When it comes to your personal finances, the two things you should be able to trust absolutely are your pocket calculator and your bank. Your paycheck may not be around in three months, economists might as well be reading tea leaves in 2019, but your bank should never leave you in the lurch.
Here’s the thing, though: not all banks are created equal. The best national banks are those with a proven track record of good customer service, clear, easily understandable policies, and integrity. Why is this important?
Table of Contents
- 1 Wolves on Wall Street: Why You Should Choose a Trustworthy Bank
- 2 The Best National Banks in the U.S.A. Are all FDIC Members
- 3 What Is the Best Bank in America?
- 4 So, Which Bank Is Better for Me?
Wolves on Wall Street: Why You Should Choose a Trustworthy Bank
Judging by most banks’ advertising, they want nothing but the best for their customers, hold themselves to the highest ethical standards…and every one of their employees loves dogs. What they forget to mention is that U.S. banks have been fined over $243 billion since the 2008 financial crisis. Some of this money was forked over in cash, but much of it was “paid” by canceling or restructuring loans they should never have made in the first place.
Only 13 banks account for 93% of the fines levied, proving that there are indeed some reliable banks out there. Most of this staggering sum relates to the crisis itself, in particular how some bad apples lied to both investors and “sub-prime” borrowers. What’s interesting, though, is that other charges include violating sanctions against rogue states, assisting tax evaders and rigging financial markets – even after 2010.
In some cases, banks committed outright fraud against their own customers, in others, they failed to report suspicious transactions that may have been linked to drug smuggling. Thousands of people lost their homes due to foreclosures based on effectively forged documents.
All this isn’t meant to scare you off banking completely; the best banks in the U.S don’t rip people off. Here at ProMoneySavings, it’s our mission to give you the best guidance possible, and we feel that an organization that has bent the rules in one case might well do so again. A few banks that might otherwise have snagged one of our top spots have therefore been excluded on the basis of prior scandals.
The Best National Banks in the U.S.A. Are all FDIC Members
American consumers are relatively well-protected when it comes to retail banking and, although rolling back some financial regulations enacted after 2008 is being discussed at the political level, the man in the street is unlikely to be directly affected by this.
While banks are subject to several Federal and State laws, and bodies like the Consumer Financial Protection Bureau are charged with ensuring that advertisements are not misleading, the most important institution you need to know about is the Federal Deposit Insurance Corporation (FDIC).
The FDIC’s most important function is to insure customer deposits of up to $250,000, even if your bank should go totally bust. It also compels each member bank to adhere to certain standards of good management. Furthermore, FDIC membership implies special rules for advertising, including how interest rates are displayed and when words like “no-fee” may be used.
What Is the Best Bank in America?
It’s really difficult to say which bank is better unless you know what you’re looking for. All of those you’ll find here offer some good accounts, but one will probably be a better fit for you than others. Before you read through what follows, you should ask yourself what features will really benefit you. Are free direct deposits something you need, or do you mainly earn money in the form of cash? If you’re not planning on keeping a large balance in the account, high monthly maintenance fees are something to avoid, while interest rates will be important to someone with more money to store.
When it comes to banking options, one size does not fit all. While this guide makes a pretty good starting point, we highly recommend that you do a little research of your own and compare at least two options side by side.
Best Bank for Salaried Employees: Chase
If you have a stable monthly income and predictable expenses, it’s very likely that building up a nest egg or a rainy-day fund is on your mind. In this case, Chase’s Sapphire checking account might suit you.
The monthly service fee of $25 is on the high side, although free withdrawals at any ATM worldwide, no checking fees and no charge on incoming or outgoing wire transfers more than make up for this if you conduct numerous transactions. There’s also no penalty for overdrafts (up to 4 in any 12 month period).
You’ll also receive a safety deposit box at no extra charge, along with a fairly competitive credit card rewards program, preferential access to their 24/7 helpline and other assorted perks. This is all very convenient, but be warned: although Chase is a national bank, they don’t have physical branches in all 50 states. You can check if there is one near you here.
The Total Checking and Premier Plus Checking accounts from the same bank are comparable in many ways, but the Sapphire package also includes commission-free trading in EFTs and stocks. This is done through J.P. Morgan, the investment arm of J.P. Morgan/Chase, and by their nature, such investments are not FDIC-insured. You may either trade on your own behalf or opt for a managed portfolio.
The bottom line: This is not the right bank for someone living paycheck to paycheck or who prefers safer investments like CDs. If, however, you perform a large number of transactions each month and are looking to get into investing, Chase’s fee structure is very attractive.
Best Bank for Students: Simple
The typical college denizen has a lot on their mind and often isn’t the most financially responsible person (don’t get defensive; we’ve all been there). For the most part, they don’t want to spend an hour or so a week on their banking, nor tear their hair out trying to understand the T’s and C’s.
This is where Simple comes in. Simple is an online-only bank, meaning that they have no branches whatsoever, keeping their costs down and allowing them to offer a higher-than-normal interest rate. Unlike even other online banks, Simple gives you only two choices with regard to which type of account you can open. We recommend the Protected Goals Account, which is basically an add-on to the basic package.
The idea here is that your account is partitioned in two: one which works more or less like a normal checking account and another you can’t accidentally access through your debit card. Money is automatically transferred to your “savings account” based on a schedule you determine. Checking and online payments are all fee-free, as are ATM withdrawals at any of these locations.
The best feature, by far, is that the app does your budgeting for you. Basically, you just enter your monthly bills and what goals you are saving for, and your phone will tell you how much spending money you have left.
This bank pays an impressive interest rate on Protected Goal balances. This, by itself, makes it worth looking at, but what makes them even more attractive is their clear, no-nonsense communication style. Even if you’ve never dealt with a bank before, it takes only minutes to understand all the features and limitations of this option.
The major downside of Simple, as with most online-only banks, is that there’s no easy way of depositing cash. If, for example, you work for tips, you’ll have to convert all those coins and small bills into a check or money order before you can get it into your account. This costs extra, takes longer and is generally a hassle; in fact, many people will feel that not having to deal with cash is exactly why you need a bank in the first place.
The bottom line: Simple makes things simple. The easy-to-use budgeting app linked to your bank account is a definite plus, but this bank’s inability to accept cash deposits directly will be a dealbreaker for many college students.
People who are their own boss are often in the unusual position of needing more functionality than most personal checking accounts offer, yet not having the time or financial savvy to manage a complicated banking package intended for multi-employee companies.
Fortunately, banks have cottoned on to this, and you can now find a number of accounts explicitly aimed at solo entrepreneurs. Most likely, you’ll also want to build up a relationship with your bank over time in case you need a loan or line of credit, which – along with the need to deposit cash receipts – generally means dealing with an institution that has employees you can talk to face to face in an actual branch.
Navy Federal has 295 of these and manages almost $80 billion in assets, making them the largest credit union in the United States. (A credit union is a bank run for the benefit of its members rather than shareholders, and its deposits are insured by the National Credit Union Administration rather than FDIC).
While Navy Federal’s main focus continues to be on individuals, particularly those with a military background, they also provide an impressive array of options to small businesses, including one-man bands. These include checking accounts, loans and also more advanced services like payroll processing and help with employee retirement planning. The needs of different solo entrepreneurs vary too widely for us to talk about or recommend any one type of account in particular, but Navy Federal is worth talking to. You will, however, be required to join them as an individual member first.
The bottom line: when looking for a small business bank account, don’t rule out credit unions. As non-profit organizations, they can often offer better deals for similar services.
Best Bank for Retirees: TD Bank
Seniors, whether living off Social Security or drawing on some other kind of pension plan, have a few special requirements when it comes to bank accounts. Reasonable fees are certainly a priority, while you should really be looking for either a high-interest rate or low minimum deposit requirements.
In many cases, accounts marketed as “senior” have few real advantages over the regular kind, but others do include things like help with retirement fund management and low-cost brokerage services. As scams targeting the elderly become more commonplace, some kind of fraud protection is also a good idea.
Although a subsidiary of a company based in Canada and located mostly on the East Coast, TD Bank does qualify as a U.S. national bank. What makes them stand out, assuming you live near one of their 1000+ branches, is their exceptional personal service and the countermeasures they offer against fraud. An account holder can, for example, give read-only access to their account to a trusted third party so their statements can be reviewed online.
The bottom line: Calling themselves “America’s most convenient bank,” TD has a reputation for good in-person customer service and offer senior banking packages with more than cosmetic perks for the older person.
Best Bank for Frequent Travelers: Charles Schwab
People who often find themselves on the move, either domestically or overseas, require some things from a checking account that won’t matter much to others. A rewards program that reimburses you for airline tickets, restaurant meals and accommodation is certainly a plus, as is a reassuringly clear policy on foreign ATM charges, which can easily run to $5 or more.
Chase Sapphire accounts tick both of those boxes, as does the Charles Schwab High Yield Investor Checking package. The latter, as with Chase, also includes a brokerage account, though trades are not free in this case.
What makes Charles Schwab a better option for the jet set is their cards’ compatibility with several types of digital wallets and also their remarkable level of customer service. They happily display both positive and negative customer reviews on their website, with numerous people praising their quick response time (which is definitely what you need if an ATM in Nepal eats your card). You should know, however, that their branch coverage is not as extensive even as Chase’s – you’ll have to do most of your banking online.
The bottom line: There are numerous banking options for the frequent traveler, but Charles Schwab’s no-frills zero-fee policy on ATM withdrawals and proven customer service make them exceptional.
So, Which Bank Is Better for Me?
If there were a universal answer to the question “What is the best bank in America?”, the others would have gone out of business long ago. Which you select depends on where you live, whether you use wire transfers a lot, what interest rate you’re willing to settle for and a dozen other factors.
It’s an important decision, though, so take your time. Ask advice from someone in a similar situation to yours if possible, and dig down below the marketing hype. There’s almost certainly a top rated bank that can accommodate your particular circumstances, so don’t settle for one that doesn’t meet your needs. Hopefully, we here at Pro Money Savings will have helped you make the best decision you can.