The best checking account depends on how you bank, not on which bank is biggest
There is no single "best" checking account because banks offer different features at different costs, and what matters most to you might not matter to someone else. A person who keeps a high balance and rarely uses an ATM has different needs than someone who lives paycheck to paycheck and needs free overdraft protection. The right account is the one that matches your actual banking behavior and costs you the least money for the services you actually use.
Start by listing what you do with your checking account: How often do you visit a branch? Do you use ATMs outside your bank's network? Do you keep a minimum balance, or does your balance fluctuate? Do you write checks? Do you need overdraft coverage? Once you know your own habits, you can compare accounts on the features and fees that actually affect you.
Key Takeaways
- The lowest-fee account for you depends on your balance, how often you use out-of-network ATMs, and whether you need overdraft protection—not on the bank's name or size.
- Monthly maintenance fees range from zero to $15 or more, but many banks waive them if you keep a minimum balance or set up direct deposit.
- Out-of-network ATM fees add up quickly if you don't have a branch near you; some accounts reimburse these fees, others charge $2 to $3 per withdrawal.
- Overdraft fees and non-sufficient-funds fees vary widely; some banks charge $25 to $35 per incident, while others offer free overdraft protection or allow you to link a savings account.
- Online banks and credit unions often have lower fees and higher interest rates than large national banks, but you cannot deposit cash in person.
Monthly maintenance fees and how to avoid them
Most checking accounts charge a monthly maintenance fee—typically $5 to $15—but most banks let you waive it by meeting one condition. Common waiver options include keeping a minimum balance (often $500 to $1,500), setting up direct deposit, or maintaining a linked savings account. Read the fine print to see which waiver applies to the account you are considering.
If you cannot meet a waiver condition, look for accounts with no monthly fee at all. Online banks and many credit unions offer free checking with no strings attached. The trade-off is usually that you cannot deposit cash in person or visit a physical branch, which matters only if you actually need those services.
Some banks charge additional fees beyond the monthly maintenance fee: fees for paper statements, fees for using a teller, or fees for closing an account early. These are rare, but worth checking before you open an account.
ATM access and out-of-network fees
If you use ATMs frequently and do not live near your bank's branches, out-of-network ATM fees will cost you more than the monthly maintenance fee. A $3 fee per withdrawal adds up to $36 a year if you use an out-of-network ATM once a month, and much more if you use it weekly.
Large national banks have thousands of ATMs, so you may never pay an out-of-network fee if you use their machines. Credit unions often belong to shared branching networks that let you use ATMs at other credit unions for free. Online banks typically reimburse out-of-network ATM fees, so you pay nothing regardless of which machine you use—but you have to request the reimbursement after the fact.
Before opening an account, check whether there is a branch or ATM near your home, your workplace, and the places you shop. If there is not, choose an account that either reimburses out-of-network fees or belongs to a large ATM network.
Overdraft fees and protection options
An overdraft happens when you spend more money than you have in your account. Banks charge overdraft fees—usually $25 to $35 per transaction—when this occurs. Some banks charge a non-sufficient-funds fee instead, which is similar but applies when a check or automatic payment bounces.
You have three ways to handle overdrafts. First, you can decline overdraft protection and let transactions be rejected; this costs nothing but may embarrass you at checkout. Second, you can pay the overdraft fee each time it happens. Third, you can link a savings account or credit line so the bank automatically transfers money to cover the shortfall; this usually costs $0 to $10 per transfer, far less than an overdraft fee.
Some banks offer a grace period—a few hours or a day—before they charge an overdraft fee, giving you time to deposit money. Others charge the fee immediately. Ask about this before you open an account if overdrafts are a real possibility for you.
Interest rates on checking account balances
Most checking accounts pay little to no interest on your balance. Large national banks typically pay 0.01% annual percentage yield (APY) or less, meaning $1,000 in the account earns less than $1 per year. Online banks and credit unions often pay 0.25% to 0.50% APY, which is higher but still modest.
Interest rates change frequently and vary by bank, so compare current rates before you decide. If you keep a large balance in checking—$5,000 or more—the difference between 0.01% and 0.50% is worth noticing. If your balance is small or fluctuates, the interest difference is negligible.
Do not choose an account based on interest rate alone. A high-interest checking account that charges a $15 monthly fee costs you more than a free account paying 0.01%, unless you keep a very large balance. Look at the total cost: fees minus interest earned.
Online banks versus traditional banks versus credit unions
Online banks (like Ally, Charles Schwab, or Discover) have no physical branches, so you cannot deposit cash in person. They usually charge no monthly fee, reimburse out-of-network ATM fees, and pay higher interest rates than traditional banks. They work well if you deposit checks by phone camera, use direct deposit, and rarely need cash.
Traditional banks (like Bank of America, Chase, or Wells Fargo) have physical branches and ATMs, so you can deposit cash and speak to a teller. They usually charge monthly maintenance fees unless you meet a waiver condition, and they pay low interest rates. They work well if you need in-person service or frequently deposit cash.
Credit unions are member-owned cooperatives that often charge lower fees and pay higher interest than traditional banks. You must be a member to open an account, which usually requires living or working in a certain area or belonging to a certain group. Many credit unions belong to shared branching networks, giving you access to thousands of ATMs nationwide. They work well if you are a member and want lower fees.
Comparing accounts side by side
Once you have narrowed down your options, create a simple comparison. List the accounts you are considering and the fees that matter to you: monthly maintenance, out-of-network ATM, overdraft, and any others. Then calculate the total annual cost for each account based on your actual banking habits.
For example, if you keep a $1,000 balance, use an out-of-network ATM twice a month, and rarely overdraft, your annual costs might look like this:
| Account | Monthly Fee | ATM Fees (24/year) | Overdraft Fees | Interest Earned | Annual Cost |
|---|---|---|---|---|---|
| Big Bank Checking | $10 (waived with direct deposit) | $0 (has ATM network) | $0 | -$0.10 | $0 |
| Online Bank Checking | $0 | $0 (reimburses) | $0 | -$5 | -$5 |
| Credit Union Checking | $0 | $0 (shared network) | $0 | -$3 | -$3 |
In this example, the online bank and credit union both cost less than the big bank, even though the big bank has more ATMs. Your own comparison will look different depending on your habits.
Frequently Asked Questions
Should I open a checking account at the same bank where I have savings?
Not necessarily. Some banks offer a discount if you link accounts, but others do not. Compare the checking account fees at different banks before deciding. You can have checking at one bank and savings at another if that combination costs you less.
What if I need to deposit cash but use an online bank?
You have a few options: deposit cash at a partner bank or ATM if the online bank has one, use a mobile check deposit for checks instead of cash, or keep a small savings account at a local bank for cash deposits. Some online banks partner with retailers like Walmart or CVS to let you deposit cash at the register.
Can I switch checking accounts if I do not like the one I have?
Yes. You can open a new account at any time and close the old one. Before you close the old account, make sure all automatic payments and direct deposits are switched to the new account. Keep the old account open for a few weeks to catch any stragglers, then close it.
Do I need a minimum balance to open a checking account?
Most banks require a minimum opening deposit—often $25 to $100—but not a minimum balance to keep the account open. Some accounts waive the monthly fee only if you maintain a minimum balance, so read the terms carefully.
What is the difference between a checking account and a savings account?
Checking accounts are designed for frequent withdrawals and payments; they usually have no limit on how many times you can withdraw. Savings accounts are designed to hold money; they traditionally limited withdrawals to six per month, though that rule has loosened. Checking accounts usually pay no interest; savings accounts pay interest but at a low rate.