How to Choose the Best Bank Accounts for Your Banking Needs

Investment Decisions
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In most urban and suburban areas, there is often a bank on every corner and in every strip mall. Even small towns often boast multiple banking institutions.

So, it can be confusing to know where to bank and how to get the most for your money when there are so many options to choose from. Here are the main types of banking institutions—and the strengths of each type of institution—so that you can choose the best bank accounts for your specific situation.

Commercial Banks

Typically when you picture a bank in your head, you are probably thinking of a commercial bank. These are banks like PNC, Fifth Third, and TD Bank. Community banks also fall into this category as do most online banks.

Commercial banks typically offer a wide range of products including checking and savings accounts, CDs and mortgages. Commercial banks can vary widely in their fee structures and the interest paid.

Most major regional and national banks that have physical locations can’t beat the interest and low fees of online-only banks, but often offer more convenience in the form of many physical branches and branded ATMs.

Online Banks

Online banks are a relatively new phenomenon. These fall under the category of commercial banks, but don’t have physical locations.

Many people view online banks as the best bank accounts because they typically provide dramatically higher interest rates on savings, checking accounts, money markets, and CDs.

Some of the more popular online banks include American Express National Bank, E*Trade Bank, and Capital One 360.

Most online banks have a limited amount of services – they often don’t offer loans or mortgages – and they don’t have physical locations so you have to handle your money digitally and through ATMs.

Community Banks

Community banks also operate under the umbrella of commercial banks but are usually centered more locally in the communities they serve.

Generally speaking, community banks are competitive with national brick and mortar banks for interest rates and fees but are not as competitive as online-only banks.

Community banks are the best bank accounts for people who want to support their local community and want banking staff that takes the time to get to know them. They often don’t have as extensive ATM networks as national banks or online-only banks.


A thrift typically focuses mainly on home mortgages and savings accounts although they are not limited to these. Thrifts are less common than other kinds of banking institutions. Savings and loan associations, savings banks, and mutual savings banks all fall under the category of thrifts.

Thrifts are the best bank accounts for people who want a local experience and don’t need a wide array of banking services.

Savings and Loans

Savings and loans are very similar to commercial banks in the services they provide. Most of the time savings and loans have a strong emphasis on home mortgages and offer a personalized touch. Savings and loans are often locally owned and operated and there are few of them left.

One of the most interesting things about savings and loans is that they can be owned by their borrowers and depositors. Although, sometimes they are owned by a group of shareholders.

If you like the idea of banking with your neighbors in a community of people you trust then savings and loans may have the best bank accounts for you.

Credit Unions

Credit Unions offer much the same services as commercial banks do, but they are always non-profit and set up as a cooperative among members, which means they often have lower fees and better interest rates than large commercial banks.

Usually to join a credit union you have to be a member of a specific organization, like the military or live within certain geographic boundaries.

Some examples of the best credit unions include Alliant Credit Union, Pentagon Federal Credit Union, Langley Federal Credit Union, and Navy Federal Credit Union.

Credit Unions are good choices if you don’t need a national bank network and you are looking for higher than average interest rates and lower than average fees.

Final Thoughts on the Best Ways to Bank

Finding the best bank account for you depends on what you are looking for in a banking institution. If you want a personal touch then credit unions, savings and loans, thrifts, and community banks are good choices. If you are looking for convenience, then large national commercial banks may serve your needs better. And if you are looking for the best interest rates, then online banks are hard to beat.