The choice depends on what you use your account for and what costs matter most to you
There is no single best place to open a checking account—it depends on whether you need a physical branch to visit, how much you have to keep in the account, what fees you can tolerate, and whether you want to bank with the same institution that holds your savings or mortgage. A person who deposits checks by phone and never visits a branch has different needs than someone who needs a teller to help with a problem. Start by listing what you actually do with money: deposit paychecks, withdraw cash, pay bills online, transfer funds between accounts. Then match that list to the type of institution.
The lowest-cost account is not always the best fit. A $12 monthly fee at a bank with a nearby branch may cost less than the time and frustration of managing an online account when you need help. You can also open accounts at multiple institutions—many people keep a checking account at one place and savings at another.
Key Takeaways
- Traditional banks offer physical branches and teller service but often charge monthly fees unless you maintain a minimum balance or set up direct deposit.
- Credit unions typically charge lower fees and offer better interest rates on savings, but membership is restricted and branch networks are smaller.
- Online banks have no monthly fees and higher savings rates because they have no physical locations, but you cannot deposit cash or speak to someone in person.
- The lowest-cost account is not always the best fit—a $12 monthly fee at a bank with a nearby branch may cost less than the time and frustration of managing an online account when you need help.
- You can open an account at multiple institutions; many people keep a checking account at one place and savings at another.
Traditional banks: branches, tellers, and monthly fees
A traditional bank is what most people picture: a building with a teller window, a loan officer, and a manager. Banks like Chase, Bank of America, Wells Fargo, and regional institutions like PNC or U.S. Bank have thousands of branches nationwide. If you need to deposit a check in person, withdraw cash without an ATM card, or sit down with someone to resolve a problem, a traditional bank is the straightforward choice.
The trade-off is cost. Most traditional banks charge a monthly maintenance fee—typically $10 to $15—unless you meet one of these conditions: maintain a minimum balance (often $500 to $1,500), set up direct deposit of your paycheck, or keep other accounts at the same bank. Some banks waive the fee if you are over 65 or a student. Read the fine print carefully, because the minimum balance requirement is real: if your account drops below it even once, the fee hits that month. A few traditional banks, like Ally (which operates online but is owned by a traditional bank), offer checking with no monthly fee and no minimum balance, though they have no physical branches.
If you already have a mortgage or savings account at a bank, opening a checking account there often waives the monthly fee. That convenience can be worth more than a slightly lower fee elsewhere. Call the bank directly and ask what fee waivers are available for your situation—the website may not list all of them.
Credit unions: lower fees and better rates, with membership limits
A credit union is a member-owned financial institution, not a for-profit bank. Credit unions typically charge lower fees, pay higher interest on savings accounts, and offer better rates on loans. Many have no monthly checking fee at all, or charge $3 to $5 instead of $12. If you need a physical location and want to avoid high fees, a credit union is often the better deal.
The catch is membership. You cannot straightforward walk into any credit union and open an account. Credit unions serve specific groups: employees of a particular company, members of a union, residents of a certain county, people who work in a particular industry, or members of a religious organization. You have to meet the membership requirement first. To find a credit union you can join, use the CO-OP Network locator or search by your employer, union, or location.
Credit unions also have smaller branch networks than national banks. If you travel frequently or need a branch in multiple states, a credit union may not have locations where you need them. However, most credit unions participate in shared branching networks, meaning you can conduct basic transactions at other credit unions' branches even if you are not a member there. Ask the credit union about its shared branching access before you open an account.
Online banks: no fees, but no branches or cash deposits
An online bank exists only on the internet and through a mobile app. Examples include Ally, Charles Schwab, Discover, and Chime. Online banks have no physical branches, no tellers, and no way to deposit cash directly. In exchange, they charge no monthly fees, no minimum balance requirements, and often pay higher interest on savings accounts because they have no building costs.
Online banks work well if you deposit paychecks by phone or mobile app, pay bills online, and rarely need cash. They are not a good fit if you deposit cash regularly, need to speak to a human quickly, or are uncomfortable managing everything through an app. Some online banks, like Charles Schwab, offer ATM reimbursement nationwide, so you can use any ATM and get the fee back. Others, like Chime, partner with retailers like Walmart and CVS so you can get cash back without a purchase.
If you need to deposit cash, some online banks partner with retailers or ATM networks, but the process is slower and less convenient than walking into a branch. A few online banks have started adding limited in-person services through partnerships, but this is still rare. Before opening an online account, confirm how you will deposit checks and withdraw cash.
Comparing costs across account types
| Account Type | Monthly Fee | Minimum Balance | Physical Branches | Cash Deposits |
|---|---|---|---|---|
| Traditional Bank | $10–$15 (often waived) | $500–$1,500 (varies) | Yes, many | Yes, at teller |
| Credit Union | $0–$5 | Usually none | Yes, fewer locations | Yes, at teller |
| Online Bank | $0 | None | No | Limited or none |
The lowest-cost option is not always the best choice. If you pay $12 per month at a traditional bank but never incur overdraft fees because a teller helps you stay on track, you may spend less than someone who uses a free online account but pays $35 each time they overdraw because they did not notice a pending charge. Similarly, if you live near a credit union branch and can visit in person when you need help, the lower fees may outweigh the convenience of a national bank.
Add up what you actually spend in a year, not just the advertised monthly fee. Include overdraft fees, out-of-network ATM charges, and the cost of your time if you have to travel to a branch or wait on hold with customer service.
What to check before you open an account
Before opening an account anywhere, verify three things. First, confirm the monthly fee structure: what is the base fee, what waives it, and what is the minimum balance if one exists. Second, check the overdraft policy. Some banks charge $35 per overdraft; others charge less or offer overdraft protection that links to a savings account. Third, look at the ATM network. If the bank or credit union has no ATM near your home or work, you will pay out-of-network fees every time you withdraw cash.
You can also call the institution directly and ask a representative to walk you through the fee schedule. Many people find this faster than reading the website, and the representative can answer questions specific to your situation. Ask about any promotions—some banks offer cash bonuses for opening a new account, though these usually come with conditions like maintaining a minimum balance for a set period.
Opening multiple accounts at different institutions
You do not have to choose one institution for everything. Many people open a checking account at a traditional bank or credit union for everyday spending and bill pay, then open a savings account at an online bank for better interest rates. Others keep a checking account at a bank with a nearby branch for emergencies, and a second checking account at an online bank for lower fees on routine transactions.
Opening multiple accounts takes a little longer during setup, but it gives you flexibility. If one institution has a service outage or you have a dispute, you still have access to your money elsewhere. Just keep track of which account is which so you do not accidentally overdraw one while thinking your balance is in another. Use your bank's mobile app or online dashboard to label each account clearly.
Frequently Asked Questions
What if I need a checking account but have a history of overdrafts or bad banking?
Look for a second-chance checking account, offered by some traditional banks and credit unions. These accounts have higher fees but do not require a credit check or ChexSystems report. Online banks typically do not offer second-chance accounts because they have no way to verify identity in person. Call your local credit union or regional bank and ask if they have a second-chance program.
Can I open an account online, or do I have to visit in person?
Most banks and credit unions let you open an account online using your Social Security number, a photo ID, and proof of address. Some still require an in-person visit or a video call with a representative. Check the institution's website or call to confirm before you start the process.
What happens if I want to close my account later?
You can close a checking account at any time by visiting a branch, calling, or submitting a request online. Make sure you have withdrawn all your money and paid any outstanding checks first. Some institutions charge a fee if you close within a certain period (often 90 days), so read the terms before you open.
Do I need a minimum opening deposit?
Most banks and credit unions require a small opening deposit, usually $25 to $100, though some online banks require nothing. This deposit goes into your account and counts toward your balance, so it is not a separate fee.
Should I open an account at the same bank where I have a mortgage or savings?
It can simplify things—many banks waive checking fees if you have other accounts there, and transfers between your accounts are when ready. But it is not required. You can keep your mortgage at one institution and your checking at another if the fees or service are better elsewhere.