How to Choose a Bank

Here’s another post based on reader request. I’ll be upfront and say that I don’t know nearly as much about banks as I do about credit cards, but I figure that it might be useful to start with what I have for myself.

I currently have three bank accounts: one credit union, one online bank, and one major national chain. I use the credit union for most all everyday banking activities, I use the online bank for free ATM withdrawals, and I don’t do anything with the national chain except accrue rewards.

My credit union is Boeing Employees Credit Union (BECU). I highly recommend credit unions because they often have lower to non-existent fees (e.g. there’s no monthly fee or minimum required balance to have no monthly fee), they can give better (if only marginally better) interest rates, and they’re not some impersonal behemoth that’s trying to squeeze fees out of you. You’re a part owner with a credit union, there are no external stockholders to appease, and I generally feel good about supporting a credit union.

I can do almost everything I need to do with my credit union (which is mostly just online banking, online bill payment, and paying other people), but credit unions often don’t have as many physical branches or a huge network of ATMs, which can be problematic when you’re traveling or if you need access to cash frequently. But most credit unions have reciprocal agreements with other credit unions, so you can use the branches or ATMs of other credit unions without fees. This benefit is great for me since I currently live in SF but BECU is based in Washington.

From my other posts, it’s clear that I use credit cards as much as possible, but for the times when I need cash, particularly when traveling, I use my Charles Schwab High Yield Investor Checking Account. I feel a little bit guilty every time I use this card at an ATM since they reimburse all ATM fees, and I know they can’t be making money on the paltry amount of money I keep sitting in that account. As far as I know, this is one of the best bank accounts for frequent travelers given that they reimburse all ATM fees, so I never have to worry about using airport ATMs that charge ridiculous fees.

Finally, I have a checking account with Chase that I don’t use. I opened it because they offered me $200 to do so. But as soon as I’ve met the 6-month requirement of keeping the account open, I’m going to close said account since I don’t think I have any real reason to keep the account open.

Thus, my recommendation would likely be to find a credit union that you like for your normal banking needs and to open a Charles Schwab account if you travel. Please let me know in the comments if you think I’ve overlooked something!