Banking Basics
What Is Banking?
Banking is a wonderful way to keep your money safe and secure. The money you keep in a bank is ideal for quick access and everyday use, and while you may occasionally receive interest, it will likely be minimal. There are many different types of banks, such as traditional banks like Chase, Wells Fargo, and Bank of America. These banks provide a wide range of services, but they often charge fees and offer lower interest rates.
What Are Credit Unions?
Credit unions are a type of banking institution that is entirely member-owned and operates on a not-for-profit basis. This means that they can offer better interest rates and lower fees but will likely be limited to specific communities or professions.
Online Banking Explained
Online banks, on the other hand, operate entirely online, like Ally, SoFi, and Discover Bank. Online banks usually offer higher savings rates and fewer fees, but they don't have any physical locations, making ATM access and lack of in-person services an issue.
Common Banking Fees
There is a wide range of different banking fees, such as monthly maintenance fees charged for just having an account, overdraft fees if your balance goes negative, ATM fees for out-of-network withdrawals, and minimum balance penalties for accounts that don't meet their minimum, to name a few. You must pick a bank that fits your needs and avoid any unnecessary fees.
Is Your Money Safe?
Some people are concerned about what would happen if the bank failed. Well, that's why we have FDIC insurance that covers most banks, but it still is important to check that your bank of choice is covered. FDIC insurance covers up to $250,000 in case the bank collapses. The NCUA provides the same protections for credit unions.
Types of Bank Accounts
Now let's dive into all of the different types of accounts and see when they are useful.
Checking Accounts
The checking account is the standard daily spending account with unlimited withdrawals and links to other payment platforms such as Venmo, PayPal, Cash App, etc.
Savings Accounts
Savings accounts are intended for medium to long-term storage of money while earning interest. They often have a withdrawal limit of 6 per month.
High-Yield Savings Accounts (HYSA)
High-yield savings accounts, or HYSAs, are for people who want better returns than a savings account with the same low risk. They usually earn about 4–5% with online banking and offer no fees or minimums. The only issue is that these savings accounts are almost only seen at online banks and have slower transfers into external accounts.
Money Market Accounts
Money market accounts are a mix of checking and savings accounts, but with higher interest, they offer competitive rates, and some even offer debit cards. The issue with money market accounts is that most of them require a minimum balance and limit the number of withdrawals.
Certificates of Deposit (CDs)
Certificates of deposit, or CDs, are a deposit with a fixed interest rate for a set term. They offer higher interest rates than savings accounts, but there is a penalty if you withdraw early.
Joint Accounts
Joint accounts are shared bank accounts between couples, partners, families, etc., making them a pool for everyone to reach into and making things easier when splitting bills. Due to their shared nature, trust plays a crucial role in preventing any potential collapse.
Popular U.S. Banks & Credit Unions Comparison (2025)
| Institution | Type | Monthly Fee | Savings APY | ATM Access | Overdraft Policy | Min Balance | Customer Support |
|---|---|---|---|---|---|---|---|
| Chase | Traditional Bank | $12 (waivable) | ~0.01% | 16,000+ ATMs | $34 per item (max 3/day) | $0 | Phone, Branch, Chat |
| Bank of America | Traditional Bank | $12 (waivable) | ~0.01% | 16,000+ ATMs | $10 per item | $100 | Phone, Branch, Chat |
| Wells Fargo | Traditional Bank | $10–$12 (waivable) | ~0.01% | 12,000+ ATMs | $35 per item | $25 | Phone, Branch, Chat |
| Capital One | Traditional / Online Hybrid | None | ~4.25% | 70,000+ ATMs | No overdraft fees | $0 | Phone, Branch, Chat |
| PNC Bank | Traditional Bank | $7–$10 (waivable) | ~0.01% | 60,000+ ATMs | $36 per item | $25 | Phone, Branch, Chat |
| TD Bank | Traditional Bank | $15 (waivable) | ~0.02% | 2,600+ ATMs | $35 per item | $100 | Phone, Branch |
| Ally Bank | Online Bank | None | ~4.20% | 43,000+ Allpoint ATMs | Free overdraft transfer | $0 | Phone, Chat |
| SoFi Bank | Online Bank | None | ~4.50% | 55,000+ ATMs | No overdraft fees | $0 | Phone, Chat |
| Discover Bank | Online Bank | None | ~4.25% | 60,000+ ATMs | No overdraft fees | $0 | Phone, Chat |
| Navy Federal CU | Credit Union | None | ~0.25% | 30,000+ CO-OP ATMs | $20 per item | $5 | Phone, Branch, Chat |
| Alliant CU | Credit Union | None | ~3.10% | 80,000+ ATMs | No overdraft fees | $5 | Phone, Chat |
| PenFed CU | Credit Union | None | ~0.05% | 85,000+ ATMs | $30 per item | $5 | Phone, Chat |
Rates and fees accurate as of June 2025. "Waivable" means fee may be avoided by meeting direct deposit or balance requirements. Always verify with the institution directly.