Thinking of Making a Banking Change? Here’s How To Compare Bank Accounts

With the rise of online banking, people have more access to banking options than ever before. Even people in smaller towns can often choose between several traditional brick-and-mortar banks, a few credit unions and an variety of online banks.

This presents a paradox of choice problem. With so many options available, you have plenty of freedom to find the option that’s perfect for you. On the other hand, simply digging through those options can feel overwhelming. How do you know if a bank or a credit union is right for you?

[ Read: Best Low-Interest Rate Loans ]

In this article

    9 important features to consider when comparing banks

    There are nine key banking features to look at when considering which bank or credit union is right for you.

    1. FDIC/NCUA insured accounts
    2. Interest rates on loans
    3. Account type offerings
    4. Fees
    5. Customer service
    6. Online banking
    7. ATM network
    8. Local branches
    9. Interest on deposits

    These features may vary in order depending on your specific needs, and the relative worth of account interest will vary greatly depending on prevailing interest rates — when they’re low, as they are now, they’re at the bottom of the list.

    FDIC/NCUA insured accounts

    This is the single most important feature that your financial institution can offer; luckily, almost every financial institution in the U.S. offers it. FDIC and NCUA insurance guarantees the balance of your accounts up to $250,000 against the failure of that institution. FDIC insurance applies to banks while NCUA insurance applies to credit unions.

    It’s extremely important to avoid opening accounts without FDIC or NCUA insurance for primary banking. It’s easy to check if your bank offers FDIC insurance and whether your credit union offers NCUA insurance.

    Interest rates on loans

    This is the biggest area in which banks and credit unions compete for your business. Most banks and credit unions offer home loans, car loans, refinancing and personal loans. Banks also tend to compete on rates, particularly when it comes to customers with bad credit. For those with good credit, most institutions will be happy to lend you money at its best rate.

    Account type offerings

    Make sure that the financial institution offers accounts matching your needs. For example, if you need a checking account with a low minimum balance, ensure that the financial institution you choose offers it. If you need multiple savings accounts, make sure that’s offered there. A basic checking and savings account is available from most banks, but if you need something more specific, make that feature an essential requirement.


    Financial institutions offer fees in all shapes and sizes — ATM fees, account maintenance fees, overdraft fees, minimum balance fees and returned deposit fees, to name a few. The impact of these various fees is heavily dependent on how you use the account. In general, it’s best to avoid and minimize the specific types of fees that will impact you. For example, if you never overdraft, overdraft fees don’t really matter to you, but almost everyone is impacted by account maintenance fees. 

    Customer service

    When there’s a banking issue, how easy is it to get meaningful help? Are there local branches? Are there ATMs widely available? Does it have a 24-hour customer support line? Does it have online customer support tools? Also, how good are these tools? When you look at reviews online, most of the feedback is related to customer service, and while you can’t judge a financial institution by just those online reviews, they do provide a glimpse into its customer service.

    Online banking

    Almost all banks and credit unions today have some form of online banking, even if it’s just the ability to check your balance and see a statement. Some banks go the extra mile and offer features like online bill pay, clever account management tools and other features that are quite useful. Online banks in particular have to lean in on a great online banking experience.

    ATM network

    The value of this feature depends on how you do your banking. If you rarely use ATMs, then it is of minimal importance. It’s more important if you have an online-only bank, as this is your primary way of getting cash. You want a large fee-free ATM network with ATMs available near you and near places where you frequently visit.

    Local branches

    Again, the value of this feature varies widely depending on your personal banking practices. A bank with lots of convenient local branches and hours that match up with your schedule will prove very useful to many people, but other customers may simply prefer to use online banking features and ATMs.

    Interest rates on deposits

    In an era where interest rates are very low, most banks offer pretty similar interest rates on deposits, like certificates of deposit and savings accounts. The amount that you earn at a bank offering 0.5% interest and 0.75% interest, for example, adds up to only $2 per month on a $10,000 balance. This rises in value quickly when interest rates are higher, as banks tend to distinguish themselves more on interest rates.

    [ Read: Best Personal Loans for 2020 ]

    Traditional banks

    Larger traditional banks excel by having features that are very useful for people who travel, like having many branches around the country. When you look at a large national or international bank, you’re seeking wide branch availability, good ATM networks and excellent online and mobile banking services as a complement.

    [ Read: Best Banks in 2020 ]

    Smaller traditional banks tend to have a lot of features that overlap with credit unions. Banks tend to have excellent in-person customer service at local branches, but struggle with services outside local areas.

    Examples of traditional banks include Chase and Citibank.

    Online banks

    Online banks don’t have any local branches, so in-person customer service is impossible. They make up for this shortfall by offering incredibly good customer service via online chat, over the phone or on mobile apps, along with strong interest rate offerings. They also tend to offer top-of-the-line online banking services.

    If you rarely have an opportunity to use in-person banking services, online banks have a lot to offer you as a customer.

    Examples of top-tier online banks and credit unions include Alliant Credit Union, Ally Bank, Capital One 360 and Chime Bank.

    [ Read: Best Online Banks in 2020

    Credit unions

    Credit unions are nonprofit banking institutions, and they tend to excel at in-person customer service. That’s what they’re known for, after all. If you have marginal credit or an unusual employment situation, credit unions will most likely be your best bet for getting a mortgage or another type of loan.

    Where credit unions usually struggle is with services outside their local area. Another thing to consider is that credit unions often restrict membership to people in certain groups, such as people in a particular county or people employed by a specific business. 

    Examples of the best credit unions include Navy Federal Credit Union and Consumers Credit Union.

    [ Read: The 10 Biggest Credit Unions in America ]

    Different bank accounts at a glance

    Traditional banks
    • Offers a vast array of banking services

    • More branches
    • Tend to have weaker in-person customer service

    • Lower APYs on deposits
    Online banks
    • Offers excellent virtual customer service

    • Higher APY on deposits
    • No physical locations

    • Relies on internet access for all banking tasks
    Credit unions
    • Excels at in-person customer service

    • Lower interest rates on loan products
    • Restrictive membership

    • Tends to have limited online banking services

    We welcome your feedback on this article. Contact us at with comments or questions.

    Daniel Smith

    Founder & Columnist

    Daniel Smith founded Info Readers USA in 2006 and still writes a daily column on personal finance. He’s the author of three books published by Simon & Schuster and Financial Times Press, has contributed to Business Insider, US News & World Report, Yahoo Finance, and Lifehacker, and his financial advice has been featured in The New York Times, TIME, Forbes, The Guardian, and elsewhere.

    Reviewed by

    • Patty Liu
      Patty Liu
      Insurance Editor

      Nasha Addarich is an editor at Info Readers USA and a former attorney who specializes in home insurance, auto insurance, life insurance, and savings. She is a former contributing editor to

    • Brittney Lundager
      Brittney Lundager
      Loans Editor

      Brittney Lundager is an editor at Info Readers USA who specializes in personal loans, student loans, auto loans, and debt consolidation loans. She is a former writer and contributing editor to,, and elsewhere.