What "best" means depends on how you move money

There is no single best bank. A bank that excels at low fees for frequent transfers will frustrate someone who needs in-person branches. One with excellent savings rates may have a clunky mobile app. The right choice depends on what you actually do with your account—how often you withdraw cash, whether you need to deposit checks, how much you keep in savings versus checking, and whether you value a physical location or prefer everything online.

The banks that dominate advertising are not always the ones that cost you least. Large national banks like Chase, Bank of America, and Wells Fargo have extensive branch networks but often charge monthly fees and pay minimal interest on savings. Online-only banks like Ally and Marcus typically offer higher savings rates and lower fees because they have no physical locations to maintain. Credit unions, which are member-owned rather than shareholder-owned, often sit between the two—fewer branches than national banks, but better rates and lower fees than most.

To find the right fit, start by listing what you actually need: Do you deposit cash regularly? Do you need to visit a branch? How much do you typically keep in savings? Do you use your debit card multiple times a week? Once you know what matters to you, you can compare banks on those specific dimensions rather than on marketing claims.

Key Takeaways

  • National banks offer branch access but typically charge monthly fees and pay low savings rates, while online banks offer higher rates and lower fees but no physical locations.
  • Credit unions often provide a middle ground—better rates and fees than national banks, with some branch access through shared networks.
  • The best bank for you depends on your actual habits: how often you need cash, whether you deposit checks, and how much you keep in savings versus checking.
  • Comparing banks on the specific features you use costs less than choosing based on brand recognition or advertising.
  • Many people benefit from holding accounts at two institutions—a national bank or credit union for cash deposits and branch access, and an online bank for savings.

National banks: branch access at the cost of fees and low rates

Chase, Bank of America, Wells Fargo, and Citibank operate thousands of branches nationwide. If you deposit cash regularly, need to speak to someone in person, or want to access your money at an ATM anywhere in the country, a national bank makes sense. The trade-off is clear: monthly maintenance fees (typically $12 to $15) and savings rates that rarely exceed 0.01 percent.

Some national banks waive the monthly fee if you maintain a minimum balance—often $1,500 to $2,500—or set up direct deposit. If you can meet that threshold, the fee disappears and you keep the branch access. But if you cannot maintain the minimum or do not have direct deposit, you are paying for convenience you may not use.

National banks also tend to charge overdraft fees ($35 per transaction is standard) and foreign transaction fees if you travel. These costs add up quickly for people who overdraw occasionally or use their debit card abroad.

Online banks: higher rates and lower fees, no branches

Banks like Ally, Marcus, Discover, and Charles Schwab operate entirely online. They have no physical branches, which means lower overhead costs—and those savings are passed to you as higher interest rates on savings accounts and checking accounts, plus lower or zero monthly fees.

A savings account at an online bank currently pays between 4 and 5 percent annual interest, depending on the bank and the current rate environment. A savings account at a national bank pays closer to 0.01 percent. Over a year, that difference is substantial: $1,000 in savings earns roughly $40 to $50 at an online bank versus less than $1 at a national bank.

The catch is that you cannot deposit cash in person. If you receive cash regularly—tips, payments from side work, or cash gifts—you will need another way to get that money into your account. Some online banks partner with retailers like CVS or Walgreens to accept cash deposits for a fee. Others require you to transfer money from another bank account. If you rarely handle cash, this is not a problem. If you do, it becomes an inconvenience.

Online banks also tend to have fewer customer service options. Most offer phone and email support, but not chat or in-person help. If you prefer talking to a human on the phone, this matters.

Credit unions: member-owned institutions with shared branch networks

Credit unions are not-for-profit institutions owned by their members. Because they do not answer to shareholders, they typically offer better rates and lower fees than national banks. Many credit unions also participate in shared branching networks, which means you can conduct basic transactions at thousands of branches nationwide, even if your credit union has only a handful of its own locations.

To join a credit union, you must meet membership criteria—often based on where you work, where you live, or an organization you belong to. Some credit unions have broad may be able to access (for example, anyone in a certain county), while others are restricted to employees of a specific company or members of a specific profession. Once you are in, you get access to lower fees, better savings rates than national banks, and often more personalized customer service.

Credit unions vary widely in size and technology. Some have modern mobile apps and online banking that rival national banks. Others lag behind. Before joining, check whether the credit union's technology matches what you need—especially if you rely on mobile banking or frequent transfers.

Comparing banks on what you actually do

Rather than choosing based on advertising or brand recognition, build a comparison around your actual behavior. Create a straightforward table: list the banks you are considering, then list the features that matter to you—monthly fee, minimum balance to waive the fee, savings interest rate, overdraft fee, ATM network, mobile app quality, customer service availability, and whether you can deposit cash.

For each bank, fill in the numbers. A national bank might show a $12 monthly fee (waived at $2,000 balance), 0.01 percent savings rate, and $35 overdraft fee. An online bank might show $0 monthly fee, 4.5 percent savings rate, and $0 overdraft fee (some online banks do not charge overdraft fees at all). A credit union might show $0 monthly fee, 2.5 percent savings rate, and $25 overdraft fee, plus access to 30,000 shared branches.

Then calculate the annual cost or benefit of each option based on your actual use. If you maintain a $3,000 balance, overdraft twice a year, and keep $5,000 in savings, the math changes for each bank. The national bank's fee is waived, but you lose interest. The online bank saves you on fees but requires a workaround for cash deposits. The credit union splits the difference.

The two-bank strategy: combining strengths

Many people find that holding accounts at two institutions works better than choosing one. For example: keep a checking account at a national bank or credit union for cash deposits and everyday spending, and open a savings account at an online bank for the higher interest rate. Your paycheck goes to the national bank or credit union (where you can deposit cash if needed), and you transfer a portion to the online savings account each month.

This approach costs nothing—you are not paying for two accounts, just using each bank for what it does best. The national bank or credit union handles cash and checking; the online bank handles savings. You get branch access where you need it and high interest rates where they matter.

Alternatively, some people use an online bank for checking and savings, and keep a small account at a national bank or credit union purely for cash deposits. The key is matching each account to the specific task it performs.

Red flags when comparing banks

Watch for banks that advertise heavily but charge high fees or pay low rates. Advertising costs money, and those costs are often passed to customers. A bank that spends millions on television commercials is not necessarily better than one that does not.

Also be cautious of banks that require high minimum balances to avoid fees or to earn advertised interest rates. Some banks advertise a 4 percent savings rate but only pay it on balances above $100,000. For most people, that rate is irrelevant. Read the fine print on any advertised rate to see what balance it actually applies to.

Finally, avoid banks that make it difficult to close an account or transfer money out. A good bank makes it straightforward to leave. If a bank's website does not clearly explain how to close an account or transfer funds, that is a sign the institution is trying to lock you in.

Frequently Asked Questions

Is it safe to bank online?

Yes. Online banks are regulated by the same federal agencies as national banks and are required to carry FDIC insurance, which protects your deposits up to $250,000 per account type. Your money is as safe at an online bank as it is at Chase or Bank of America. The main risk is user error—using a weak password or falling for a phishing email—not the bank itself.

Can I use an ATM at a bank I do not have an account with?

Yes, but you may pay a fee. Most national banks charge $2 to $3 per out-of-network ATM withdrawal. Some online banks reimburse these fees or partner with ATM networks like Allpoint to offer free withdrawals at thousands of locations. Credit unions often participate in shared branching networks that include ATM access. Check the bank's ATM policy before opening an account.

What happens to my money if a bank fails?

The Federal Deposit Insurance Corporation (FDIC) protects deposits up to $250,000 per account type at each bank. If a bank fails, the FDIC transfers your money to another bank or pays you directly. This protection applies to all FDIC-insured banks, whether they are national, regional, or online. Credit unions are insured by the National Credit Union Administration (NCUA) with the same $250,000 limit.

How long does it take to transfer money between banks?

A transfer between two banks typically takes one to three business days. Some banks offer faster transfers (same-day or next-day) for an additional fee. Wire transfers are faster (usually same-day) but cost $15 to $30. For routine transfers, the standard one- to three-day timeline is normal and free.

Should I close my old bank account when I switch?

Not when ready. Keep the old account open for at least a month after switching to make sure all automatic payments and deposits have been redirected. Once you confirm that nothing is still hitting the old account, you can close it. Closing too quickly can cause checks or automatic payments to bounce, which triggers overdraft fees.