Best National Banks of November 2022
How are national banks different?
The biggest difference between a national bank and any of the other types is that it has a national banking charter and is a member of the Federal Reserve.
Here are some elements that define a national bank:
- It is a commercial bank (offers banking products to individuals and businesses)
- It has a national banking charter and is a member bank of the Federal Reserve
- A national bank generally transacts with local Federal Reserve banks
- It is still a member of the Federal Deposit Insurance Corporation (FDIC)
National banks generally have a broad geographical presence. They do not must maintain a set number of branches or have a physical presence across the United States. In fact, many have a very localized presence.
Other types of banks include:
- Federal savings associations
- State banks
- credit unions
Learn more: Best Chequing Accounts
Are national banks safer?
Be certain, most US banks are very secure, regardless of the type of bank charter they hold. All chartered banks offer FDIC insurance (or equivalent such as National Credit Union Administration protection), and all offer some protection against theft. And all banks are required to maintain adequate capital levels at all times to avoid running out of money in difficult times.
That said, there are strong arguments to demonstrate that the biggest banks are the safest. For starters, they have more resources to invest in things like cybersecurity protection than smaller banks. And they tend to offer extra protections if your money is stolen, even if it wasn’t the bank’s fault. For example, big banks usually guarantee your money in case someone hacks into your account, and some even go further by refunding your stolen money the next day while investigations are ongoing.
Should I choose an online or physical national bank?
Here are some things to consider when choosing between an online bank and a physical bank:
- Customer service: Support is generally superior in physical banks. Many offer specialized in-person services at branches, such as mortgage application assistance and investment services.
- Technology: It’s common to assume that online banks have superior technology (like mobile banking portals), but that’s not always the case. In fact, Bank of America has won numerous awards for its technology, as have other physical national banks.
- Interest rate: Online banks tend to offer much better interest rates on deposits than physical banks.
- Convenience: Traditional banks have a convenience factor, especially if you deal with cash often. It can be difficult to deposit money into an online bank account, and although many have networks of ATMs, not all of them are as convenient as the major national banks.
Learn more: Online banking or brick and mortar: which is the best solution?
Tips for finding the best national bank for you
Make sure the bank offers the features that matter most yours. Here are a few things to keep in mind when looking for the right fit.
You are unlikely to find the highest interest rates on domestic bank deposit accounts. If that’s your top priority, check out our favorite high-yield savings accounts. But if a national bank is the best type of bank for you, it’s always a good idea to shop around for the highest interest rate as part of your search.
Read more: What is APY?
If you want investment assistance, for example, choose a national bank that focuses on that. The same can be said with competitive deposit interest rates. If you plan to keep large sums of money in your savings account or CDs, you should make that a priority in your search.
If you choose a national branch-based bank, make sure they have a physical presence not only near you, but in other areas you visit frequently. Even some of the largest national banks do not have branches in some major markets. Branches are also where you can usually withdraw money without ATM fees.
Technology is a key factor these days, especially if you plan to do most of your banking through online and mobile channels. And it’s not just online banks that do this well – some branch banks offer excellent mobile and online platforms. So, if this is a priority, be sure to read some app reviews before deciding.
Read more: Best banking apps
Try to keep fees as low as possible. Online banks generally have minimal fees, while branch banks often have higher fees. However, you can usually avoid fees on checking accounts by meeting certain conditions (such as setting up direct deposit), so be sure to read the fine print when it comes to fees.
Learn more: Checking account fees and how to avoid them
As you’ll see in our pick list, some national banks offer great sign-up bonuses for new accounts. That said, the more the important thing is to make sure a bank is right for you. But all things being equal, it is worth paying attention to the bonus offers.