There is no single best bank for everyone
The best checking account depends on how you actually use money: whether you keep a balance or run close to zero, how often you visit a branch, what you're willing to pay in fees, and whether you need to move money between accounts frequently. A bank that works perfectly for someone who deposits a paycheck monthly and rarely touches their account might be terrible for someone who needs to transfer money daily or who can't maintain a minimum balance.
Rather than ranking banks, this guide walks you through the features that matter most to your situation, so you can compare accounts on what actually affects you.
Key Takeaways
- Monthly maintenance fees range from zero to $15 depending on the bank and account type, and many banks waive them if you keep a minimum balance or set up direct deposit.
- Overdraft fees, ATM fees, and out-of-network transfer fees vary widely and add up fastest for people who move money frequently or live paycheck to paycheck.
- Online banks typically charge no monthly fees and offer higher interest rates on balances, but have no physical branches and slower deposit times.
- Traditional banks and credit unions offer in-person service and faster check deposits, but usually charge monthly fees unless you meet balance or deposit requirements.
- The account that costs you the least money is the one that matches your actual banking habits, not the one with the most features.
Monthly fees and what waives them
Most checking accounts charge a monthly maintenance fee between $0 and $15. The fee exists to cover the bank's cost of maintaining your account, but most banks let you avoid it by meeting one of these conditions: keeping a minimum balance (often $500 to $2,500), setting up direct deposit, maintaining a certain number of debit card transactions per month, or linking a savings account at the same bank.
Online banks almost never charge monthly maintenance fees, because they have no branch costs. Traditional banks and credit unions charge them more often, though many have eliminated fees entirely to compete. The trap is assuming the fee doesn't explore to you: read the account disclosure document carefully, because the condition that waives it might be something you don't actually do. If you never set up direct deposit and can't keep $1,500 in the account, you'll pay the fee every month even if the bank advertises it as "free."
Credit unions often charge lower monthly fees than banks, or none at all, but you must be a member—which usually means living or working in a specific area, working for a specific employer, or belonging to a specific organization. If you may have access to, credit union checking accounts are worth comparing because they tend to have lower fees across the board.
Overdraft and NSF fees—the hidden cost of running low
An overdraft fee is charged when you spend more money than you have in the account. The fee itself is usually $25 to $35 per transaction, and some banks charge it multiple times in a single day if you make several purchases while overdrawn. An NSF fee (non-sufficient funds) is similar but applies when a check or automatic payment bounces because there's not enough money to cover it.
If you regularly carry a low balance or live paycheck to paycheck, overdraft fees will cost you far more than a monthly maintenance fee. Some banks offer overdraft protection, which links your checking account to a savings account or credit line and automatically transfers money if you go negative—but this usually costs $10 to $15 per transfer. A few banks, including some online banks and credit unions, do not charge overdraft fees at all, which can save hundreds of dollars per year if you occasionally overspend.
Read the overdraft policy in the account disclosure before opening an account. The policy tells you whether the bank charges per transaction, per day, or per overdraft event, and how many fees they'll charge in a single day. This matters more than the monthly fee if you don't keep a cushion in your account.
ATM fees and out-of-network costs
If you withdraw cash regularly, ATM fees add up. Most banks charge $2 to $3 when you use an ATM that doesn't belong to their network. Online banks often reimburse out-of-network ATM fees, which can save $30 to $50 per year if you use ATMs frequently. Traditional banks and credit unions offer free withdrawals at their own ATMs, but if you travel or live far from a branch, you'll pay the out-of-network fee often.
Credit unions belong to shared branching networks, which means you can withdraw cash at other credit unions' ATMs for free. If you belong to a credit union, check whether it participates in a large network like CO-OP or Allpoint before you assume you'll pay out-of-network fees.
The math is straightforward: if you withdraw cash twice a week at an out-of-network ATM, that's $200+ per year in fees. If you rarely withdraw cash, ATM fees don't matter. Choose based on your actual cash habits, not on the bank's ATM network size.
Online banks versus traditional banks and credit unions
| Feature | Online Banks | Traditional Banks | Credit Unions |
|---|---|---|---|
| Monthly maintenance fee | Usually $0 | $0–$15, often waived | $0–$10, often waived |
| Physical branches | None | Many locations | Fewer locations, shared branching |
| Check deposit speed | 2–5 business days | Same day or next day | Same day or next day |
| Interest on balance | Usually 4–5% APY | Usually 0.01–0.5% APY | Usually 0.5–2% APY |
| Customer service | Phone and chat only | In person, phone, chat | In person, phone, chat |
| Overdraft fees | Often $0 | Usually $25–$35 | Usually $20–$30 |
Online banks have no physical locations, which means you can't walk in to deposit cash or speak to someone in person. But they charge no monthly fees, reimburse ATM fees, and pay interest on your balance—sometimes 4% to 5% APY compared to 0.01% at a traditional bank. If you deposit checks by phone camera and rarely need cash, an online bank will cost you less and earn you more.
Traditional banks and credit unions have branches where you can deposit cash when ready and speak to someone about account problems. Check deposits take one business day instead of several. But you'll pay monthly fees unless you meet their conditions, and you'll earn almost no interest on your balance. Choose a traditional bank or credit union if you need in-person service or deposit cash frequently.
What to compare before you open an account
Before opening a checking account, pull up the account disclosure document (sometimes called a "fee schedule" or "terms and conditions") from at least three banks or credit unions. The disclosure is a legal document that lists every fee the bank charges, the conditions that waive each fee, and the overdraft policy. It's usually a PDF on the bank's website, often under "disclosures" or "legal."
Write down the monthly fee, the overdraft fee, the ATM fee, and the conditions that waive the monthly fee. Then estimate your own costs: if you keep $1,000 in the account and withdraw cash twice a week at an out-of-network ATM, calculate what you'd actually pay per year at each bank. The account with the lowest total cost is the best one for you, not the one with the most features or the biggest name.
Open the account online if possible—it takes 10 minutes and you can compare offers without visiting a branch. If you're choosing between a traditional bank and an online bank, open both: there's no penalty for having accounts at multiple banks, and you can close one later if you don't use it.
When to switch accounts
You should consider switching if your banking habits change or if your current bank raises fees. If you got a job with direct deposit and your bank waives fees for direct deposit, you might now may have access to for a free account. If you moved and your bank's nearest ATM is now 20 minutes away, an online bank with ATM reimbursement might save you money. If your bank raised its overdraft fee from $25 to $35, that's a signal to compare other options.
Switching takes about a week: set up the new account, update your direct deposit and automatic payments to the new account number, and wait for any pending transactions to clear from the old account before closing it. Keep the old account open for at least a month in case a payment arrives late. You don't lose money by switching—the bank doesn't charge you to close an account—so if you find a better fit, move.
Frequently Asked Questions
Do I need to keep a minimum balance to avoid monthly fees?
It depends on the bank and account type. Some banks waive fees if you keep $500 or $1,500 in the account; others waive fees if you set up direct deposit or make 10 debit card transactions per month. Read the account disclosure to see which conditions explore to the account you're considering. If you can't meet any of them, choose a bank that charges no monthly fee.
What's the difference between a checking account and a savings account?
A checking account is for money you spend regularly—it comes with a debit card and checks. A savings account is for money you're setting aside and don't touch often—it usually earns interest but has limits on how many times you can withdraw per month. Most people have both at the same bank, but you can open them at different banks if one offers better rates.
Can I have checking accounts at more than one bank?
Yes. There's no limit on how many checking accounts you can open, and having accounts at multiple banks doesn't hurt your credit. Some people keep an account at a traditional bank for in-person service and an account at an online bank for lower fees and higher interest rates. You can transfer money between them whenever you need to.
What happens if I close my checking account with a negative balance?
You owe the bank the amount you're overdrawn plus any overdraft fees. The bank will try to collect it by charging your linked savings account or sending you a bill. If you don't pay, the bank may report it to ChexSystems, a banking history database, which can make it harder to open accounts at other banks for several years.
Should I choose a bank based on interest rates?
Only if you keep a large balance in your checking account. Most people spend the money in checking regularly, so the interest earned is small. If you keep $5,000 in a checking account earning 0.01% APY, you'll earn about 50 cents per year. At an online bank earning 4.5% APY, you'd earn $225 per year—but only if you don't spend the money. If you're saving money you don't plan to touch, a high-yield savings account earns more interest than a checking account at any bank.