The best bank for you depends on how you plan to use the account

There is no single "best" bank because different banks serve different needs. A bank that works well for someone who visits a branch weekly will not work well for someone who banks only on their phone. Before you compare banks, think about what matters most to you: whether you need a physical location nearby, whether you want to avoid monthly fees, how you plan to deposit checks, or whether you need customer service in a language other than English.

The three main types of banks are traditional banks (with physical branches), online banks (no branches, everything digital), and credit unions (member-owned, usually smaller). Each has real trade-offs. A traditional bank near your home means you can walk in with questions, but you may pay a monthly fee. An online bank usually has no monthly fee and higher savings rates, but you cannot hand someone cash or a check in person. A credit union often has lower fees and friendlier service, but you can only join if you meet their membership rules.

Key Takeaways

  • Online banks typically charge no monthly fee and have no minimum balance requirement, but you cannot deposit cash in person or speak to someone face-to-face.
  • Traditional banks with branches near you cost more in monthly fees but let you deposit cash, get a cashier's check, or talk to someone in person when you need to.
  • Credit unions often have lower fees and better customer service than large banks, but you can only join if you meet their membership rules — such as working for a certain employer or living in a certain area.
  • The features that matter most are monthly fees, minimum balance requirements, how you will deposit checks, and whether you need a branch location or phone support in your language.

Online banks: no fees, but no branches

Online banks like Ally, Charles Schwab, and Discover have no physical locations. You open the account on your phone or computer, deposit checks by taking a photo, and transfer money electronically. Most online banks charge no monthly fee and have no minimum balance requirement — you can open an account with $1 and keep it open with $0.

The main limitation is cash. If you need to deposit cash, you cannot do it at an online bank. Some online banks partner with ATM networks so you can withdraw cash for free, but depositing cash requires a workaround like buying a money order or using a partner bank's ATM. If you rarely use cash, this is not a problem. If you are paid in cash or prefer to handle money in person, an online bank will frustrate you.

Online banks are a good fit if you have a smartphone, are comfortable using an app, and do not need to deposit cash. They are also a good fit if you want to avoid fees — the trade-off is that you have no branch to visit and no one to talk to in person.

Traditional banks: branches and services, with monthly costs

Traditional banks like Bank of America, Wells Fargo, Chase, and local or regional banks have physical branches where you can walk in. You can deposit cash, get a cashier's check, ask questions in person, and speak to someone if something goes wrong. Many people find this reassuring, especially if banking is new to them.

The cost is a monthly fee. Most large national banks charge $10 to $15 per month for a basic checking account, though some waive the fee if you keep a minimum balance (often $500 to $1,500) or set up direct deposit. Smaller regional banks and community banks often have lower fees or no fee at all. Before you open an account, ask the bank directly what the monthly fee is and what you need to do to avoid it.

A traditional bank is a good fit if you want to deposit cash in person, prefer talking to someone face-to-face, or want a bank with many branches so you can visit one wherever you are. It is also a good fit if you are paid by check and want to deposit it in person rather than by phone. The trade-off is that you will likely pay a monthly fee unless you meet their requirements.

Credit unions: lower fees and personal service, with membership rules

Credit unions are banks owned by their members rather than by shareholders. They are usually smaller than national banks, have lower fees, and are known for better customer service. Many credit unions charge no monthly fee and have no minimum balance requirement.

The catch is membership. You can only open an account at a credit union if you meet their membership rules. Common rules include working for a certain employer, living in a certain county or city, being a student at a certain school, or having a family member who is already a member. Some credit unions have very broad membership (for example, anyone who lives or works in a five-county area), while others are very narrow (only employees of one company). Before you look for a credit union, search online for "credit unions near me" or use the CO-OP network locator to find one you can join.

If you can join a credit union, it is often worth doing. The fees are lower, the service is usually better, and you get the benefit of a physical location. The downside is that credit unions have fewer branches and ATMs than large national banks, so if you travel a lot or move frequently, a national bank might be more convenient.

What to compare when you are choosing between banks

Monthly fees: Ask each bank what the monthly fee is and what you need to do to avoid it. Some banks waive the fee if you keep a minimum balance, set up direct deposit, or use their debit card a certain number of times per month. Write down the exact requirement — do not assume.

Minimum balance: Some banks require you to keep a certain amount of money in the account at all times. If your balance drops below that amount, you may be charged a fee. Online banks almost never have a minimum balance. Traditional banks often do.

How you will deposit checks: If you receive checks, ask how you deposit them. Online banks let you photograph the check with your phone. Traditional banks and credit unions let you deposit in person or by mail. Some traditional banks also let you photograph checks on their app.

ATM access: Ask whether you can withdraw money for free. Some banks have their own ATM network. Others partner with other banks' ATMs. If a bank does not have an ATM near you, you may be charged a fee every time you withdraw cash.

Customer service: Ask how you reach the bank if you have a problem. Can you call, email, chat online, or visit in person? What are the hours? If English is not your first language, ask whether the bank has support in your language.

Debit card: All checking accounts come with a debit card. Ask whether there is a fee to replace it if it is lost or damaged, and whether the bank offers fraud protection if someone uses your card without permission.

How to open an account once you have chosen a bank

Once you have decided on a bank, you can open an account in person, by phone, or online — it depends on the bank. If you open online or by phone, you will need a government-issued photo ID (like a driver's license or passport) and a Social Security number or Individual Taxpayer Identification Number. You may also need to provide your address and phone number.

Some banks ask you to verify your identity by uploading a photo of your ID or by answering security questions about your past. This is normal and takes a few minutes. Once your identity is verified, the account opens when ready, and you can start using it right away.

If you open an account in person at a branch, bring your photo ID and Social Security number. The bank will ask you some questions, verify your information, and give you a debit card on the spot. You can usually start using the account the same day.

Red flags: what to avoid

Avoid banks that charge a fee to open an account, charge a fee to close an account, or charge a fee every time you use your debit card. These are not standard practices, and there are better options available.

Avoid banks that require you to keep a very high minimum balance (more than $2,500) unless you have that money and do not need it for anything else. The fee you save is not worth the money you have to lock up.

Avoid banks that make it hard to reach customer service. If a bank has no phone number, no email, and no way to chat online, you will be stuck if something goes wrong. Test this before you open an account — call the bank's customer service line and see how long you wait.

Frequently Asked Questions

Can I switch banks later if I change my mind?

Yes. You can close your account at any time and open one somewhere else. The bank may ask why you are leaving, but they cannot force you to stay. If you have automatic payments or direct deposit set up, you will need to update those with your new bank information before you close the old account.

Do I need a minimum amount of money to open an account?

Most online banks and credit unions let you open an account with $0 or $1. Some traditional banks require you to deposit $25 to $100 when you open the account. Ask the bank before you explore.

What if I do not have a Social Security number?

If you are not a U.S. citizen, you can use an Individual Taxpayer Identification Number (ITIN) instead. Some banks accept ITINs, but not all. Call the bank and ask whether they will open an account with an ITIN before you visit.

Is my money safe at a small bank or credit union?

Yes, as long as the bank or credit union is insured by the FDIC (Federal Deposit Insurance Corporation) or NCUA (National Credit Union Administration). This means the government guarantees that your money is safe up to $250,000 per account. You can check whether a bank is insured by searching the FDIC or NCUA website.

Should I open accounts at multiple banks?

You can, but you do not need to. One checking account is usually enough. Some people open a second account at a different bank as a backup in case something goes wrong, but this is not necessary if you trust your bank.