How to Choose a Bank for Your Checking Account

The bank you pick depends on where you bank now, how often you visit a branch, and what fees matter most to you

There is no single best bank for everyone. A bank that works for someone who deposits checks at a branch every week will not work for someone who never visits a physical location. Start by listing what you actually use: Do you need to deposit cash or checks in person? Do you carry a lot of ATM withdrawals? Do you keep a low balance most months? Do you want a human to talk to, or are you comfortable online-only? Once you know what you use, you can compare banks on those specific features instead of trying to evaluate everything at once.

The major choice is between a traditional bank with physical branches, an online-only bank, and a credit union. Each has real trade-offs. A traditional bank like Chase or Bank of America gives you a branch and ATM network, but charges monthly fees unless you meet balance or deposit requirements. An online bank like Ally or Charles Schwab has no monthly fee and often pays interest on your balance, but you cannot deposit cash or checks by walking in. A credit union is often cheaper than a traditional bank and may have better customer service, but you can only join if you meet membership requirements—usually living or working in a specific area, or belonging to a certain employer or organization.

Key Takeaways

• Traditional banks charge monthly fees unless you maintain a minimum balance or set up direct deposit, but they offer branches and ATMs you can visit in person.
• Online-only banks have no monthly fees and often pay interest, but you cannot deposit cash or checks by hand and customer service is phone or chat only.
• Credit unions often have lower fees and better rates than traditional banks, but membership is restricted to people who live, work, or belong to a specific group in their area.
• Before opening an account, check what the bank charges for overdrafts, out-of-network ATM use, and account inactivity, because these fees add up faster than monthly fees.
• You can open a checking account online in minutes, but you will need your Social Security number, a government ID, and proof of address.

Traditional banks: branches and ATMs, but watch the monthly fee

A traditional bank is what most people think of first: Chase, Bank of America, Wells Fargo, Citibank, and regional banks like PNC or US Bank. They have physical branches where you can deposit checks and cash, withdraw money, and talk to a person. They have ATM networks, sometimes nationwide. The trade-off is the monthly maintenance fee, which typically runs $10 to $15 per month.

You can avoid the monthly fee in most cases by meeting one of these conditions: keeping a minimum balance (often $500 to $1,500), setting up direct deposit, or maintaining a certain number of debit card transactions per month. If you do not meet any of these, you will pay the fee every month. Some banks waive the fee if you are under 18 or over 65, or if you are a student with a .edu email address.

The second hidden cost is overdraft fees. If you spend more than you have, the bank will cover the transaction and charge you $25 to $35 per overdraft. Some banks charge multiple overdrafts in a single day; others cap it at one per day. Read the overdraft policy before you open the account, because this is where people lose money fastest.

Online-only banks: no monthly fee, but no cash deposits

An online bank like Ally, Charles Schwab, Discover, or LendingClub has no physical branches and no monthly maintenance fee. Many of them pay interest on your checking balance—usually 0.01% to 0.05% per year, which is more than a traditional bank pays but not life-changing. They are cheaper because they do not have to pay for buildings and staff.

The catch is that you cannot walk in and deposit cash or a check by hand. You can deposit checks by taking a photo with your phone and uploading it through the app, which takes a few minutes and usually clears in one to two business days. To deposit cash, you have to transfer it from another account or use a third-party service, which costs money or takes time. If you rarely use cash and deposit checks only a few times a year, this is not a problem. If you get paid in cash or deposit checks weekly, an online bank will frustrate you.

Customer service is phone or chat only, which means you cannot walk into a branch if something goes wrong. Most online banks have good customer service, but you are not talking to someone in person.

Credit unions: often cheaper, but membership is restricted

A credit union is a nonprofit bank owned by its members. They typically charge lower fees than traditional banks, pay better interest rates, and have more flexible lending. The catch is that you have to meet membership requirements to join. You might be able to join because you live in a certain county, work for a certain employer, belong to a certain organization, or have a family member who is already a member. Some credit unions have very broad membership (anyone in a five-county area), and some are very narrow (employees of one company only).

To find credit unions you can join, use the CO-OP network search or the Alliant Credit Union locator. Search by your zip code or employer name and see what comes up. If you find one you can join, compare their checking account fees and features to a traditional bank and an online bank. Credit unions often have no monthly fee and no minimum balance requirement, which makes them cheaper than traditional banks for people who carry a low balance.

Credit unions also have ATM networks, though they are smaller than a big bank's network. Most credit unions participate in the CO-OP or Alliant networks, which means you can use ATMs at other credit unions for free. If you need a specific ATM network, check whether the credit union participates before you open an account.

Fees to compare before you open an account

Monthly maintenance fee is the most obvious cost, but it is not the biggest one. Compare these fees across any bank you are considering:

• Overdraft fee: Charged when you spend more than your balance. Ranges from $25 to $35 per overdraft. Some banks charge it multiple times per day; others cap it at one per day.
• Out-of-network ATM fee: Charged when you withdraw money from an ATM that is not owned by your bank. Ranges from $2 to $3 per withdrawal. If you travel or live far from branches, this adds up.
• Foreign transaction fee: Charged when you use your debit card outside the United States. Usually 1% to 3% of the transaction. Matters only if you travel internationally.
• Inactivity fee: Charged if you do not use the account for a set period, usually six months to a year. Ranges from $5 to $25. Rare, but check the fine print.
• Account closure fee: Some banks charge $25 to $50 if you close the account within a certain time frame, usually 90 days to a year. Uncommon, but read the terms.

A bank with no monthly fee but a $35 overdraft fee is more expensive than a bank with a $12 monthly fee if you overdraft once a year. Read the full fee schedule, not just the headline.

What you need to open an account

You can open a checking account online or in person. Either way, you will need the same documents. Have these ready before you start:

• Your Social Security number
• A government-issued ID (driver's license, passport, or state ID card)
• Proof of your current address (utility bill, lease, or bank statement dated within the last 60 days)

If you are opening an account online, you will upload photos of your ID and address proof, or answer security questions to verify your identity. The process takes 10 to 15 minutes. If you are opening in person at a branch, bring the originals and the process takes 20 to 30 minutes. Either way, your account is usually ready to use the same day.

Some banks will not open an account for you if you have a history of overdrafts or unpaid fees at other banks. They check a system called ChexSystems, which is like a credit report for bank accounts. If you have been denied before, ask the bank whether they use ChexSystems and whether you can see your report.

How to narrow down your choices

Start with the type of bank that fits your life. If you need to deposit cash weekly, rule out online banks. If you want no monthly fee and do not need a branch, rule out traditional banks unless you can meet their balance requirement. If you can join a credit union, compare it to at least one traditional bank and one online bank.

Then compare the three banks on the fees that matter to you. If you overdraft once a year, overdraft fee matters more than monthly fee. If you use out-of-network ATMs often, ATM fees matter more than monthly fee. If you keep a high balance, monthly fee does not matter at all because you will waive it. Make a simple table: bank name, monthly fee, overdraft fee, ATM fee, and any other fee you care about. The cheapest bank for someone else might not be the cheapest for you.

Once you have picked a bank, open the account. You do not have to worry about picking perfectly—you can close the account and move to a different bank if it does not work out. Most banks do not charge a fee to close an account, and moving your direct deposit and automatic payments takes a few phone calls.

Frequently Asked Questions

Can I have checking accounts at more than one bank?

Yes. Many people have a checking account at a traditional bank for branch access and a second account at an online bank for better interest rates or lower fees. You can transfer money between them instantly using the other bank's routing number. The only limit is that you can only have one account per Social Security number at each bank.

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

A checking account is for money you spend regularly—you get a debit card and checks. A savings account is for money you want to keep and earn interest on—you cannot spend it with a debit card. Most banks require you to open both, though some online banks offer checking only.

Do I need a minimum balance to open a checking account?

No. You can open an account with $0 and deposit money later. However, many traditional banks require a minimum balance to waive the monthly fee—usually $500 to $1,500. Online banks and credit unions typically have no minimum balance requirement.

What happens if I close my checking account?

The bank will close the account and send you any remaining balance by check or transfer to another account. Make sure you have moved your direct deposit and automatic payments to a new account first, or they will bounce. Most banks do not charge a fee to close an account, but read the terms to be sure.

Can I open a checking account if I do not have a Social Security number?

Some banks will open an account using an Individual Taxpayer Identification Number (ITIN) instead of a Social Security number. Call the bank and ask whether they accept ITIN. Credit unions are sometimes more flexible than traditional banks on this.