How to Compare Banks and Credit Unions

If you’re moving to a new area, or if you’re just fed up with your current bank, then it’s time to choose your next financial home.

Choosing the right bank or credit union is going to have a lasting impact on your financial path over the next few years — possibly even the rest of your life. It isn’t a choice to make lightly, but you shouldn’t be overburdened by choice paralysis either. Depending on where you live, there may be several banks and credit unions to choose from in the immediate area. And with a swarm of non-traditional online banks entering the market, your choices are broader than ever before.

Thankfully, there are a few simple steps you can take to narrow down your search. You’ll also have to make an important decision about which type of financial provider you need, whether it’s a bank or a credit union. Here’s how to move forward.

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    Make a list of accessible banks and credit unions.

    First, make a list of all the banks and credit unions in your area that you can reasonably access. Physical access can be important if something goes wrong. Instead of calling a hotline and waiting on hold, you can walk into your bank or credit union and speak to a representative face-to-face.

    During this step, you can also rule out any banks or credit unions you already know you don’t want to use. You can also research online-only banks if you’d like to add those to your list.

    Online-only banks do offer great services in some regards, but they’re often better for secondary banking purposes like keeping a savings account for a specific goal. The absence of a physical branch can be risky if something goes wrong. For example, if you’re locked out of your checking account due to a banking error, you’ll have to go through the online bank’s customer service channels to resolve the situation.

    Check the features of each one.

    For each of the banks and credit unions you’ve listed, go to their website and find out a few facts about them. Start a document on your computer to keep track of this information as you compare banks, so that you have a single central place with which to compare options.

    What is the interest rate they offer on the standard savings account balance? Consider how much money you typically have in savings, then use that to identify your savings account rate for that balance.

    You’ll likely want to go with the bank or credit union that offers the best interest rate on savings accounts. However, access to your savings is also something to consider. Federal regulations allow no more than six withdrawals from savings accounts per billing cycle, but some banks may allow fewer without charging a fee.

    What’s offered for a standard checking account balance? Do the same exact calculation with the checking account if it offers an interest rate. Many checking accounts don’t, but they may offer other benefits such as free checks, online bill-paying tools, and a low minimum monthly balance. There are all factors to write down and consider.

    What fees are charged on the accounts you expect to have with them? This step will take a little more homework, as banks typically aren’t completely upfront with fees. Several federal laws require banks to disclose fees, but they don’t often need to disclose this information until they are on the verge of closing a sale — and often in the fine print.

    Some of the most common fees are account maintenance fees, minimum balance fees, ATM fees, overdraft fees, returned deposit fees and out-of-network ATM fees.

    If you’re having trouble finding this information, there are a few things you can try:

    • If the bank has a web page dedicated to frequently asked questions (FAQs), there may be information about their fees there.
    • Do an online search for the bank’s name followed by the term “fee schedule” or “schedule of fees.” A fee schedule is a bank’s complete listing of fees. You can also search the bank’s website exclusively by typing “ fee schedule” or “ schedule of fees” into Google search.
    • Contact the bank directly to ask them about its fees.

    What are people saying about the bank or credit union? Once you have this basic information on several banks and credit unions, go online and find out about their reputation. Are there a lot of negative reports about the bank? Banking horror stories? Criticisms? Most banks will have one or two bad stories out there, often written up by people who have unrealistic expectations or are hiding key parts of their stories, but large quantities of bad reviews are a telltale sign of some problems that you want to avoid.

    Banks vs. credit unions

    At this point, a few financial institutions should be clearly ahead of the pack. Likely, you have a mix of banks and credit unions on your shortlist. Your next step is to determine which type of financial institution is best for you.


    You’re probably already familiar with traditional banks. Some of the largest financial institutions, like Bank of America, Wells Fargo and Citibank fall into this category. There are also smaller, regional banks, which you may not be familiar with unless you live near them.

    Banks are for-profit financial institutions that typically have a large footprint. A bank has several branches and ATMs in its network, and it’ll likely have more options available for credit cards and investment products. Many banks have dedicated online financial tools and apps.

    Chris Terschluse, head of content and marketing at Chime, points out the following: “Typically, traditional banking institutions are larger operations than credit unions, equating to better ease of access. They tend to be at the forefront of new mobile banking technology as well.”

    Credit Unions

    On the other hand, credit unions are nonprofit institutions that are typically much smaller than banks. They don’t have customers. Instead, they have “members,” each of whom owns a share of the credit union. While credit unions don’t have large branch and ATM networks like big banks, they usually provide a more hands-on approach to customer service.

    Valerie L. Moses, senior relationship manager, community engagement and partnerships at Addition Financial Credit Union, explains that credit unions exist solely for the benefit of their members.

    “Although they offer the same types of products and services as traditional banks, credit unions return their profits to their members in the form of better loan rates, higher interest rates and fewer fees,” she adds. “Instead of following a one-size-fits-all approach, credit union employees work to understand the needs of their members and help them make the best decisions to achieve their goals.”

    Online Banks

    It’s also possible that you still have the third option on your shortlist: non-traditional online banks.

    Again, you may be reluctant to use an online bank because there’s no physical branch to visit. If something goes wrong, you can’t walk into your local branch to resolve it. Online banks don’t usually offer many financial products. They’re often catered to a very specific type of consumer, and they may be better suited for secondary banking.

    That said, there are some benefits to online banks.

    “Without the overhead of physical locations, online banks typically offer better interest rates and fewer fees,” adds Terschluse. “One consideration is that you’ll be forfeiting in-person locations and face-to-face banking, but most institutions also allow you to access funds without a fee at in-network ATM locations.”

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    Michael Rand

    Contributing Writer

    Michael Rand is a business and personal finance writer based in Beverly, Massachusetts. He holds a master’s degree in writing from Salem State University and spent years producing content for financial services clients as an agency writer. His work has been featured in publications like, Info Readers USA, and