How to Choose a Bank or Credit Union

Your bank should make managing money easier and cheaper, not harder. Here’s how to compare your options.

Banks vs. credit unions vs. online banks

• Traditional banks: Branches, wide ATM networks and a full range of products. Often higher fees and lower savings rates.
• Credit unions: Member-owned nonprofits. Often lower fees and loan rates. You need to qualify for membership, though many have broad eligibility.
• Online banks: Usually pay higher savings rates and charge fewer fees, but have no branches. Cash deposits can be harder.

Your checklist

1. Insurance: FDIC (banks) or NCUA (credit unions), up to $250,000 per depositor, per institution, per ownership category.
2. Fees: No monthly maintenance fee, or one that’s easy to waive.
3. Overdraft policy: No fees, or a low-cost overdraft option.
4. Savings rate: Compare APYs on savings and money market accounts.
5. ATM access: A large fee-free network or ATM fee refunds.
6. Mobile app: Mobile deposit, transfers, alerts and card controls.
7. Customer service: Hours and ways to reach a person.
8. Early direct deposit: Some accounts make your paycheck available a day or two early.

Mix and match

You don’t have to keep everything at one bank. A common setup is:

• Checking at a local bank or credit union with convenient ATMs.
• Savings at an online bank that pays a high rate.

Transfers between them typically take one to three business days.

How to switch banks

1. Open the new account.
2. Move direct deposit and update automatic payments.
3. Keep enough money in the old account for a month or two to catch any payments you missed.
4. Close the old account once it’s quiet, and get written confirmation.

Be cautious with fintech apps

Some money apps aren’t banks themselves; they partner with banks to hold your money. Before depositing, make sure you understand which bank holds your funds and how deposit insurance applies.