Start with what you actually need the account to do

The best account for you depends on how you plan to use it, not on which bank has the flashiest app. Before you compare banks, write down what matters: Do you need to deposit checks? Will you use an ATM regularly, and if so, which ones? Do you want to avoid monthly fees, or are you willing to pay for extra features? How often do you expect to visit a branch in person?

Most people starting out need one of two things: a checking account for everyday spending and bill payments, or a savings account for money you want to set aside and grow. Some banks bundle them together; others let you open them separately. The choice between them is not about the bank — it is about your purpose for the money.

Once you know what you need, the bank's features matter much more than its name or size. A large national bank and a small local credit union can both serve you well; they just work differently.

Key Takeaways

  • Choose between a checking account for daily spending or a savings account for money you want to keep separate, or open both at the same bank.
  • Monthly fees, ATM access, and minimum balance requirements vary widely — compare these three things first before looking at anything else.
  • Banks, credit unions, and online-only banks all work differently: banks have branches and ATMs everywhere, credit unions are smaller and member-owned, and online banks have no physical locations but often lower fees.
  • You will need a government-issued ID and proof of address (like a utility bill or lease) to open an account, whether you do it in person or online.
  • Start with one account at one institution; you can always add more accounts or switch banks later if your needs change.

The three types of banks and how they differ

Traditional banks are what most people picture: they have physical branches and ATMs, they are for-profit companies, and they serve anyone who walks in. You can deposit checks in person, talk to someone face-to-face, and withdraw cash from thousands of ATMs. The trade-off is that they often charge monthly fees unless you keep a minimum balance or set up direct deposit.

Credit unions are member-owned cooperatives, not for-profit. You join by opening an account, and the profits go back to members through lower fees and better interest rates. They tend to be smaller and have fewer branches and ATMs than big banks, but they often have lower monthly fees and are more willing to work with people new to banking. If you have a job, a family member in a credit union, or live in a certain area, you may already be able to join one.

Online-only banks have no physical branches or ATMs of their own. You open an account on their website, deposit checks by taking a photo with your phone, and withdraw cash at ATMs that partner banks operate. They have the lowest fees because they do not pay for buildings and staff, but you cannot walk in and talk to someone. They work best if you are comfortable managing money on your phone or computer.

Monthly fees, minimum balances, and ATM access

These three things cost you real money, so compare them across any banks you are considering. Monthly maintenance fees range from zero to fifteen dollars or more, depending on the account type and the bank. Many banks waive the fee if you keep a certain balance in the account (often $500 to $1,500) or set up direct deposit of your paycheck. Ask the bank directly what it takes to avoid the fee — the answer changes by account type.

Minimum balance requirements mean you have to keep at least a certain amount of money in the account at all times, or you pay a fee or lose interest. Some accounts have no minimum; others require $100 or $500 or more. If you are starting out with very little money, look for an account with no minimum balance requirement.

ATM access matters if you withdraw cash regularly. Big banks have ATMs everywhere; credit unions and online banks have fewer. Some online banks partner with networks of ATMs (like Allpoint or MoneyPass) so you can withdraw cash at thousands of locations, including grocery stores and pharmacies. If you live in a rural area or travel often, ask about ATM networks before you open an account.

Interest rates on savings accounts

If you open a savings account, the bank pays you a small amount of money (called interest) for letting them use your money. The rate varies widely — from nearly zero at some banks to two or three percent or higher at online banks. The difference adds up over time, especially if you are saving a larger amount.

Interest rates change constantly, so do not choose a bank based on today's rate alone. Instead, look at which banks have historically offered competitive rates and check their current rate before you open the account. Online banks almost always pay more interest on savings than traditional banks, because they have lower costs.

For a checking account, interest is usually not a factor — most checking accounts pay zero interest, whether you have $100 or $10,000 in them. Some banks offer checking accounts with interest, but the rate is usually very low.

What you need to bring to open an account

Whether you open an account in person or online, you will need to prove who you are and where you live. Bring a government-issued ID (a driver's license, passport, or state ID card) and proof of address (a utility bill, lease agreement, or recent bank statement with your name and address on it). If you do not have a utility bill or lease, ask the bank what other documents they accept — some take a phone bill or a letter from a government agency.

If you are opening an account online, you will upload photos of these documents or answer security questions to prove your identity. The process usually takes a few minutes, and you can start using the account the same day or within one business day.

If you are opening an account in person, bring the originals. The bank will make copies and you will walk out with your account number and debit card information the same day, though the physical card arrives by mail in five to ten business days.

Checking account features that matter

If you are opening a checking account, pay attention to overdraft protection and check-writing. Overdraft protection means the bank covers a purchase or check if you do not have enough money in the account, but charges you a fee (usually $30 to $35) for doing so. Some banks offer overdraft protection linked to a savings account, so the bank transfers money from savings instead of charging a fee. Others let you opt out of overdraft protection entirely, which means a purchase will straightforward be declined if you do not have the money — no fee, but also no purchase.

Check-writing is less common than it used to be, but if you need to write checks (for rent, utilities, or other bills), make sure the account comes with a checkbook or the ability to order one. Most banks include checks for free or a small fee.

Debit card access is standard at all banks — you get a card linked to your checking account that you can use to buy things or withdraw cash. Ask whether the bank charges a fee for using an out-of-network ATM (an ATM that does not belong to the bank). Some banks charge $2 to $3 per transaction; others charge nothing.

How to actually compare banks side by side

Once you have narrowed down your choices to two or three banks, create a straightforward table with the features that matter to you. List the monthly fee, the minimum balance, the ATM network, the interest rate (if it is a savings account), and any other features you care about. This takes ten minutes and makes the choice much clearer.

Call or visit the bank's website and ask questions if anything is unclear. Banks expect these questions and can usually answer them in a few minutes. If a bank is hard to reach or does not answer your questions clearly, that is a sign to look elsewhere.

Do not worry about making a perfect choice. You can always open a second account at a different bank later, or switch banks entirely if your needs change. Most people do this at least once in their lives, and it is not complicated.

Frequently Asked Questions

Do I need to have a job to open a bank account?

No. You need a government-issued ID and proof of address, but not a job. Some banks ask about income on the process form, but they do not require you to have a job or a certain income level. If a bank refuses to open an account for you, try a credit union or an online bank — they often have fewer restrictions.

What if I do not have a permanent address?

This is harder but not impossible. Some banks accept a shelter address, a PO box, or a letter from a social service agency as proof of address. Call ahead and ask what the bank will accept before you go in. Credit unions and community banks are often more flexible than large national banks on this issue.

Can I open an account online if I do not have a computer?

You can open an account on a smartphone using the bank's app or website. You will need to take photos of your ID and proof of address with your phone's camera. If you do not have a smartphone, go to a branch in person instead — all banks can open accounts face-to-face.

How long does it take to open an account?

Online accounts usually take five to fifteen minutes to open, and you can use the account the same day. In-person accounts take about thirty minutes, and you can start using it when ready, though your physical debit card arrives by mail in five to ten business days.

Should I open accounts at multiple banks?

Start with one account at one bank. Once you understand how banking works and know what you need, you can add a second account elsewhere if it makes sense — for example, a savings account at a bank with higher interest rates. Most people do fine with one checking account and one savings account, both at the same place.