Choosing the Right Bank Account for You

The best checking account and savings account for you will depend on your financial needs and priorities. 

When choosing a checking account, you’ll want to consider account fees, minimum-balance requirements, and how you plan to do your banking. With a savings account, you'll want to look primarily at the interest you can earn, minimum-balance requirements, and how often you’ll be able to access your money.

Banks and credit unions offer a variety of checking and savings account options. So, learn what’s available and choose carefully.

Credit unions, which are member-owned nonprofits, operate like banks but return profits to members through lower fees and higher interest on deposit accounts. There may be a credit union associated with your college or university that you can join as a student.

Types of checking accounts

Here are some key checking account options to consider:

• Basic checking account: This account works best for when you know you can keep only a small amount of money in your account on a regular basis. Some banks charge a monthly fee for a basic checking account. To have a free account, you may need to have a paycheck directly deposited into your account or maintain a minimum balance. If you go below the minimum required balance, even for one day, you could be charged a fee.
• Interest-bearing account: This type of account pays you interest on the money you keep in the account, but you'll need to maintain a higher minimum balance than with a nonpaying account.
• Express account: This account is best if you want to do your banking via ATM, cellphone, or online. The fees are usually very low.
• Student account: Some banks offer special checking deals to students, with potential perks such as low monthly fees, free checks, and no minimum balance. The benefits vary from bank to bank, so check out your local institution to see what it offers.

Types of savings accounts

Here are some key savings options to consider:

• Basic savings account: These accounts are easy to open and provide you ready access to your money. The accounts also usually pay a small amount of interest.
• Money market account: The minimum balance to open a money market account is usually steep—anywhere from $1,000 to $10,000. You'll earn more interest than with a basic savings account, but you may be able to make only a few withdrawals per month.
• Certificate of deposit (CD): When you open a CD, you agree to have your money unavailable to you for a set period of time in exchange for a favorable interest rate. The longer the term of the CD, the higher the rate. At the end of the term, which can range from six months to a few years, you'll receive your initial deposit plus the interest your account accrued. Should you need to cash out a CD before its term is up, you’ll be charged an early withdrawal penalty.

Finding the best bank for you

Once you know the type of checking account and savings account that you would like, you can begin shopping for the best place to do your banking.

Here are some important items to think about when determining the best bank or credit union for your financial needs:

• Location: Is there a branch or ATM near campus or where you live?
• Online banking options: Don’t overlook online-only banks. These banks might be able to offer you a good deal on a low-fee or no-fee checking account, as well as a good rate on a savings account.
• Minimum deposit/balance: Is there a minimum balance you must maintain in the account to avoid monthly maintenance fees?
• Student accounts: Is there a special account for students or a basic account with minimal costs?

For help in researching checking account offers from banks and credit unions, use the Comparing Checking Accounts Worksheet.