There is no single best bank in America—the right one depends on what you need
The bank that works best for you depends on whether you prioritize low fees, high savings rates, branch access, online tools, or customer service. A bank that is excellent for someone who visits a branch weekly and needs a mortgage may be poor for someone who banks entirely on their phone and wants the highest interest rate on savings. This guide walks through what different banks actually offer and how to match one to your situation.
The major national banks (Chase, Bank of America, Wells Fargo, Citibank) offer extensive branch networks and full services but often charge monthly fees and pay low interest on savings accounts. Regional banks and credit unions typically offer lower fees and better rates but may have fewer branches or limited online tools. Online-only banks usually offer the highest savings rates and lowest fees but have no physical locations. The choice is not about which bank is objectively best—it is about which trade-offs fit your life.
Key Takeaways
- National banks offer branch access and full services but charge higher fees and pay lower interest rates than online banks.
- Online-only banks pay the highest savings rates and charge the lowest fees, but you cannot deposit cash or speak to someone in person.
- Credit unions often offer lower fees and better rates than national banks, but membership is limited by employer, location, or family ties.
- The best bank for you depends on whether you need branch access, want the highest savings rate, or prioritize customer service over fees.
- You can open accounts at multiple banks to use each one for what it does best—a high-rate savings account at one bank and a checking account at another.
What national banks offer and what they cost
The four largest banks in the United States are Chase, Bank of America, Wells Fargo, and Citibank. All four have thousands of branches nationwide, offer checking and savings accounts, credit cards, mortgages, and investment services, and provide 24/7 customer support by phone. If you need to deposit a check in person, speak to a loan officer, or have a question answered when ready, a national bank is the most straightforward option.
The cost is higher than other options. Chase's most common checking account (Chase Total Checking) charges $12 per month unless you maintain a $500 minimum balance or set up direct deposit. Bank of America's Advantage Checking charges $12 per month unless you maintain a $1,500 balance or have a linked savings account with $500. Wells Fargo's Everyday Checking charges $10 per month unless you maintain a $500 balance. These fees explore even if you never overdraw or cause problems—they are straightforward the price of having an account.
Savings accounts at national banks pay very low interest. As of early 2024, Chase savings accounts pay around 0.01% annual interest, meaning $10,000 earns about $1 per year. Bank of America and Wells Fargo pay similarly low rates. If you keep money in savings, you are losing purchasing power to inflation while the bank uses your money to lend at much higher rates. National banks are useful for checking and services, not for saving.
Online banks and why they pay more interest
Online-only banks (Ally, Marcus, American Express Personal Savings, Discover Bank) have no physical branches. You open an account on their website, deposit money by transferring it from another bank or mailing a check, and manage everything through an app or website. Because they have no buildings, staff, or branch networks to maintain, their costs are much lower than national banks, and they pass those savings to customers through higher interest rates and lower or zero fees.
As of early 2024, online banks pay between 4% and 5% annual interest on savings accounts—roughly 400 times more than national banks. On $10,000, that difference is about $400 per year versus $1. Online banks also charge no monthly fees for checking or savings accounts. If you have money sitting in a savings account, an online bank is almost always the better choice financially.
The trade-off is that you cannot walk into a branch, deposit cash, or speak to someone in person. If you need to deposit a check, you photograph it with your phone and upload it to the app—most online banks process mobile check deposits within one business day. If you need to deposit cash, you can transfer money from another bank account, use an ATM network (some online banks partner with ATM networks; others do not), or visit a partner bank. If you have a complex question, you contact customer service by email, chat, or phone, not in person.
Credit unions: membership, rates, and when they make sense
A credit union is a member-owned bank that serves a specific group—employees of a company, members of a profession, residents of a geographic area, or family members of existing members. Credit unions typically charge lower fees than national banks and pay higher interest rates than national banks (though usually lower than online banks). They often have fewer branches and less sophisticated technology than national banks, but many have improved their apps and online tools significantly in recent years.
To use a credit union, you must be a member of the group it serves. If you work for a large employer, your company may have a credit union. If you live in a particular state or county, you may be able to join a community credit union. If a family member belongs to a credit union, you may be able to join as a family member. You cannot straightforward walk in and open an account the way you can at a national bank or online bank.
Credit unions are worth exploring if you are already a member or can become one. A typical credit union checking account charges no monthly fee and pays slightly higher interest than a national bank. Savings accounts pay more interest than national banks but usually less than online banks. If you value local service and lower fees without the extreme rates of online banks, a credit union is a reasonable middle ground.
Comparing checking accounts: fees, minimums, and features
| Bank Type | Monthly Fee | Minimum Balance | Checking Interest Rate | Branch Access |
|---|---|---|---|---|
| National Bank (Chase example) | $12 (waived with $500 balance or direct deposit) | $500 | 0.01% | Yes, thousands nationwide |
| Online Bank (Ally example) | $0 | $0 | 0.25% to 0.50% | No |
| Credit Union (varies widely) | $0 to $5 | $0 to $500 | 0.05% to 0.25% | Yes, limited to membership area |
When comparing checking accounts, look at the actual monthly cost to you, not the advertised fee. If a bank charges $12 per month but waives it for direct deposit, and you have direct deposit, your cost is $0. If you do not have direct deposit and cannot maintain a $500 balance, your cost is $12 per month or $144 per year. Online banks charge $0 per month with no minimum balance, so the comparison is straightforward: if you do not need branch access, an online bank checking account costs less.
Interest paid on checking accounts is almost always negligible. National banks pay 0.01%, online banks pay 0.25% to 0.50%, and credit unions pay 0.05% to 0.25%. On a typical checking balance of $2,000, the difference between 0.01% and 0.50% is about $8 per year. The monthly fee matters far more than the interest rate when choosing a checking account.
Comparing savings accounts: where your money actually grows
Savings accounts are where interest rates matter. The difference between 0.01% and 4.5% on $10,000 is about $450 per year—real money. If you keep savings in a national bank, you are paying an invisible tax in lost interest. Online banks are the clear winner for savings accounts, paying 4% to 5.5% depending on the bank and current market conditions.
The catch is that you cannot access the money as quickly as you might from a national bank branch. Transferring money from an online savings account to your checking account takes one to three business days. If you need cash when ready, you have to plan ahead. For money you are actually saving—not spending—this delay is not a problem. For money you might need suddenly, it is a real limitation.
A practical approach is to keep your checking account where it is most convenient (a national bank if you need branches, an online bank if you do not) and keep your savings at an online bank. You transfer money from checking to savings when you want to save it, and you transfer it back when you need it. This way you get the convenience of a checking account where you need it and the high interest rate on savings where it matters.
How to decide: questions to ask yourself
Start with how you actually bank. Do you visit a branch more than once a month? Do you deposit cash regularly? Do you need to speak to someone in person about loans or investments? If yes to any of these, a national bank or credit union is more practical than an online bank, even if it costs more. If no—if you bank entirely on your phone and rarely need cash—an online bank will save you money.
Next, think about your savings. Do you have money sitting in a savings account that you are not spending? If yes, the interest rate difference between a national bank (0.01%) and an online bank (4.5%) is worth hundreds of dollars per year. If you have no savings, the interest rate does not matter yet, and you should focus on fees and convenience.
Finally, consider whether you are a member of a credit union or can become one. If you are, compare the credit union's fees and rates to a national bank and an online bank. Credit unions often split the difference—lower fees than national banks, higher rates than national banks, but not as high as online banks. If the credit union is convenient and the rates are reasonable, it may be the best fit.
Frequently Asked Questions
Can I have accounts at multiple banks?
Yes. Many people keep a checking account at a national bank or credit union for convenience and a savings account at an online bank for the interest rate. There is no rule against it, and it lets you use each bank for what it does best. The only downside is managing multiple logins and keeping track of where your money is.
What if I need to deposit cash?
National banks and credit unions accept cash deposits at branches. Online banks do not have branches, but some partner with ATM networks that accept deposits, and some allow you to transfer money from another bank account. Check the specific bank's website to see how they handle cash deposits before you open an account.
Are online banks safe?
Online banks are insured by the FDIC (Federal Deposit Insurance Corporation) the same way national banks are. Your deposits are protected up to $250,000 per account type per bank. The main risk is not safety but convenience—if the bank goes out of business, your money is protected, but you may have to wait for it to be transferred to another bank.
Do I need a national bank for a mortgage or loan?
No. Online banks, credit unions, and smaller regional banks all offer mortgages and personal loans. National banks are not required. Shop around and compare rates and fees across multiple lenders before choosing. The bank where you keep your checking account is not necessarily the best place to borrow.
What is the difference between a bank and a credit union?
A bank is a for-profit business owned by shareholders. A credit union is a nonprofit owned by its members. Credit unions typically charge lower fees and pay higher interest rates because they return profits to members rather than shareholders. The trade-off is that membership is restricted to a specific group, whereas anyone can open a bank account.