How to choose a bank in the U.S.
Choosing a bank account in the United States involves understanding your financial situation, weighing the tradeoffs between different institutions, and then applying for a bank that meets your specific goals.
Here are our top considerations to help guide you through the process:
Articulate your financial needs
First, take stock of your financial situation and understand what exactly you need from a bank.
Are you a student who wants a simple no-fee checking account that does not require a Social Security number? Or are you a mid-career professional who wants more sophisticated savings and investment accounts, along with the potential for other products like a personal loan or mortgage in the future?
Do you value immediacy and convenience, through an easy-to-use mobile app? Or do you want something that offers higher-touch personalization and in-person support?
Understanding this snapshot for your finances and aspirations will inform the type of bank, and bank account, that you apply for.
Understand the types of bank accounts:
Once you understand your financial needs, familiarize yourself with the different types of bank accounts that banks offer, from simple checking and savings accounts to Certificates of Deposits (CD) and other investment accounts.
Generally, most banks offer checking accounts, which come with a debit card and checks, but don’t pay you much interest on your deposits. Most also offer savings accounts, which limit you to six fee-free withdrawals a month and generally offer more interest than checking accounts. If you want other types of accounts, such as CD or investment accounts, look for providers that offer those specialized offerings.
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Understand the types of U.S. banking institutions:
Not all banks are created equal. There are several different types of institutions offering banking services, each with their own pros and cons.
Here’s a quick rundown of the main categories of banks in the U.S.:
National banks:
These established banks are the big names that you’ve probably heard of and typically have national or even international presence. Most maintain brick-and-mortar branches and ATM networks in major cities and may also have sleek online accounts, mobile apps, and sophisticated technology. While they often offer a wider range of account types, these accounts may have high fees, low interest rates, and minimum balance requirements that you should be aware of.
Regional and community banks:
Regional and community banks typically offer similar services to national banks, but are focused on a specific geographic region or community group. They may provide higher touch support for their members and even specialized products for certain diaspora or low-income communities, but they often lack the most up-to-date technology and have limited coverage beyond their region.
Credit unions:
Credit unions are member-owned non-profit organizations that offer banking services to their members. Membership can be limited to people who live in a certain area, work for a certain employer, or study at a certain university. Some credit unions can be joined with a simple donation. Since credit unions are member owned, they may offer higher interest rates on deposit accounts and lower interest rates on loans or credit cards than traditional banks.
Online banks and banking apps:
There are a handful of digital-first or digital-only banks that have built sleek user experiences to manage your finances without ever needing to walk into a bank branch. Several of these, often called “neo-banks”, are not actually banks themselves, but instead have built user-friendly apps and interfaces to offer checking accounts, credit products, and more from a banking partner.
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Compare bank coverage and features:
Once you have understood the types of accounts and institutions, start to compare the different coverage and features of various providers.
Decide if you need a bank that offers a high-touch brick-and-mortar experience or if a mobile app and online banking site is enough. Many specialty banking services, such as issuing physical checks or using a safety deposit box, may only be available from banks with physical locations.
If you are evaluating a national bank, credit union or regional player, check that it has ATMs and branches in your area. Wells Fargo, for instance, has a very extensive branch network on the West Coast of the United States, but lacks coverage relative to its East Coast peers like PNC and Truist.
Also check to make sure that the bank offers adequate safety features, such as FDIC-insured deposits and fraud protections (debit and credit cards offered through Visa and Mastercard networks typically provide this). While many neo-banks offer easy account opening and enticing perks like cash back, many do not have an established track record and have been known to close accounts abruptly when suspecting fraud.
Compare bank account fees and terms:
Banks offer different terms and charge various fees for their services, so familiarize yourself with the fine print of the bank account you’re interested in, with a particular eye on the following:
Interest rates:
The interest rate you earn on your deposits may vary greatly between banks, so shop around for the best price if you’re interested in growing your savings. While many national banks offer low interest rates on savings accounts, you can typically find higher rate accounts from credit unions and online-only banks.
Minimum balance requirements
Some banks require that you maintain a minimum balance in your account and charge you a fee if you do not. National banks may have these fees, whereas mobile-only “neo banks” and credit unions will typically not.
ATM fees:
Banks may charge a fee if you withdraw money from an out-of-network ATM. However, there are also banks, particularly national and international banks, that will not charge these fees—and some that even rebate you the fee that the ATM operator charges.
Other fees:
Check for other miscellaneous fees, such as paper statement fees, electronic transfer fees, and fees for not meeting other requirements (such as having direct deposits into the account).
Understand account opening requirements
Lastly, it is critical to understand what documents are needed to open an account, particularly if you are new to the United States.
As part of the bank account opening process, banks need to verify your identity through a Social Security number or other eligible document. If you haven’t been issued a Social Security Number (SSN), or don’t qualify for one, some banks might not let you open an account or may require that you go into a bank branch to apply.
In order to open a bank account without SSN at qualifying banks, you will generally need documents that can prove your name, date of birth, and address, as well a government-issued identification number of some kind, such as an Individual Taxpayer Identification Number (ITIN). Call your specific bank to understand their specific requirements and process.
Top U.S. Banks for Newcomers
For newcomers who bank with international financial institutions such as Citi, there may be the opportunity to streamline the account opening process with their American entities. Several Canadian banks, such as CIBC and Royal Bank of Canada, also make it easy for their Canadian members to open an account in the United States.
For everyone else who has recently moved to the United States, we have compiled the best banks for U.S. immigrants across different categories. Whether you are looking for an account with a great intro bonus or want something flexible for everyday use, this shortlist is a good place to start your search.
You can also browse the Finance tab of the U.S. Arrival Map and filter by “Checking” and “Savings” products for a more comprehensive list of newcomer-friendly banks.
The takeaway
Once you have figured out your bank account, it is important to get started with other essential services like credit cards and other credit products in the U.S. However, many of these products require that you have a good U.S. credit score, even if you are applying at a bank that you have an existing relationship with.
Fortunately, you can use Nova Credit to use your foreign credit history from certain countries to apply for several of these products and services from our partners. This means that you can apply for great credit cards, phone plans, and more from using your hard-earned credit history from back home—rather than needing to start from scratch. If you are approved for these products and manage them responsibly, you will start to quickly build a U.S. credit history.
Currently, Nova Credit serves individuals coming from Australia, Brazil, Canada, Dominican Republic, India, Kenya, Mexico, Nigeria, Philippines, South Korea, Spain, Switzerland, and the U.K.
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