In this article we will discuss various aspects of banking and which style of banking is best in each category. When discussing each category we are not taking any other factor into consideration. When we talk about banks here I'm referring to banks that are nationwide. Community banks have some of the pros and cons that come from both banks and credit unions.

Physical Location

1st: Banks - The winners in this category are the nationwide banks. These have branches that dot the United States and you often won't have to worry trying to find one when traveling. You'll usually be able to find a branch near where you live.

2nd: Credit Unions - Second place are the credit unions. You'll almost always have several options of credit unions by your house. Unfortunately you'll often struggle to find your credit union when traveling. The great thing about credit unions though is that thousands of credit unions work together in what is called the Credit Union Service Center network. This allows members of other credit unions within the network to conduct business at participating branches.

3rd: Online Banks - Online banks come in third due to not actually having a physical location.


ATM Access

1st: Online Banks - I believe that online banks here are the winner. Online banks such as Ally Bank allows you to use any ATM nationwide and it will reimburse you any fees charged by other banks at the end of your statement period. Or when shopping you can get cash back with no withdrawal fee.

Tied for 2nd: Credit Unions and Banks - A lot of people with falsely assume that being with a credit unions means that it will be hard to find an ATM that won't charge them fees. Fortunately many of the credit union ATM cards are part of a Co-Op network which eliminates ATM fees for credit union members. These are located at places such as 7-Eleven, Costco and Walgreens all over the country.

With banks it usually isn't too hard to find an ATM in your network that won't charge you fees

Customer Service

1st: Credit Unions - For the majority of people, Credit Unions are the preferred financial institution in terms of customer service.  You'll often find very helpful, friendly people who put you before them.

Tied for 2nd: Banks and Online Banks - There is a tie here and I will explain why:

People often complain about doing business with banks because they often find that the tellers are constantly trying to push the clients to take out loans, sign up for credit cards and various other products and services. The employees are often pushed harder to sell more products and services, and the level of customer service drops.

Online banks on the other hand are often a lot more helpful, but you'll always be talking to them over the phone. Most people prefer the relationship that can be established when banking at a credit union. On the other hand, if you like minimum interaction with people and want things to be as simple as possible, online banks are a great option.


Interest Rates

1st: Online Banks - If you want a higher interest rate on your bank accounts you should probably start looking online. Online banks such as Sallie Mae, Ally and ING offer better interest rates than banks or credit unions.

Tied for 2nd: Banks and Credit Unions - Credit unions are generally known to offer better interest rates than banks, and that's usually true. These days, however, interest rates on deposit accounts are so low that it doesn't really matter if you are with a bank or credit union.


Online Banking

1st: Online Banks - Is this any surprise? With no branches to worry about, online banks are able to focus on their online interface and make sure that it is as user friendly as possible. 

2nd: Banks - Banks have quite a bit of money. It makes sense that they can afford to make a great online interface. Unfortunately that often isn't the case. Online banking here is good, but not what it should be.

3rd: Credit Unions - Online banking with credit unions often isn't as pleasing to the eyes as with the other two types of financial institutions, but we can expect in the future to see a lot of improvement. The question then is, do you want to wait that long?


Mobile Applications

1st: Banks - As mentioned with online banking, banks have a lot of resources that allow them to create quality stuff like mobile applications. Again, I feel like a lot of the main banks out there could do a lot better but overall, banks do a decent job.

Tied for 2nd: Credit Unions and Online Banks - In general, most credit unions don't have the best mobile apps, if they have any at all and it always surprises me that online banks don't do a better job with mobile apps. 



1st: Credit Unions - Credit unions do a great job keeping fees to a bare minimum. It should be that way since their motto is "people helping people."  Your safest bet is to ask the next time you go in about their fees in relation to maintaining your accounts.

2nd: Online banks - The people behind online banks promise low fees, and from what most people have found it is true.  Online banks come it at number two because here you lack the privilege to go in, sit down and chat in person about your concerns. It just isn't the same over the phone.

3rd: Banks - Crossing the finish line in this category hours after the credit unions and online banks are your nationwide banks. Fees keep rising, and often times "free checking" is no where to be found! Keep an eye on your bank statements and watch out for any fees you might be incurring. While we're talking about bank statements, make sure you're getting them electronically. You'll probably get a fee if you want it to come in the mail!


I hope that this helps as a general guide for those who are unsure if who they are with now is what is best for them.  Now it's time for you to think about what is most important for you! Keep in mind that while these three kinds of financial institutions are different in many ways, each branch you go into of any bank or financial institution will be different. Maybe you don't even want to deal with anyone and just want everything to be dealt with online.

Just make sure you do your part so that you have the peace of mind knowing what to expect from your financial institution of choice.