How to Choose a Bank: 7 Factors That Actually Matter

Skip the generic advice. These are the specific factors and real numbers that should drive your banking decision.

1

Fees

Monthly maintenance fees are the most avoidable bank cost. Online banks like SoFi, Chime, Ally, and Capital One 360 charge $0 with no conditions. Traditional banks charge $7 to $25 per month unless you meet balance or deposit requirements. Beyond monthly fees, check overdraft fees ($0 to $36), out-of-network ATM fees ($2 to $5 per transaction), wire transfer fees ($15 to $50), and paper statement fees ($2 to $5). A consumer who uses their bank's ATM twice a week, occasionally overdrafts, and has a $10 monthly fee could easily pay $300+ per year in avoidable fees.

2

Interest Rates

The difference between a traditional bank's savings rate (0.01%) and an online bank's rate (4.00% to 4.25%) is enormous. On $10,000 in savings, that is $1/year versus $400+/year. Even on checking accounts, some banks pay meaningful interest: SoFi pays 0.50% on checking, while Chase pays 0%. If you keep any meaningful balance, prioritize banks with competitive APY rates.

3

ATM and Branch Access

Consider your actual habits, not just preferences. If you have not visited a bank branch in the past year, you probably do not need one. If you deposit cash regularly (from tips, a cash-heavy business, or selling items), you need a bank with physical branches or cash-accepting ATMs. Online banks have the largest ATM networks by number (Capital One 360: 70,000+, Chime: 60,000+), but these are withdrawal-only at most locations.

4

Digital Experience

All major banks now have strong mobile apps rated 4.6+ stars. The real differentiators are specific features: early direct deposit (SoFi, Chime, PNC), automatic savings tools (Chime round-ups, Ally buckets), spending insights, bill pay integration, and Zelle support. Try downloading the bank's app and exploring it before opening an account.

5

Account Minimums

Most online banks require $0 to open an account with no ongoing minimum balance. Traditional banks often require $100 to $1,500 in daily balance to avoid monthly fees. If you cannot comfortably maintain those minimums, choose a no-minimum bank. Being charged fees because your balance dipped below a threshold is an unnecessary cost.

6

Customer Service

When you have a problem, you want it resolved quickly. Check: Is phone support available 24/7? Can you reach a person quickly? Is there a live chat option? For complex issues (fraud, disputes, account closures), in-branch service at a traditional bank can be faster and easier than phone support. Ally Bank is consistently rated highly for customer service among online banks.

7

Additional Services

Consider whether you want your bank to be a one-stop shop. Chase and Bank of America offer checking, savings, credit cards, mortgages, investing, and business banking all in one place. This can simplify your financial life and sometimes unlock relationship benefits (like fee waivers or better rates). Online banks typically offer fewer products but excel at what they do offer.

Quick Decision Framework

Answer these questions to narrow your choice:

Do you need to deposit cash regularly?

Yes: Chase (4,700+ branches) or your local bank
No: Consider an online bank (SoFi, Ally, Chime)

Is earning the highest savings rate your top priority?

Yes: Discover (4.25%), Capital One (4.10%), Ally (4.00%)
No: Focus on fees and convenience instead

Do you want branch access for complex issues?

Yes: Chase, Bank of America, PNC, or Wells Fargo
No: Online banks save you money with no trade-off

Is minimizing all fees the highest priority?

Yes: SoFi, Chime, or Capital One 360 ($0 everything)
No: Traditional banks work if you can waive fees

Still not sure? Take our 5-question Bank Finder Quiz for a personalized recommendation.

Common Mistakes to Avoid

Choosing a bank just for the sign-up bonus

A $200 bonus from a bank that charges $12/month means you break even in 17 months, then lose money. Choose based on ongoing fees and features, not one-time incentives.

Keeping all savings at a 0.01% APY bank

If you have $20,000 in savings at Chase (0.01%), you earn $2/year. At Ally (4.00%), you earn $800/year. That is $798/year left on the table for doing nothing.

Not reading the fee schedule

Banks bury fees in disclosure documents. Before opening an account, specifically check: monthly fee, overdraft fee, out-of-network ATM fee, wire transfer fee, and minimum balance requirement.

Ignoring overdraft policies

A single overdraft at Chase costs $34. Three overdrafts in a month costs $102. Banks like SoFi, Chime, and Capital One charge $0 for overdrafts. This difference adds up fast.

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Disclaimer: WhatIsTheBestBank.com is an independent comparison guide. We are not affiliated with any bank mentioned on this site. Rates, fees, and terms change frequently. All data was last verified April 2026. Always confirm current details directly with your chosen institution before opening an account.

Choosing a Bank FAQ

What is the single most important factor in choosing a bank?
Fees. A bank that charges monthly fees, overdraft fees, and ATM fees can cost you $300 or more per year. Since multiple excellent banks charge $0 for everything (SoFi, Chime, Capital One 360, Ally), there is no reason to pay fees unless you specifically need branch services that only fee-charging banks provide.
Should I choose a bank based on the sign-up bonus?
No. Sign-up bonuses are one-time payments ($100 to $300) that should not drive your banking decision. A bank that charges $12/month but offers a $200 bonus costs you $144/year after the bonus. A no-fee bank with no bonus saves you that amount every year going forward. Choose based on ongoing features, not one-time incentives.
How many bank accounts should I have?
Most financial experts recommend at least two: a checking account for daily spending and a high-yield savings account for your emergency fund and short-term savings. Some people benefit from a third account at a different bank for specific goals. There is no cost to having multiple free accounts.
Is it better to bank locally or nationally?
For most people, a national bank or online bank is better. Local banks and credit unions can be excellent for personal service and community involvement, but they often have fewer ATMs, less polished digital experiences, and lower savings rates. The exception is if you value a personal banking relationship for lending.
What is FDIC insurance and why does it matter?
FDIC (Federal Deposit Insurance Corporation) insurance protects your deposits up to $250,000 per depositor, per bank, per ownership category. If your bank fails, the FDIC guarantees you get your money back. Always verify your bank is FDIC insured before opening an account. You can check at fdic.gov/BankFind.
Can I try a bank before committing?
Yes. Most banks let you open an account with $0 and no commitment. You can test the mobile app, customer service, and features before moving your direct deposit or closing your old account. Give a new bank 30 days before making it your primary account.