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How banks structure checking and savings accounts

Understanding how banks design their account offerings helped us evaluate which institutions provided the most value to consumers.

Banks build checking accounts for everyday use. Basic checking accounts offer debit card access, bill pay, and mobile deposits for regular spending. These accounts usually pay little to no interest. Premium checking accounts include extra benefits like ATM fee refunds and interest on balances, but they require higher minimum balances or regular direct deposits.

Savings accounts are designed to help money grow rather than for frequent spending. Traditional savings accounts at physical banks offer lower interest rates but let customers visit branches in person. High-yield savings accounts, mostly from online banks, pay much higher interest rates because they don't have the costs of running physical branches. These accounts may limit how many times customers can withdraw money each month and don't usually offer in-person banking.

Money market accounts combine features from checking and savings accounts. They pay higher interest rates than regular savings accounts and let customers write checks or use a debit card. These accounts typically require higher minimum balances than standard savings accounts.

How banks determine fees and interest rates

Fee structures and interest rates have a big impact on account value, and understanding these helped us evaluate overall banking costs for consumers.

Monthly maintenance fees are the most common bank charge, ranging from $0 at many online banks to $25 or more at traditional banks. Banks usually waive these fees when customers meet certain requirements like keeping a minimum daily balance, getting regular direct deposits, or linking multiple accounts. The requirements vary widely. Some banks require a minimum balance of $500, while others require $5,000 or more.

Overdraft fees happen when account holders spend more than what's in their account. These fees typically cost $25 to $35 for each transaction. Some banks offer overdraft protection by linking accounts or providing small buffer amounts, while others have gotten rid of overdraft fees completely. Understanding these policies helped us identify consumer-friendly institutions.

ATM fees work in two ways: the account holder's bank may charge $2-$3 for using an out-of-network ATM, and the ATM owner usually charges $2-$4. Some banks refund these fees up to certain monthly limits, while others give access to large ATM networks to help customers avoid charges.

Interest rates on savings accounts change based on Federal Reserve rates and what other banks are offering. Banks adjust these rates regularly based on market conditions.

How banks structure account benefits and features

Modern banking features have a big impact on daily account management, and evaluating these helped us identify institutions that best served different customer needs.

Mobile banking apps let customers access their accounts 24/7 to check balances, deposit checks, transfer money, and pay bills. Banks with strong mobile features offer services like Zelle for sending money to other people, mobile check deposit with quick access to funds, and real-time alerts about spending.

ATM access networks determine how easily account holders can get cash without paying fees. National banks typically have their own large ATM networks, while smaller banks and online banks often partner with ATM networks like Allpoint or MoneyPass, which may offer 40,000+ fee-free locations.

FDIC insurance protects deposits up to $250,000 per person, per bank, per account type. All banks we chose have FDIC insurance, which means the federal government protects customers' money if a bank fails. All the credit unions on our list have the equivalent NCUA insurance. This standard protection keeps deposits safe no matter which institution customers choose.

Customer service availability ranges from 24/7 phone support and live chat at some banks to limited hours at others. Banks with strong customer service typically offer several ways to get help, including phone, chat, email, and in-app messaging. Physical branches provide face-to-face service but may only be open during business hours.

How banks determine account eligibility

Banks use different criteria to approve account applications, and understanding these requirements helped us evaluate accessibility to different consumers.

ChexSystems reports work like credit reports but for banking. They track account closures, overdrafts, and fraud issues. Banks review these reports when someone applies for an account. Consumers with negative ChexSystems histories, such as unpaid overdraft fees or closed accounts, may have trouble opening accounts at traditional banks. Some banks offer accounts to people with past banking problems, sometimes referred to as second-chance bank accounts.

Identity verification requires applicants to provide a government-issued ID and Social Security number. Some online banks accept Individual Taxpayer Identification Numbers (ITINs) for non-citizens. Banks verify identity through databases and may ask for additional documents if they can't verify someone electronically.

Initial deposit requirements vary by account type and bank. Some checking accounts open with no initial deposit, while others require $25 to $100 to start.