If you’ve recently moved to the US and you’re juggling a dozen new responsibilities like housing, work, and transport, managing your finances in a new banking system can be daunting. One of the first steps to settling in is opening a bank account. It might seem simple, but the choices can be overwhelming. You might be wondering about the difference between checking and savings accounts, what kind of account is best for everyday transactions and if you’ll incur fees for accessing your money.
At Remitly, we understand how important it is for newcomers to find safe, practical ways to manage their money. Whether you’re receiving your first paycheck or preparing to send money to loved ones, choosing the right bank account can make life much easier. In this guide, we’ll walk through what features matter most for everyday use and help you settle into your new life more confidently.
How to choose the right bank account for your everyday needs
When you’re new to the US, opening a bank account might seem straightforward—it’s just a place to put your paycheck, keep your money for groceries and other bills, and send money back home, right? But not all accounts are the same. The features and fees can vary significantly, so understanding the basics can help you choose what’s best for you.
Getting your salary and using a debit card
If you’ve landed a job in the US, your employer might offer direct deposit, which means your paycheck goes straight into your account automatically on payday. This is a simple, secure way to get paid, and it takes away the hassle of handling physical checks.
For direct deposit, you’ll need a bank account that provides routing and account numbers; most checking accounts include this.
Equally important is your ability to use your money conveniently. A debit card lets you pay directly from your account at stores, withdraw cash from ATMs, and make online purchases without carrying cash. Keep in mind, not all accounts come with a debit card, so if you plan to use your account for daily spending, check that this feature is available.
Checking vs. savings—what’s the real difference?
Checking accounts are made for everyday use. They’re perfect for regular transactions like paying for your weekly shop or subscribing to your favorite streaming services. These accounts allow frequent deposits, withdrawals, and transfers without restrictions.
On the other hand, savings accounts are designed to help you set money aside and grow it over time. These accounts typically earn interest, making them ideal for emergency savings or future goals. Savings accounts often limit how many withdrawals or transfers you can make each month, so they’re not really practical for daily spending.
What about interest and fees?
A nice bonus of savings accounts is that they usually earn interest. Banks pay you a small percentage based on your balance, called the Annual Percentage Yield (APY). Online-only banks often offer higher interest rates than traditional banks, but keep in mind that unless you’re saving a substantial amount, this interest probably won’t be a significant income source.
Checking accounts usually don’t earn interest, and they often come with fees like monthly maintenance charges, ATM fees, or overdraft fees. To keep these costs down, look for banks offering fee waivers. Many will eliminate fees if you set up direct deposits or maintain a certain minimum balance.
Why a checking account is probably the go-to everyday account
If you need an account for everyday spending, a checking account is probably your best bet. They’re designed for frequent use and give you fast, easy access to your money.
Everyday benefits at a glance
- Instant access to your money
Get paid through direct deposit and use your funds right away with a debit card, online payments, or ATM withdrawals. - Recurring payments made easy
Set up automatic payments for bills, rent, or subscriptions to stuff like streaming platforms, so you don’t have to worry about missing deadlines. - Mobile banking tools
Track your balance, transfer money, and pay bills on the go. These tools are especially helpful if you’re still getting used to how US banking works.
Watch out for fees
Checking accounts are super-convenient, but they’re not always free. Some come with monthly fees (usually between $5 and $25), but as we said earlier, it’s usually pretty easy to get those fees waived.
ATM fees are another thing to consider. If you use an ATM outside your bank’s network, you might get charged twice: once by your bank and again by the ATM provider. Choosing a bank with a wide ATM network or one that reimburses those fees can save you money.
Avoid surprises with overdraft protection
Overdrafts happen when you spend more money than you have available in your account. Some banks will still process the payment, but they’ll charge you a fee. This can happen if you forget about an automatic bill or a payment takes a few days to go through. Not everybody earns the same amount each month, either, so freelancers, for example, might get caught out even by regular outgoings.
To protect yourself, look for a bank that offers overdraft options like:
- Linking your checking account to a savings account to cover the shortfall.
- Declining transactions that would overdraw your balance.
- Sending low-balance alerts through the app.
- Providing a small no-fee buffer if you go a bit over.
Thinking about a savings account? Here’s what you should know
A savings account might not be something you use every day, but having one could play an important role in building financial security once you’re settled in. Whatever you’re saving for, it’s a safe place to keep money you don’t plan to spend right away.
Growing your savings with high-yield accounts
If you want your money to earn a bit more while it sits unused, high-yield savings accounts are a smart choice. These are usually offered by online banks and come with benefits like:
- Higher interest rates
These are often much better than traditional banks’ rates. - No monthly fees
Many high-yield accounts don’t charge you just to keep the account open. - Good for longer-term savings
Ideal for money you won’t need to touch often.
A heads-up: access will probably be limited
Savings accounts are designed for storing money, not for everyday purchases. Many banks limit you to a few withdrawals or transfers per month, and going over those limits will probably cost you in fees. They also usually don’t come with debit cards or checks, so it’s harder to access funds instantly.
Pay attention to the APY (interest rate)
When comparing savings accounts, look at the APY, that’s the interest you earn on your balance. Even a small difference can add up over time.
Still, interest isn’t everything. Before opening an account, check for:
- Hidden or unexpected fees.
- Easy transfers between accounts.
- A user-friendly app or website for managing your money.
- Feedback from existing account holders on the bank’s customer service standards.
What to look for if you need unlimited access to your money
If you’re the kind of person who wants to check your balance, send money, or pay bills at any time, without limits, consider a flexible, low-fee account—there are plenty to choose from.
Traditional banks vs. online banks: which one’s right for you?
Traditional banks offer an in-person service, which can feel reassuring—especially if you’re new to the United States. They also make it easier to deposit cash. But convenience comes with a cost; traditional banks often charge higher fees and pay lower interest on your savings.
Online-only banks, on the other hand, with their focus on mobile and digital tools and their lower operating costs, usually offer:
- No monthly maintenance fees
- Higher interest rates (especially for savings accounts)
- Easy-to-use apps and websites
- ATM fee reimbursements in many cases
If you’re comfortable doing everything online and don’t need to visit a branch, online banks can save you time and money.
Easy ways to pay
Most banks in the US now work with services like Venmo, Cash App, and PayPal, that let you sort out payments between friends or family with just an email address or phone number. Many checking accounts connect easily to these platforms, but it’s worth checking if your bank supports the one you plan to use most. This can be really handy for stuff like housemates paying rent or splitting a restaurant bill fairly.
What makes an account truly convenient?
If you plan to use your account often, look for one that keeps things simple and affordable. Remember, a good everyday account should offer:
- Free or wide ATM access,
- No or low monthly fees,
- Unlimited transactions,
- A debit card for easy spending,
- Alerts and mobile tools to help manage your balance.
Finding a setup that works for how you live, spend, and save will give you one less thing to worry about as you settle into the US.
What else should you consider when choosing a bank account?
Once you’ve figured out whether you need a checking or savings account, there are a few other things to consider. These details can make a big difference in how comfortable and secure you feel managing your money.
Make sure your money is protected
FDIC insurance is a safety net for your money. It protects your deposits, up to $250,000 USD per person, if your bank ever goes out of business. Most US banks and credit unions include this automatically, but it’s still smart to check it’s there before you open an account.
Should you go with a bank or a credit union?
There’s no one-size-fits-all answer to this one, but here’s a quick breakdown of the difference between credit unions and banks:
- Credit unions are member-owned and often offer lower fees, better customer service, and more flexibility. This can be helpful if you’re still building your financial history or need extra help understanding how things work.
- Banks, especially larger ones, usually have more branches, ATMs, and digital tools, but as can sometimes be the case with the big players, this can mean higher fees and less personalized service.
Look out for useful perks and extras
Some banks offer helpful bonuses or features that can make managing your money easier, like:
- Cash-back on purchases,
- Sign-up bonuses for opening an account,
- Automatic fee waivers for direct deposit or student status.
There are also special accounts tailored to different needs, like student accounts, senior accounts, or programs for people with limited income or documentation. Don’t be shy about asking what’s available, you might qualify for more than you think.
Choosing the right account for everyday life
When you’re starting out in a new country, picking the right bank account can make everyday life feel a little easier. But once you’re up and running, your needs might change quite a bit. Right at the start of your life in the US, it’d be no surprise if you didn’t have much cash for savings, for example.
Later, though, you might start saving for something big, apply for a credit card, send more money back home, or even start a business. So consider reviewing your account every so often so you’re best-placed to make changes when you need to.
FAQs
What type of bank account is best for everyday transactions?
A checking account is typically the best choice for everyday use. It offers unlimited transactions, a debit card, and supports direct deposit so you can access your money quickly and easily.
What’s the difference between a checking account and a savings account?
A checking account is designed for everyday spending. It comes with a debit card, supports direct deposit, and lets you pay bills or shop easily. A savings account is for setting money aside and earning interest over time, usually with limited monthly withdrawals.
Do I need both a checking and a savings account?
It’s usually a good idea to have both, if your circumstances allow it. A checking account helps you manage daily transactions, while a savings account is a safe place to grow your emergency fund or save for future goals.
What should I look for when choosing a bank?
Look for low or no fees, easy ATM access, mobile banking features, and good customer service. Also, check if the bank supports tools like Venmo and offers FDIC insurance for peace of mind.
Are online-only banks safe and reliable?
Yes. Most online banks are FDIC-insured and offer strong digital security. They often have lower fees and higher interest rates, but they don’t offer in-person service, which some newcomers may prefer at first.
Can I open a bank account if I’m new to the US?
Yes, many banks and credit unions welcome newcomers. You’ll typically need identification (like a passport), a US address, and possibly a Social Security Number or ITIN, though some credit unions are more flexible with documentation.