Once you determine the bank where you want to open an account, you’ll generally have a variety of account types and services to choose from, including:
- Checking accounts: Use these for making payments and receiving direct deposits.
- Savings accounts: These accounts allow you to earn interest.
- Money market accounts: These products sometimes earn slightly more interest than savings accounts (while maintaining your access to cash).
- Certificates of deposit (CDs): These products can earn much more than savings accounts but require you to lock up your funds for a certain period.
- Loans: Depending on your credit score and payment history, you may be able to take out one of several types of loans (auto, home, personal loans, for example).
Within one of the above categories, a bank may offer multiple products, each with a different name and level of service. Premium accounts that come with more features have correspondingly higher fees (like monthly service fees, ATM fees, and overdraft fees) and higher thresholds to avoid the service fee.
A general rule of thumb is to choose an option with a mix of features and fees that meet your needs and budget. For example, if you think you won’t keep a lot of money in the account, you may want to open a bank account with a low initial deposit and low or no minimum balance and fee requirements so you don’t get stuck paying unnecessary fees.
If you’re viewing a bank’s products online, you might have to drill down to the product that is right for you. For example, you might have to click “Open an Account,” and then click “Checking” and peruse the options for free checking, if that’s what you’re looking for. If you open your accounts in person, chat with a banker to find the best account for your needs. Generally speaking, you’ll only want to bank where your money is protected by FDIC insurance (or NCUSIF coverage if you use a credit union).
Avoid accounts that require a large balance to qualify for fee waivers unless you plan to keep that amount in the account and intend to use the special account features. But bear in mind that even a “free” account might impose some fees even if it has no monthly maintenance fee.