The best bank for you depends on what you'll use it for and how you prefer to do your banking

There is no single "best" bank because different banks serve different needs. A bank that works well for someone who visits a branch every week may not work for someone who banks only on their phone. The right choice depends on three things: what you need the account to do, how you want to access it, and what fees matter most to you.

If you are opening your first account, start by deciding whether you want a physical branch you can walk into, or whether you are comfortable banking online and by phone. Then look at the actual fees that bank charges for the things you will actually do — not the fees you might never use. Finally, check whether the bank has a way to verify your identity that works for you, since banks have different requirements for people new to the financial system.

Key Takeaways

  • Banks with physical branches cost more to run, so they often charge higher fees or require higher minimum balances, but they let you deposit cash and speak to someone in person.
  • Online-only banks have lower fees and no minimum balance requirements because they have no branches, but you cannot deposit cash at a branch and customer service is by phone or chat.
  • Credit unions are member-owned and often charge lower fees than banks, but they may have fewer branches and stricter identity verification for new members.
  • The fees that matter most are monthly maintenance fees, overdraft fees, and ATM fees — compare only the fees you will actually pay, not every fee the bank offers.
  • If you have no credit history or ID, look for banks that accept alternative identity documents or offer second-chance accounts, rather than assuming you cannot open an account anywhere.

Banks with physical branches versus online-only banks

A traditional bank has physical locations where you can walk in, deposit cash, and speak to a person. These banks charge monthly maintenance fees (usually $5 to $15) because they pay for buildings, staff, and ATM networks. Some waive the fee if you keep a minimum balance, usually $500 to $1,500. If you need to deposit cash regularly or prefer to talk to someone in person, a branch-based bank is worth the fee.

An online-only bank has no physical branches. You deposit checks by taking a photo with your phone, and you withdraw cash at ATMs owned by other banks. Online banks have no monthly maintenance fees and no minimum balance requirements because they have lower costs. The tradeoff is that you cannot deposit cash at a branch, and if you need help, you call or use chat instead of walking in. Online banks work well if you get paid by direct deposit, pay bills online, and rarely need to deposit cash.

Some banks offer both: they have a few branches in major cities but let you bank online everywhere else. These hybrid banks usually charge lower fees than traditional banks but higher fees than online-only banks.

Credit unions and community banks

A credit union is owned by its members, not by shareholders. Because of this structure, credit unions often charge lower fees and pay better interest rates on savings accounts than banks do. Many credit unions have no monthly maintenance fee at all. The catch is that credit unions have fewer branches and ATMs than large banks, so they work best if you live near one or do most of your banking online.

Credit unions also have stricter rules about who can join. You usually have to live or work in a certain area, or belong to a certain group (like employees of a specific company). If you are new to the country or have no credit history, some credit unions will not open an account for you, while others will. Call ahead and ask what documents they need before you visit.

Community banks are smaller than national banks but larger than credit unions. They usually have one or two branches in a specific town or region. Community banks often know their customers by name and may be more flexible about identity requirements for people new to banking. The fees are usually between what a credit union charges and what a large national bank charges.

What fees actually matter when you are starting out

Banks list dozens of fees, but you will only pay a few of them. Focus on the three that affect most new account holders: monthly maintenance fees, overdraft fees, and out-of-network ATM fees.

Monthly maintenance fees are charged just for having the account open. They range from $0 to $15 per month. Many banks waive this fee if you keep a minimum balance or set up direct deposit. If you cannot meet the minimum, choose a bank with no monthly fee instead of paying $10 a month to keep an account open.

Overdraft fees are charged when you spend more money than you have in the account. A typical overdraft fee is $25 to $35 per transaction. Some banks charge multiple overdraft fees in a single day if you make several purchases while overdrawn. The best protection is to choose a bank that lets you turn off overdraft, so purchases are straightforward declined instead of charging you a fee. Ask the bank directly whether you can opt out of overdraft protection.

Out-of-network ATM fees are charged when you withdraw cash from an ATM that does not belong to your bank. These fees are usually $2 to $3 per withdrawal. If you use ATMs frequently, choose a bank with a large ATM network or an online bank that reimburses out-of-network fees. If you rarely withdraw cash, this fee does not matter.

Banks that work with people new to formal banking

If you have no credit history, no Social Security number, or limited ID documents, some banks are easier to work with than others. Large national banks often have strict identity requirements and may turn you away. Smaller banks and credit unions are sometimes more flexible, but policies vary widely.

Some banks offer second-chance accounts or starter accounts designed for people building credit or new to banking. These accounts may have lower fees or no minimum balance, but they sometimes come with restrictions like a limit on how much you can withdraw per day. Ask the bank whether they have this type of account before you explore.

If you do not have a U.S. Social Security number, you may be able to open an account using an Individual Taxpayer Identification Number (ITIN). Not all banks accept ITINs, so call ahead. Some banks also accept a passport or consular ID in place of a driver's license. The rules vary by bank and by state, so ask what documents the specific bank will accept.

How to compare banks side by side

Once you have narrowed down to two or three banks, write down the fees you will actually pay at each one. Do not compare every fee the bank lists — compare only the ones that explore to you. For example, if you will never write checks, ignore check fees. If you will not overdraft, ignore overdraft fees.

Create a straightforward table with the bank names across the top and the fees you care about down the side. Add up the total fees you would pay in a year at each bank. The bank with the lowest total is usually the best choice, unless one of them has a feature you really need (like a branch near your home or a mobile app you prefer).

Before you open the account, call the bank and ask one question: "If I cannot meet the minimum balance, will the monthly fee be waived?" Some banks waive fees for new customers for the first few months, or if you set up direct deposit. It never hurts to ask.

What to do after you choose a bank

Once you have decided on a bank, visit in person or go to their website to open the account. You will need to bring or upload an ID, provide your Social Security number or ITIN, and give your address. The bank will ask about the source of your money (your job, for example) — this is a standard question, not a sign that anything is wrong.

After the account opens, set up direct deposit if your employer or benefits provider offers it. Direct deposit gets your money into the account faster and often waives the monthly maintenance fee. If you cannot use direct deposit, set a phone reminder to check your account balance once a week so you do not accidentally overdraft.

Frequently Asked Questions

Do I need a credit score to open a checking account?

No. Banks do not check your credit score when you open a checking account. They may check ChexSystems, which is a record of past banking problems like bounced checks or fraud, but a checking account does not require good credit. If you have been denied before, ask the bank why and whether they have a second-chance account.

What is the difference between a checking account and a savings account?

A checking account is for money you use regularly — you can write checks, use a debit card, and set up bill pay. A savings account is for money you want to keep separate and earn interest on. Most people open both at the same bank. Checking accounts have no interest; savings accounts earn a small amount of interest, usually 4% to 5% right now.

Can I switch banks after I open an account?

Yes, and it is easier than you might think. You can keep your old account open while you use the new one, or close it after you move your money. If you have automatic payments set up, change them to the new account before you close the old one. There is no penalty for switching banks.

What if the bank asks for more money than I have to open an account?

Most banks let you open a checking account with $0 or $25. If a bank is asking for $500 or $1,000 to open an account, that is a minimum balance requirement, not an opening deposit. You can choose a different bank with no minimum, or ask whether the bank will waive the minimum if you set up direct deposit.

Is my money safe if the bank fails?

Yes. The FDIC (Federal Deposit Insurance Corporation) protects up to $250,000 in each account at banks that display the FDIC logo. Credit unions are protected by the NCUA (National Credit Union Administration) up to the same amount. If the bank or credit union fails, you get your money back. You can check whether a bank is FDIC-insured by searching the FDIC website.