Yes, where you open a checking account changes what you pay and how you bank
The bank or credit union you choose affects your monthly costs, how easily you can deposit checks, whether you can walk into a branch when you need help, and what happens if you make a mistake. A big national bank, a small local bank, and a credit union can all offer checking accounts, but they work differently and cost different amounts. The choice matters most if you have a low balance, live far from branches, or need to deposit cash regularly.
You are not locked into your first choice. You can move your checking account later, though it takes some work to redirect paychecks and automatic payments. Starting with the right fit saves you that trouble.
Key Takeaways
- National banks charge higher monthly fees but have branches and ATMs everywhere; local banks and credit unions often have lower fees but fewer locations.
- If you keep less than $500 in your account, a credit union or online bank with no minimum balance requirement will cost you less than a traditional bank.
- Credit unions require membership but often offer better rates on savings and loans; you join through your employer, school, or community.
- Online banks have no physical branches but let you deposit checks by phone camera and rarely charge monthly fees.
- Moving a checking account is possible but requires updating your direct deposit, automatic bill payments, and any recurring subscriptions.
What national banks charge and what you get for it
Large national banks like Chase, Bank of America, and Wells Fargo charge a monthly maintenance fee — usually $10 to $15 — unless you meet conditions like keeping a minimum balance or setting up direct deposit. That minimum is often $500 to $1,500. If you fall below it, you pay the fee every month.
In return, you get thousands of branches and ATMs across the country. If you travel, move, or need to walk into a physical location to solve a problem, a national bank makes that straightforward. Their customer service lines are staffed 24 hours. They offer online banking, mobile apps, and debit cards that work everywhere.
For someone with steady income, a job that uses direct deposit, and a balance that stays above the minimum, a national bank is straightforward. For someone living paycheck to paycheck or without direct deposit, the monthly fee becomes expensive.
Local banks and credit unions: lower fees, fewer locations
A local bank is a bank that operates in one state or region, not nationwide. Credit unions are member-owned financial cooperatives — you join rather than straightforward open an account. Both typically charge lower monthly fees than national banks, and both often waive the fee if you keep a smaller minimum balance or set up direct deposit.
The trade-off is location. A local bank might have 20 branches instead of 5,000. A credit union might have 10. If you need to deposit cash, transfer money in person, or speak to someone face-to-face, fewer locations means more travel. However, most credit unions belong to a shared branching network — you can walk into a different credit union and use their services as if it were your own. This expands your access without your bank having to own every branch.
Credit unions often offer better interest rates on savings accounts and lower rates on loans. They also tend to be more flexible with people who are new to banking or have had past money problems. If you have a local credit union through your employer, school, or community group, it is worth comparing their checking account to what a national bank charges.
Online banks: no branches, no monthly fees
Online banks like Ally, Charles Schwab, and Chime exist only on your phone or computer. They have no physical branches. In exchange, they almost never charge monthly fees, do not require a minimum balance, and often pay higher interest on savings.
The main limitation is depositing cash. Online banks cannot take cash deposits because they have no tellers. You can deposit checks by taking a photo with your phone — most online banks offer this. But if you need to deposit cash regularly, an online bank alone will not work. You would need a second account at a bank or credit union that takes cash.
Online banks work best for people who get paid by direct deposit, pay bills online, and rarely need cash. They also work well as a second account — you might keep your main checking at a local bank for cash deposits and use an online bank for savings because of the higher interest rate.
How location affects your daily banking
Think about what you actually do with your checking account. Do you deposit checks? How often? Do you need to deposit cash? Do you withdraw cash at ATMs, or do you use your debit card? Do you ever need to talk to someone in person?
If you deposit checks once a month and use your debit card for everything else, location barely matters — an online bank works fine. If you deposit cash every week and live in a rural area, you need a bank with a branch near you or a credit union in a shared network. If you travel for work, a national bank's ATM network saves you fees that other banks would charge.
The cost of being in the wrong location is real. A $3 ATM fee charged four times a month is $144 a year. A $12 monthly fee for not meeting a minimum balance is $144 a year. These add up, especially on a small account.
What happens when you move your account
You can close a checking account at one bank and open one at another. The process itself is straightforward — you fill out paperwork or do it online, and the old account closes. The hard part is updating everything that depends on that account.
Before you close the old account, you need to change your direct deposit with your employer or benefits provider. You need to update automatic bill payments — your electric bill, rent, insurance, subscriptions. You need to update any apps or services that charge your debit card. Missing one can cause a payment to bounce or go to the wrong place.
Most banks will let you keep an old account open for 30 days while you make these changes. Some will let you keep it longer. Ask before you close it. Once it is closed, any payment sent to that account number will fail.
Choosing based on your situation
If you have a job with direct deposit and keep a balance above $500, a national bank is convenient and the fee is straightforward to avoid. If you are paid in cash, work irregular hours, or keep a low balance, a credit union or online bank will cost you less. If you need to deposit cash regularly but live far from banks, a credit union with shared branching is worth joining.
You do not need to choose perfectly. You can start with one bank, see how it works for three months, and switch if it does not fit. The switching process is annoying but not difficult. What matters is that you understand what each type of bank offers and what it costs you.
Frequently Asked Questions
Can I have checking accounts at more than one bank?
Yes. Many people keep a checking account at a local bank for deposits and a second account at an online bank for savings or a backup. There is no rule against it. Just make sure you can track both accounts and remember which one your direct deposit goes to.
What if I do not have direct deposit?
You can still open a checking account. You will not be able to waive the monthly fee at most national banks by using direct deposit, so you would need to meet a minimum balance instead. A credit union or online bank is often cheaper if you do not have direct deposit.
Do I need a credit union membership to open a checking account there?
Yes, but membership is usually free or costs $1 to $5 one time. You become a member when you open the account. Most credit unions let you join if you live or work in their area, go to their school, or belong to a group they serve.
What if I move to a different state?
A national bank account works the same in every state. A local bank account may stop working if you move out of their region — you would need to close it and open one elsewhere. A credit union account usually stays open, but you lose branch access unless you join a shared branching network.
Is it safer to bank with a big national bank?
No. All banks and credit unions insured by the FDIC or NCUA protect your money up to $250,000 if the bank fails. Size does not make a bank safer. A small local bank with FDIC insurance is just as protected as a large national bank.