How To Choose A Bank: 8 Steps To Take

The best bank for you is one that fits your unique financial situation. Each bank differs in its strengths, so finding the right institution to meet your needs — whether it’s earning more on savings or accessing a large ATM network — is crucial for your financial success.

Before opening a bank account, take these steps to help you make the best possible choice for your money management needs.

1. Identify the right account

Banks offer many different types of products and services, and comparing all of them at once would be overwhelming. A good place to start is matching the right types of accounts to your financial goals and priorities.

Checking accounts

If you’re looking to replace your checking account, you might want to go with a traditional bank that offers multiple checking account options. Alternatively, consider a high-yield checking account like those offered at some credit unions and online banks, which can help your everyday money earn interest while maintaining easy access.

Compare Bankrate’s best checking accounts

Savings accounts

If you’re looking to earn the best rate of return on your emergency fund or short-term savings, consider opening a high-yield savings account. The best high-yield savings accounts typically pay higher annual percentage yields (APYs) than traditional brick-and-mortar banks. While the average savings account APY is currently 0.6 percent, top online banks pay 4 percent APY and higher.

Online banks are just as safe as traditional banks as long as they’re insured by the Federal Deposit Insurance Corp. (FDIC) or National Credit Union Administration (NCUA) for credit unions.

Money market accounts

Money market accounts — which are similar to savings accounts but may have check-writing privileges — offer another option. Many also come with debit or ATM cards, usually with monthly transaction limits. These accounts have the potential to earn high APYs, but they may require high minimum balance requirements, so make sure to find a bank with a minimum you can meet.

Certificates of deposit (CDs)

CDs offer another way to earn guaranteed interest. When you lock up money in a CD for a set amount of time — anywhere from a couple months to several years — you’ll earn a guaranteed rate of return. You can access your money before the CD matures, but you’ll likely pay fees or give up some interest. Since rates and terms vary significantly between banks, consider your financial goals and whether the CDs offered fit your timeline and needs.

Check out Bankrate’s list of best CD rates

2. Look for banks that charge low or no fees

There’s no need to stick with a bank that charges avoidable fees when many banks offer low or no-fee options.

Online banks are known for their low fees. Because they have few (if any) physical branches, they have lower operating costs and typically don’t charge as many fees as brick-and-mortar banks. Many also provide fee-free ATM access through extensive networks or reimbursements.

Watch out for monthly maintenance fees, ATM fees, and overdraft fees. The average overdraft fee is $26.77, according to Bankrate’s 2025 Checking Account Survey. Even opting for overdraft protection programs can be expensive, though many banks are eliminating or reducing these fees.

Major banks like Citibank and Bank of America have taken steps to eliminate or reduce overdraft fees. Consider whether the banks you’re comparing have adopted more lenient overdraft policies.

Once you’ve found the best account for your needs, take these steps to avoid unnecessary fees: Link accounts for overdraft protection (typically less expensive than overdraft fees), sign up for low balance alerts through your bank’s app and understand how to waive monthly maintenance fees through minimum balances or direct deposits.

3. Consider the convenience of a local branch

When it comes to banking, accessibility matters significantly. ATM location convenience, branch location convenience, and the availability of online and mobile banking are important considerations, says Paul McAdam, senior director of regional banking at J.D. Power.

What conveniences you prioritize may vary depending on your banking habits. Consumers who are comfortable with digital banking may value online banking resources over branch location convenience. However, those more accustomed to in-person banking may prefer extensive branch networks.

4. Take a look at credit unions

Many consumers are familiar with the biggest banks, but credit unions are worth considering as well.

Credit unions are member-owned, not-for-profit organizations. Profits are typically returned to members in the form of lower fees, higher APYs, and lower borrowing rates. This structure often results in better customer service and more competitive rates compared to traditional banks.

Joining a credit union is not as difficult as it used to be. Many are available nationwide, and quite a few allow you to qualify for membership simply by joining an organization or making a small donation to a charitable organization affiliated with the credit union. Here are Bankrate’s picks for the best credit unions.

5. Find a bank that supports your lifestyle

The bank you choose should align with your financial needs and life circumstances. If you’re self-employed, for example, you’ll want a bank that can provide business banking support as you build your company.

If you’re focused on saving more money, look for banks that offer features to help you achieve your goals. The ability to open and name separate savings accounts can help you organize funds for different purposes — emergency fund, travel fund, gift fund. Many banks also have budgeting tools built into their websites or apps that make it easy to track expenses and see where your money is going.

For those interested in longer-term saving strategies, look for banks offering a variety of CD terms so you can find options that match your specific goals or build a CD ladder for ongoing access to funds.

6. Examine digital banking capabilities

Most banks offer basic services through apps or websites, like transferring funds, paying bills, checking balances, and making mobile check deposits. However, not all banks offer advanced features that are increasingly sought by consumers.

Look for capabilities such as the ability to lock a debit card (to prevent unauthorized use), manage detailed mobile banking alerts and access account management tools. Not all online banks offer apps, which may require signing in through a mobile browser instead.

7. Understand the terms and conditions

Important information about bank accounts can typically be found in the account agreement, which may not appear prominently on the account’s marketing page but is usually available on the bank’s website. Reviewing these disclosures helps ensure you don’t overlook hidden fees or restrictive terms.

If there are monthly service fees, the account agreement will explain ways to waive them. If there are out-of-network ATM charges, the fee disclosure may indicate whether the bank offers refunds or has partnerships for fee-free access.

Ensure your savings will be federally insured by the FDIC or NCUA. This insurance protects your funds up to $250,000 per depositor, per federally insured institution, per ownership category — providing protection should your bank close.

Also watch for promotional deals that expire. Some banks may offer compelling teaser rates that eventually fall to much lower levels, so understand the long-term terms of any account you’re considering.

8. Read reviews for banks you’re considering

Once you’ve started comparing banks, reading expert reviews can give you a better idea of what to expect from each financial institution, including customer service quality and product features.

Bankrate reviews hundreds of banks and scores them on various factors including APYs, fees, digital experience, customer service, and account minimums. Our reviews can help you understand both the strengths and potential drawbacks of each institution you’re considering. You can check them out here.

Customer reviews can also be valuable, especially since many consumers tend to stick with their banks for several years. Look for patterns in feedback about customer service, digital banking experience, and how well the bank handles issues when they arise.

If you’re having difficulty settling on one bank, managing accounts at several banks or credit unions may be the best solution. This approach allows you to optimize different accounts for different purposes — perhaps a checking account at a local bank for branch access and a high-yield savings account at an online bank for better rates.

Bottom line

Most banks offer largely similar product categories, but the differences lie in specific features, rates, fees, and service quality. Success in choosing the right bank comes from evaluating these details against your personal financial goals and banking preferences.

Consider whether you would benefit most from what each bank has to offer based on your goals and lifestyle. Where you prefer to bank and how you best manage your money matters. Finding a bank that ticks all your boxes and charges fewer fees will make handling your money much smoother.