How To Choose A Bank: 7 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 products and services, and comparing all of them at once would be overwhelming. A good place to start is matching 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 0.62 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

Money market accounts are similar to savings accounts but may have check-writing privileges and other convenient features. Many also come with debit or ATM cards, though these may have monthly withdrawal limits. These accounts have the potential to earn high APYs, but they may require higher minimum balance requirements than savings accounts at the same institutions. If you want to open a money market account, 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 month to several years — you’ll earn a guaranteed rate of return. Generally, if you need to access money before your CD matures, you’ll have to pay an early withdrawal penalty. 

Check out Bankrate’s list of best CD rates

Matching accounts to your goals

Think about your money’s job before choosing an account. Emergency funds need easy access, so high-yield savings accounts work best. If you’re saving for a house down payment in exactly two years, a CD can lock in today’s rates. But if you’re not sure when you’ll need the money, keep it liquid.

2. Look for banks that charge low or no fees

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

Watch out for overdraft fees, ATM fees and monthly service 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, such as Citibank and Bank of America, have taken steps to eliminate or reduce overdraft fees. If you have a history of overdrawing your bank account, look for banks with free overdraft protection and no overdraft fees.

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.

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.
• Understand how to waive monthly maintenance fees through minimum balance or direct deposit requirements.

3. Pick a type of institution based on the features you want

Before opening an account, make sure the institution offers the features you prioritize. Knowing what features you value can help narrow your search down to national banks, community banks, credit unions or online banks.

* However, many credit unions are part of the CO-OP network. This means members can freely visit any of the thousands of CO-OP Shared Branches and ATMs to complete basic in-branch banking tasks.

4. 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, such as an emergency fund, travel fund or 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.

5. Check the bank’s digital banking features

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 more advanced features that you may find valuable.

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 banks offer apps; some may require you to use a mobile browser instead. 

Some apps are more user-friendly than others. Check recent customer reviews of a bank’s mobile app on the App Store and Google Play to get an idea of its performance.

6. 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 may sound boring but it ensures 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.

Additionally, make sure 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.

Finally, watch for promotional deals. 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.

7. 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 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. Check out our bank reviews 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, responsiveness and digital banking experience.

Why pick just one?

If you’re having difficulty picking one bank, managing accounts at several banks or credit unions may be the best solution. You can pick the best account for each of your needs. “I maintain an interest-bearing checking account at a local credit union, but as my savings grew, I decided to open a high-yield savings account at Everbank,” says Bankrate editor Pippin Wilbers. “I get the convenience of easy deposits for my checking account and higher rates on my savings — the best of both worlds.”

Bottom line

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

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 a much smoother experience.