Since the origin of modern commerce, banks have served a variety of essential functions. Banks can help provide individuals with a place where they know their money can be safe and can even increase in value (at least marginally). Banks can also help make loans to those who are in need of access to capital in the status quo.

However, with over 5,000 FDIC-insured banks to choose from, knowing which bank is the best for you can be incredibly difficult. Though many of these banks may seem similar to each other, there are several important details that ought to affect your final decision.

By keeping an eye out for these relevant variables, finding the best banks for you is something that can become much more possible.

FDIC Insured

Before opening a bank account anywhere, it is important to make sure that the bank itself is insured by the Federal Deposit Insurance Commission (FDIC). This ensures that not only will all of the money in your account be protected for up to $250,000, but also that the bank itself has established some credibility within the industry.

The FDIC was created shortly after the Great Depression in order to prevent people panicking and withdrawing all of the money from their bank accounts. Knowing that even if your bank were to fail overnight (something that is unlikely to happen, but still a distinct possibility), your money will still be safe.

Interest Rates

One of the most important things to take a look at when comparing different banks is the interest rates they offer on each of their accounts. When you make a deposit at a bank, “your” money doesn’t just sit in a vault. The bank invests the money in various places, earns a return on their investment, and gives some of this return back to each of their customers. Interest rates determine how much you will earn by keeping your money in a specific bank account.

Interest rates are typically quoted on how much you will earn on your deposit per year. This is known as the annual percentage rate, or APR. When compared to other investment options—such as stocks, bonds, real estate, and commodities—even the best interest-paying banks typically offer very low-interest rates. However, though these figures are recognizably low, choosing the best interest paying banks may earn you enough to justify making a switch.

Types of Accounts Available

Even though you may only be looking to open one specific type of banking account today, you will likely want to have the flexibility to make changes in the future. The best banks are the ones that are able to offer a wide variety of different accounts and make it easy to reorganize and redistribute your assets as your life and financial circumstances change over time.

The two most commonly used types of bank accounts are checking accounts and savings accounts. Checking accounts usually have the lowest interest rates, but are easy to access and will often allow unlimited withdrawals. Savings accounts usually offer marginally higher interest rates, but typically have some restrictions associated with them (such as the number of times you can withdraw per month). Other common types of bank accounts include money market accounts, college savings accounts, various retirement savings accounts, and numerous others.

Minimum Deposit Requirements

Another important variable to look at before investing your money in a specific bank is the minimum deposit requirements associated with each type of bank account. These requirements can influence the general liquidity of your financial portfolio, the effective interest rate you are earning each year, and whether or not choosing a specific type of account will be in your best interest.

Usually, bank accounts that have higher minimum deposit requirements are the ones that are able to also offer higher interest rates and various other perks. If you can be confident in the fact that you will not need to access a certain amount of money for the foreseeable future, then these requirements will likely not have a major impact on your final decision. But if you will need to access all of your money soon, this is certainly something worth looking into. Though you will be able to withdraw below the monthly minimum, there will be a fee associated with these withdrawals that may negate any money you’ve earned in interest.


Fees are one of the most important things to look at when comparing different banks (and even different bank accounts within the same bank). A bank that has relatively high-interest rates but has even higher fees may cause you to be effectively losing money as time goes on. Whether or not a bank account will be the right choice for you will depend on your personal activity, your goals, and the amount of money you are planning on investing.

There are many different fees that a bank account may possibly have. These fees can include overdraft fees, ATM usage fees (especially if the ATM belongs to a different bank), account opening fees, annual fees, and several others. Fortunately, many banks are willing to waive these fees depending on certain situations. Federal regulations require all of these fees to be disclosed to the customer when opening a new account.


In addition to the modest amount of interest you will earn when keeping your money in a bank, most banks try to offer several other perks in an effort to attract new customers.

Some of these perks will be related to your account itself and include things such as ATM usage waivers, money for opening a new account, possible increases in interest rates, and even annual bonuses. Other perks will be related to things outside of your bank and include things such as tickets to sporting events, travel benefits, and various rewards for helping the bank acquire other new customers. These perks will be relatively limited, but if you are on the fence between two options, they may help you make your final decision.


Lastly, the intangible factor you need to be thinking about when comparing different banks is whether or not the bank is actually trustworthy. Figuring out how to choose a bank based on trustworthiness can be difficult, but there are a few red flags you should be keeping an eye out for.

The best banks are the ones who are willing to be upfront about everything—both the pros and the cons—associated with each account and help you make a decision that is objectively in your best interest. Banks that deliberately conceal information, try to oversell you on their services, or have a history of predatory practices, are the ones you should always try to avoid. With over 5,000 banks to choose from in the United States, you hold the power as a consumer.

About the Author

James is an avid investor in real estate and the stock market. He has found an edge in his real estate investing with digital marketing.