What makes a bank "good" depends on how you use it

A good bank for you is one that matches the way you actually handle money — not the way a bank wants you to handle it. If you keep cash at home and rarely use a debit card, a bank with no ATM network and high fees for tellers is a poor fit, even if it has excellent customer service. If you deposit checks by phone and never visit a branch, that branch network costs you nothing. Start by listing what you actually do: How often do you need to withdraw cash? Do you deposit checks or direct deposit? Do you call customer service, use an app, or visit in person? Once you know that, you can find a bank built for your habits instead of fighting one built for someone else.

The second part is understanding what banks charge and what they don't. Banks make money from fees, interest on loans, and the interest they earn on your deposits. Some banks charge monthly maintenance fees; others waive them if you keep a minimum balance or set up direct deposit. Some charge for each ATM visit outside their network; others reimburse those fees. Some pay interest on checking accounts; most don't. None of these is inherently bad — they're trade-offs. A bank with a $15 monthly fee but no ATM charges might cost less than a bank with no monthly fee but $3 per out-of-network withdrawal if you withdraw cash twice a week.

Key Takeaways

  • Write down how you actually use banking — how often you withdraw cash, whether you visit branches, how you deposit checks — before comparing banks.
  • Compare the total cost you will pay, not just whether there is a monthly fee, because ATM charges, overdraft fees, and minimum balance requirements add up differently for each person.
  • Local banks and credit unions often have lower fees and more flexible rules than large national banks, but fewer ATMs and branches.
  • Online banks have the lowest fees and highest interest rates because they have no physical locations, but you cannot deposit cash or speak to someone in person.
  • Visit the bank's website and call their customer service line with a specific question before opening an account, so you know how they treat you when you are not yet a customer.

The three types of banks and what each costs

Large national banks (Bank of America, Chase, Wells Fargo, Citibank) have thousands of branches and ATMs nationwide. You can walk into almost any location and speak to someone. They offer many products — checking, savings, credit cards, mortgages, investment accounts — all in one place. The trade-off is fees. Most charge $12 to $15 per month for a basic checking account unless you keep a minimum balance (often $1,500 or more) or set up direct deposit. ATM withdrawals outside their network cost $3 to $5 each. Overdraft fees run $30 to $35 per incident. If you use their services heavily and rarely overdraft, the convenience may be worth it. If you overdraft once a month or withdraw cash from other banks' ATMs regularly, the fees will cost you hundreds per year.

Local banks and credit unions are smaller institutions rooted in a specific region or community. A credit union is owned by its members rather than shareholders, which means profits go back to members as lower fees and higher interest rates. Both local banks and credit unions typically charge lower monthly fees (often $0 to $5) and have more flexible rules — they may waive overdraft fees for first-time mistakes or not charge them at all. The catch is geography: they have fewer branches and ATMs, so if you move or travel, you lose convenience. They also offer fewer products; you may need to go elsewhere for a mortgage or investment account. If you live in one place and rarely travel, a local bank or credit union usually costs less.

Online banks (Ally, Charles Schwab, Discover, Marcus) have no physical locations. You open an account on their website, deposit checks by taking a photo with your phone, and manage everything through an app or website. Because they have no buildings or tellers, they charge almost no monthly fees and pay higher interest on savings accounts. Overdraft fees are rare or nonexistent. The trade-off is that you cannot deposit cash, and if you need help, you call or email — you cannot walk into a branch. If you are comfortable with technology and rarely use cash, an online bank is usually the cheapest option. If you need to deposit cash regularly or prefer face-to-face help, it will not work.

How to calculate what a bank will actually cost you

Do not compare banks by looking at one fee at a time. Instead, estimate your own costs based on your habits. Write down: How many times per month do you withdraw cash from an ATM outside the bank's network? How many times per month do you overdraft (if ever)? Will you keep the minimum balance, or will you fall short some months? Do you have direct deposit? Once you have those numbers, multiply them by the bank's fees and add them up.

Example: You are comparing a large national bank and a credit union. The national bank charges $15 per month, $3 per out-of-network ATM visit, and $35 per overdraft. The credit union charges $0 per month, $2 per out-of-network ATM visit, and $0 per overdraft (first one free, then $25). You withdraw cash four times a month from other banks' ATMs and overdraft once every three months. National bank: ($15 × 12) + ($3 × 4 × 12) + ($35 × 4) = $180 + $144 + $140 = $464 per year. Credit union: ($0 × 12) + ($2 × 4 × 12) + ($25 × 4 ÷ 3) = $0 + $96 + $33 = $129 per year. The credit union costs you $335 less per year, even though it charges for out-of-network ATM visits.

This math changes if your habits change. If you set up direct deposit and stop overdrafting, the national bank's fee might drop to $180 per year (direct deposit often waives the monthly fee). If you move to a city where the credit union has no branches, the convenience cost might outweigh the fee savings. Recalculate whenever your situation changes.

How to check a bank's reputation and customer service

Before opening an account, spend 15 minutes learning how the bank treats customers. Visit the bank's website and look for a phone number or chat option. Call with a specific question — not "Is your bank good?" but "I overdraft about once a month. What happens the first time I overdraft, and what does it cost?" Listen to how long you wait, whether the person answers your question directly, and whether they volunteer information you didn't ask for (like how to avoid overdrafts). If you wait 20 minutes and get a scripted answer, that is how they will treat you as a customer.

Check the Consumer Financial Protection Bureau's complaint database at consumerfinance.gov. Search the bank's name and read complaints from real customers. Look for patterns: Are people complaining about the same thing over and over? Are complaints about fees, customer service, or errors? One complaint is normal; dozens about the same issue is a warning. Also check Google reviews and Trustpilot, but remember that people who had no problems rarely leave reviews, so these sites skew negative.

Ask people you know — family, friends, coworkers — what bank they use and whether they like it. They will tell you about fees they discovered the hard way, branches they use, and customer service experiences. This is often more useful than any website review because you know the person and can ask follow-up questions.

What to look for when comparing checking accounts

Once you have narrowed down to two or three banks, compare their checking accounts side by side. Look at: monthly maintenance fee (and whether direct deposit or a minimum balance waives it), overdraft fee, out-of-network ATM fee, fee to speak to a teller, fee to order checks, and whether the account pays interest. Also check whether the bank reports to credit bureaus — some do, some don't. If you are rebuilding credit, a bank that reports your positive account history helps you.

Ask about rules that are not always listed on the website. Can you open an account online, or do you have to visit a branch? How long does it take to open an account? Can you deposit checks by phone or only through an ATM or app? What happens if you close the account within 90 days — do they charge a fee? What is the minimum opening deposit? Some banks require $25; others require $100 or more. These details matter when you are choosing between banks that have similar fees.

When to choose a savings account at the same bank versus elsewhere

Many people open a checking account at one bank and a savings account at another because savings account interest rates vary widely. A large national bank might pay 0.01% interest on savings; an online bank might pay 4% or 5%. Over a year, that difference is hundreds of dollars on a $10,000 balance. However, having accounts at two banks means two logins, two statements, and two customer service lines if something goes wrong.

If the bank where you open checking also pays competitive interest on savings (usually an online bank or credit union), open both there. If your checking bank pays almost no interest, open a savings account at an online bank that pays higher rates. You can transfer money between banks in one to three business days, so it is not inconvenient. Prioritize the bank where you do your daily banking — the one you chose based on your checking habits — and treat savings as secondary.

Red flags that mean you should look elsewhere

Do not open an account at a bank that: charges a fee to speak to a teller (some banks do this to push you toward ATMs and apps), charges a monthly fee with no way to waive it, charges for incoming wire transfers, or requires a very high minimum balance you cannot maintain. Also avoid banks that make it hard to close an account or that charge a fee to close. These are signs the bank prioritizes extracting fees over serving customers.

Be cautious of banks that advertise heavily on social media or promise to "help you build credit" or "get approved for a checking account." Legitimate banks do not need to advertise checking accounts; people find them through word of mouth or search. Banks that advertise heavily are often second-chance banks designed for people with bad credit, and they charge much higher fees to offset the risk. If you have a clean banking history, you do not need one.

Frequently Asked Questions

Is it better to bank online or in person?

Online is cheaper if you are comfortable with technology and rarely need cash. In-person is better if you like talking to someone, need to deposit cash, or are new to banking and want guidance. Many people use both — a local bank for everyday banking and an online bank for savings.

Do I need to stay with my first bank forever?

No. You can switch banks anytime. Close your old account, open a new one, and update direct deposit and automatic payments. It takes a few hours of work but costs nothing. If your bank's fees or service change, switching is a reasonable response.

What if I have bad credit or a history of overdrafts?

Some banks check your banking history (through ChexSystems) before opening an account and may deny you if you have too many overdrafts or closed accounts. Credit unions and local banks are often more flexible than national banks. Call and ask whether they check ChexSystems and what their policy is before you explore.

Should I open a checking and savings account at the same bank?

Only if that bank offers competitive interest on savings. If it does not, open checking where you do your daily banking and savings at an online bank that pays higher rates. Transferring money between banks takes one to three days but saves you hundreds per year in interest.

What documents do I need to open a bank account?

Most banks require a government-issued photo ID (driver's license or passport) and proof of address (utility bill, lease, or bank statement). Some require a Social Security number or ITIN. Call the bank before you visit to confirm what they need.