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How to Choose a Bank

In this article

  1. What type of bank should I use?
  2. What qualities should I look for in a good bank?
  3. Which bank is best for me?
  4. FAQs
  5. Final thoughts

Choosing a bank is not a decision that should be taken lightly. Look for a bank that makes the process of managing and storing your money easy, and one that fits in with your lifestyle needs and financial goals.

Melanie Lockert • September 22, 2021

You’re just starting to make some dough and you should start stashing it away in a bank account. But if you’re currently bankless, you might wonder how to choose a bank for the first time. What should you consider? Where do you even start? With so many options out there, how do you cut through the noise?

It’s not easy, but this guide is here to break down the process of helping you choose a bank for the first time and to help you better manage your hard-earned money.

What type of bank should I use?

The good news is there’s no shortage of banking options out there. There really is something for everybody. The bad news is, it can be overwhelming to choose.

As a young adult, it’s tempting to want to hop on whatever bank your parents have. But you’re part of a new generation, so it’s important to choose a bank that fits your lifestyle and financial needs. 

When it comes to banking, you typically have 3 choices:

  1. A traditional bank. These are brick and mortar banks that typically have a variety of locations. Your “big banks” fall under this category and typically offer many financial products and services. These traditional retail banks may also have monthly maintenance fees, minimum fees, overdraft charges, and ATM fees.
  2. A credit union. Credit unions are like banks, but instead of being privately owned, they are non-profit organizations that are owned by their members. Credit unions offer many of the same products and services as banks, but they may be able to offer lower fees and higher interest rates than a traditional bank.
  3. An online bank. Online banks are financial institutions that don’t have any branches but offer banking capabilities via the Web and your smartphone. Because these online banks save money on physical locations, many of them have higher interest rates on savings accounts and lower fees than traditional banks.

With any of these options, you will be able to open a checking account and you can also opt for a savings account.

What qualities should I look for in a good bank?

There is a lot to consider when choosing a bank. Many banks and financial institutions offer the same basic services, so it’s important that you understand what features to look for in a good bank. Consider the following features, services, and accessibilities:

Low fees 

Overdraft fees, ATM fees, and monthly maintenance fees, oh my! These additional costs can add up over time, especially if you’re not careful. Keep in mind that traditional banks commonly have more fees than an online bank because of the costs required to maintain a physical branch. So if you’re looking to save money, it’s best to look for a bank account with low or no fees.

High interest savings rates 

If you really want to get more bang for your buck, interest rates can be a big deal. To start, look into banks that offer a High Yield Savings Account, with high annual percentage yields (APYs). These might not seem like a lot at first, but even the little things can build up over time.

User-friendly online accessibility

These days, the ability to easily access, manage, and move your money around online is important. You’ll want to look for a bank that has a great website and an intuitive mobile app, because, let’s be honest, do you really want to visit a physical location every time you look at your finances?

Strong security 

Your money is a physical representation of your hard work, so you want to keep it safe, right? Check out reviews online about the banks you are considering and make sure they are backed by the Federal Deposit Insurance Corporation (FDIC). Under the FDIC, your balances are insured for up to $250,000. If you’re going the credit union route, make sure they’re backed by the National Credit Union Administration (NCUA), which also covers up to $250,000. These certifications mean that — if something happens to your bank in a worst-case scenario — you’ll get all of your money back safely.

ATM access

If you need cash, will you be able to easily get some? You want to choose a bank that has ATMs in your area. ATMs can be super convenient for grabbing money on-the-go, but if they’re out of your banking network, many can come with additional fees. Choose a bank with a wide network of fee-free ATMs close to you.  

🔥 Pro Tip: Online banks tend to have better rates than traditional banks, because they don’t have to pay for the upkeep of physical branches.

Which bank is best for me?

Ultimately the best bank for you is going to be the one that provides you with the best financial peace of mind. A good bank that gives you financial peace of mind is one that:

  • Doesn’t charge unreasonable fees
  • Gives you easy access to your money
  • Offers good interest rates on your accounts
  • Has user-friendly online and app-based banking services
  • Is trustworthy and reliable with your money
  • Provides excellent customer service

Before choosing which bank to go with, go down this checklist to make sure you’ve done all of the following. Then you will be ready to make your final decision.

Checklist for choosing a bank

✅  Identify the bank account that fits your lifestyle and financial needs.

✅  Examine the advanced digital features the bank has to offer.

✅  Understand the terms and conditions.

✅  Read consumer and expert reviews on the banks you are considering.

✅  Pinpoint the type of accounts, services, and features you are looking for.


What are the fees I should be aware of when choosing a bank?

Most traditional banks will charge an assortment of fees to maintain your account. A bank may waive or lower them if you meet certain criteria, such as meeting and maintaining a minimum balance requirement or setting up direct deposit for your paychecks.

It’s important to understand what a bank will charge you for opening and maintaining an account. Here are some of the most common bank fees you are likely to encounter when shopping around for banks:

  • Monthly maintenance fees
  • Overdraft fees
  • Statement fees
  • Stop payment fees
  • Returned check fees
  • Wire transfer fees
  • Cashier’s check fees
  • Certified check fees
  • Out-of-network ATM fees

What should I look for in a checking account?

Before you open a checking account, consider these factors:

  • Insurance
  • Minimum deposit requirements
  • Fees
  • ATM network
  • Interest and rewards
  • Mobile app features

Final thoughts

If you’re on a quest to figure out how to choose a bank for the first time, don’t fret. The perfect bank for your lifestyle is out there — waiting for you. Just remember: before picking a bank, read the fine print and make sure you have ultimate control over your money. Your bank should be your ally, not your next frenemy.

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