What "best" means depends on what you actually do with your money

There is no single best bank in America. The bank that works for you depends on whether you need a physical branch, how often you move money between accounts, what you're willing to pay in fees, and whether you want to borrow money from the same place you deposit it. A bank that's excellent for someone who uses an ATM twice a month and pays bills online might be terrible for someone who deposits checks weekly and needs a loan officer they can call.

The banks with the largest branch networks—Chase, Bank of America, Wells Fargo, Citibank—are not the cheapest, and they are not the best for everyone. Smaller regional banks, credit unions, and online-only banks often have lower fees and higher savings rates. The tradeoff is usually that you cannot walk into a branch, or there are fewer branches near you.

This guide describes the actual differences between bank types and the real reasons to choose one over another. It does not rank banks by a single score, because that score would be meaningless for your specific situation.

Key Takeaways

  • Large national banks offer thousands of branches and ATMs but typically charge monthly fees and pay lower interest rates on savings accounts.
  • Regional banks and credit unions often have lower fees and higher savings rates, but fewer locations and sometimes stricter membership rules.
  • Online-only banks have the highest savings rates and lowest fees because they have no physical branches, but you cannot deposit cash or speak to someone in person.
  • The best choice depends on whether you need branches, how you deposit money, what fees matter most to you, and whether you want a loan from the same institution.
  • Switching banks takes about two weeks for direct deposits and bill payments to move, so the cost of switching is mostly time, not money.

Large national banks: what you pay for branches

Chase, Bank of America, Wells Fargo, and Citibank operate thousands of branches and ATMs across the country. If you need to walk into a bank building, deposit a check in person, or speak to a loan officer, these banks make that possible almost anywhere you travel.

The cost is fees. Most large national banks charge a monthly maintenance fee ($12 to $15 is typical) unless you keep a minimum balance—usually $1,500 to $2,500—or set up direct deposit. They also pay very low interest on savings accounts: often 0.01% to 0.05% annually, which means $100 in savings earns less than a dollar per year.

Large banks are useful if you need branches for a specific reason: you deposit cash regularly, you need a mortgage or business loan, or you travel frequently and want ATM access everywhere. If you do none of those things, you are paying for a service you do not use.

Regional banks and credit unions: lower fees, fewer locations

A regional bank operates in one state or a few states and typically has 50 to 500 branches. A credit union is a member-owned cooperative: you have to meet a membership requirement (work for a certain employer, live in a certain county, or belong to a certain organization) to open an account. Both usually charge no monthly fee and pay higher interest on savings accounts than large national banks.

The tradeoff is location. If you live in California and your bank is based in California, you have branches nearby. If you move to Texas, you may have no branches at all. Credit unions sometimes belong to shared branching networks, which means you can do basic transactions at other credit unions, but this is not the same as having your own bank's branch.

Regional banks and credit unions make sense if you live in one place, rarely need to visit a branch, and want to avoid monthly fees. They also tend to be more willing to work with you on a loan if you have a relationship with a loan officer. The downside is that if you move, you may need to switch banks.

Online-only banks: the highest savings rates, no branches

Online-only banks like Ally, Marcus, Discover, and Charles Schwab have no physical branches. You open an account on their website, deposit checks by photographing them with your phone, and move money between accounts through their app or website. They pay the highest savings rates available—currently 4% to 5% annually on savings accounts, compared to 0.01% at large national banks—because they have no branch costs.

The limitation is that you cannot deposit cash. If you receive cash and need to deposit it, you have to go to an ATM or a branch at another bank. Some online banks offer ATM networks (Ally reimburses ATM fees at any bank; Charles Schwab offers its own ATM network), but you still cannot walk in and hand cash to a teller.

Online-only banks work well if you are paid by direct deposit, pay bills online, and rarely handle cash. They do not work if you deposit cash regularly or need to speak to someone in person. Many people use an online bank for savings and a large national bank or credit union for checking, to get the best of both.

What actually matters: fees, interest rates, and how you move money

When comparing banks, look at three concrete numbers: the monthly maintenance fee (or the balance required to waive it), the interest rate on savings accounts, and the ATM network or branch locations near you.

Monthly fees range from $0 (most online banks, many credit unions) to $15 (large national banks). If you keep less than $1,500 in your account, a $12 monthly fee costs you $144 per year. An online bank paying 4.5% interest on a $5,000 savings account earns you $225 per year, while a large national bank paying 0.01% earns you 50 cents. The difference is real money.

ATM access matters only if you use ATMs. If you never withdraw cash, ATM networks are irrelevant. If you withdraw cash weekly, a bank with a large ATM network or one that reimburses ATM fees saves you money and time.

Loan access matters if you plan to borrow. Large national banks and regional banks offer mortgages, auto loans, and personal loans. Online-only banks usually do not. If you think you will need a loan in the next few years, staying with a bank that offers loans may be worth the higher fees.

How to switch banks without losing money or access

Switching banks takes about two weeks. Here is what happens: you open an account at the new bank, you update your direct deposit with your employer (or your benefits provider, if you receive government payments), and you change the bank information for any bills you pay automatically. The old account stays open until all the old payments have cleared, then you close it.

During the two weeks, money may arrive at the old account while you are setting up the new one. This is normal. Keep the old account open until you are certain all recurring payments have moved. Most banks will not charge you a fee to close an account if you close it within 30 days of opening it.

The real cost of switching is time, not money. You lose nothing by switching except the convenience of not having to update your direct deposit and bill payments. If a new bank saves you $144 per year in fees, switching is worth a few hours of work.

Banks that specialize in specific situations

Some banks focus on specific groups. Aspiration and Chime target people who want socially responsible banking or who are paid early through payroll advances. Varo and Chime also offer no overdraft fees, which matters if you sometimes spend more than you have. Navy Federal and USAA serve military members and their families and often have lower fees and better loan terms than civilian banks.

If you belong to a group that has a specialized bank, compare it to a large national bank and an online bank using the same three numbers: monthly fees, savings interest rate, and whether you can access branches or ATMs when you need them. Specialized banks are not automatically better—they are just built for a specific situation.

Frequently Asked Questions

Is my money safe if I use an online bank?

Yes. Online banks are insured by the Federal Deposit Insurance Corporation (FDIC) the same way large national banks are. FDIC insurance covers up to $250,000 per account holder per bank. If the bank fails, you get your money back. The bank's size or number of branches does not affect whether your money is insured.

Can I use multiple banks at the same time?

Yes. Many people keep a checking account at a large national bank or credit union for everyday spending and a savings account at an online bank for the higher interest rate. You can move money between them whenever you want. There is no penalty for having accounts at multiple banks.

What happens to my direct deposit if I switch banks?

Your employer or benefits provider continues to send money to the old account until you give them the new bank's routing number and account number. You can update this information online, by phone, or in person. It usually takes one to two pay periods for the change to take effect. Keep the old account open until you see the first deposit arrive at the new bank.

Do I need a minimum balance to open an account?

Most online banks and credit unions require no minimum balance to open an account. Large national banks often require $25 to $100 to open, but no minimum to keep the account open (unless you want to waive the monthly fee, which usually requires $1,500 or more). Check the specific bank's website for its current requirements.

What if I need to deposit cash?

If you use an online bank, you can deposit cash at an ATM that accepts deposits, or you can go to a branch of another bank and ask them to deposit it into your account (some banks charge a fee for this). Some online banks partner with retail locations like Walmart or CVS to allow cash deposits. Check your bank's website for cash deposit options before opening an account.