yes. Many people keep a checking account at a traditional bank with branches (for cash deposits and in-person service) and a savings account at an online bank (for higher interest rates). There is no limit to how many accounts you can open, though each bank will run a credit check and report the account to credit bureaus.

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

Some banks use ChexSystems, a banking history report, to decide whether to open an account for you. If you have unpaid overdrafts or closed accounts due to negative balances, you may be denied. Second-chance banking programs exist at some banks and credit unions specifically for people in this situation. Ask your local credit union or search for "second chance checking" in your area.

Do I need to keep a minimum balance?

Most banks waive monthly fees if you keep a minimum balance, but you can choose a bank with no monthly fee and no minimum instead. Online banks almost always have no minimum. If you cannot maintain a minimum, do not open an account at a bank that requires one.

Is my money safe if the bank fails?

Yes, as long as the bank is insured by the Federal Deposit Insurance Corporation (FDIC). All banks are required to display the FDIC logo. Your deposits up to $250,000 per account type (checking, savings, money market) are protected. Credit unions are insured by the National Credit Union Administration (NCUA) with the same $250,000 limit.

Should I switch banks if I find a better rate?

If the rate difference is significant (more than 1% APY) and you have a substantial savings balance, switching may be worth it. The process takes about a week: open the new account, transfer money, and close the old one. If your balance is small or the rate difference is tiny, the hassle may not be worth it. Calculate whether the extra interest you would earn in a year exceeds the time cost of switching.