What makes a checking account worth opening

A good checking account for you depends on how you actually use money—whether you need to visit a branch in person, how often you move money between accounts, what you pay in fees, and whether you want a human to call when something goes wrong. No single bank is best for everyone. A bank that works well for someone who gets paid twice a month and rarely travels might be terrible for someone who moves money constantly or lives in a rural area.

The real differences between banks show up in three places: what they charge you, where you can access your money, and how fast they move it. A bank with no monthly fee but slow transfers might cost you more in the long run than one with a small fee and next-day processing. A bank with thousands of branches means nothing if none are near you.

Key Takeaways

  • Traditional banks like Chase, Bank of America, and Wells Fargo have physical branches everywhere but often charge monthly fees unless you meet balance or deposit requirements.
  • Online-only banks like Ally, Charles Schwab, and Discover typically charge no monthly fees and pay interest on checking balances, but you cannot deposit cash in person.
  • Credit unions often charge lower fees and offer better customer service than large banks, but you can only join if you meet membership requirements tied to your employer, location, or community.
  • The cheapest account for you depends on whether you need branches, how much you keep in the account, and whether you can deposit checks by phone or mail instead of in person.

Large national banks with branch networks

Chase, Bank of America, and Wells Fargo have the most physical locations in the United States. If you need to deposit cash, withdraw cash, or talk to someone face-to-face, a branch network matters. Chase has roughly 4,700 branches. Bank of America has roughly 3,600. Wells Fargo has roughly 7,000. These numbers change, but the point is: if you live in a city or suburb, you can almost certainly find one of these banks within a few miles.

All three charge a monthly maintenance fee—usually $10 to $15—unless you meet conditions. Chase waives the fee if you keep $500 in the account or set up direct deposit. Bank of America waives it if you keep $1,500 or set up direct deposit. Wells Fargo waives it if you keep $500 or set up direct deposit. If you cannot meet those conditions, you pay the fee every month. Over a year, that is $120 to $180 you do not get back.

These banks move money at standard speed: transfers between accounts at the same bank usually happen the same day or next day. Transfers to other banks take one to three business days. They all offer mobile apps and online banking. Customer service is available by phone, but wait times are often long, especially during business hours.

Online-only banks with no physical branches

Ally, Charles Schwab, Discover, and Marcus (by Goldman Sachs) have no branches. You cannot walk in and deposit cash. You cannot sit down with a banker. What you get instead is no monthly fee, no minimum balance requirement, and interest paid on your checking balance—usually 0.01% to 0.50%, depending on the bank and the current interest rate environment.

Ally and Charles Schwab reimburse ATM fees charged by other banks, which means you can use almost any ATM in the country without paying out of pocket. Discover and Marcus do not reimburse fees, so you have to find their ATM network or pay $2 to $3 per withdrawal. For someone who rarely uses cash, this does not matter. For someone who withdraws cash weekly, it adds up.

Depositing checks works by taking a photo of the front and back with your phone and uploading it through the app. Most banks process mobile deposits within one business day. Depositing cash is harder: some online banks let you deposit cash at partner retailers like Walmart or CVS for a small fee, but not all do. If you need to deposit cash regularly and cannot use a partner location, an online bank will not work for you.

Customer service at online banks is usually by phone, email, or chat. Wait times are often shorter than at large national banks because they have fewer customers overall, but you cannot walk into a location if you need help in person.

Credit unions and smaller regional banks

Credit unions are member-owned financial institutions, not corporations. They often charge lower fees and pay better interest rates than large banks because they return profits to members instead of shareholders. Many credit unions charge no monthly fee and no minimum balance. Some pay 0.25% to 1.00% interest on checking balances, which is higher than most banks offer.

The catch: you can only join a credit union if you meet membership requirements. Some are open to anyone who lives or works in a specific county. Others are open only to employees of a specific company, members of a specific organization, or people in a specific industry. Navy Federal Credit Union, for example, is open to military members and their families. Teachers Credit Union is open to educators. If you do not meet the requirement, you cannot open an account, no matter how good the rates are.

Credit unions typically have fewer branches and ATMs than large banks, but many participate in shared branching networks that let you use other credit unions' branches. Some also reimburse ATM fees like online banks do. Customer service is usually by phone or in person, and wait times tend to be shorter than at large banks.

Regional banks like PNC, U.S. Bank, and TD Bank operate in specific parts of the country rather than nationwide. They usually have lower fees than the largest banks and more branches than online banks, but only in their service areas. If you live in the Northeast, TD Bank has thousands of branches. If you live in the Southwest, it has almost none.

How to choose based on your actual situation

Start by answering three questions: Do you need to deposit cash in person? How much money do you usually keep in the account? Do you move money between banks often?

If you deposit cash regularly and need to do it in person, a large national bank or credit union with branches is your only option. Online banks will not work. If you can deposit checks by phone and rarely use cash, an online bank will save you money on fees and pay you interest.

If you keep less than $500 in your checking account most of the time, the monthly fee at a large bank will hurt. An online bank or credit union with no minimum balance is better. If you keep $2,000 or more, you can meet the balance requirement at a large bank and avoid the fee.

If you move money between your own accounts at different banks frequently, Charles Schwab's next-day transfers and ATM reimbursement make it worth the lack of branches. If you rarely move money, the speed does not matter as much.

What to check before you open an account

Before you commit, look up the bank's current fee schedule and interest rate. Banks change these regularly, and what was true six months ago might not be true now. Check whether there is a branch or ATM near your home and work. Call customer service with a question and time how long you wait—this tells you what service will actually be like.

Read the fine print on how they calculate interest if they pay it. Some banks pay interest only on balances above a certain amount. Some pay it only if you meet other conditions, like setting up direct deposit. Some pay it only if you use their debit card a certain number of times per month. These conditions can wipe out the benefit of the interest rate.

Check what happens if your account goes negative. Some banks charge an overdraft fee every time you spend more than you have. Some let you link a savings account and pull money automatically. Some straightforward decline the transaction. The overdraft policy can cost you hundreds of dollars a year if you are not careful.

Frequently Asked Questions

Is it better to bank online or at a physical bank?

Online banks are cheaper if you do not need to deposit cash in person and do not need to talk to someone face-to-face. Physical banks are better if you deposit cash regularly or prefer to handle problems in person. Many people use both—an online bank for savings and a physical bank for checking.

What if I have bad credit or a banking history problem?

Large national banks and online banks usually check ChexSystems, a database of banking problems. If you are in ChexSystems, they may deny you. Credit unions and some smaller banks are more lenient. Call ahead and ask whether they check ChexSystems before you explore.

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

It depends on the bank. Online banks and most credit unions have no minimum. Large national banks usually waive fees if you keep $500 to $1,500 or set up direct deposit. Check the specific bank's requirements before you open an account.

Can I switch banks if I already have an account somewhere else?

Yes. You can open a new account at any time and move your money over. The new bank can help you set up automatic transfers from your old account. You do not have to close the old account when ready, but you should once all your payments and deposits have switched over.

Which bank pays the most interest on checking?

Interest rates change constantly and vary by bank. As of now, some online banks and credit unions pay 0.25% to 1.00%, while large national banks typically pay 0.01% or less. Check current rates on each bank's website before you decide, because the difference can change month to month.