U.S. News Best Banking Methodology | Banking Advice

Deciding where to store your money can be an intensely personal experience – after all, you’re going to be using this money to do things like buy a house, save for a tropical vacation or protect yourself from future financial hardship. You want your bank and your money to be working for you.

There are many different types of banks and even more types of deposit accounts. U.S. News rates three types of banking accounts: checking, savings and certificates of deposit, and these ratings will help you home in on the specific account that serves your needs best.

There are two steps in the rating process: selecting and scoring.

U.S. News selects a wide variety of financial institutions to survey, rate and review. This includes the largest 40 consumer banks in the country based on asset size, plus additional banks and credit unions based on internet search volume and their relevance in the broader financial industry. Some of the banks may have relationships with U.S. News.

U.S. News scores accounts based on several factors and then identifies which ones received the highest overall scores. In each account type, factors are weighted based on certain criteria the U.S. News editorial team considers most relevant to the consumer.

To determine the best account in each category, the U.S. News editorial team reviews the top-scoring accounts while evaluating factors and account features that may exist outside of the traditional methodology.

These are the scoring factors, listed alphabetically, for each category:

Best Checking Account: Annual percentage yield, ATM availability, ATM fee reimbursement, customer complaints, minimum initial deposit requirement, monthly fee and overdraft charges.

Best Savings Account: Annual percentage yield, customer complaints, minimum balance required to earn interest, minimum initial deposit requirement, monthly fee and transaction limitations.

Best CD Account: Annual percentage yield, customer complaints and minimum initial deposit requirement.

Annual percentage yield tells you how much you will earn on the money kept in an account for one year. It incorporates compound interest into the calculation.

Why it matters: The higher the APY, the more money you will earn.

How it’s scored: The higher the APY, the higher the score.

ATMs are essential for depositing checks and cash and withdrawing money. ATM availability measures how many ATMs the bank has and how many more ATMs are available to you as part of a bank’s broader ATM network.

Why it matters: A big part of banking is convenience, and you don’t want to be constantly scrambling to find an ATM that won’t charge you a fee.

How it’s scored: The larger the bank’s overall ATM network, the higher the score.

If you aren’t able to use one of your bank’s ATMs, or your bank is online-only and doesn’t have its own, then you’ll need to go out of network. There are two fees you might be charged: one by your own bank to use an out-of-network ATM and one by the other bank to use its ATM.

Why it matters: ATM fees can add up, and you shouldn’t be paying money to access your own cash. High reimbursement maximums mean you don’t have to think about which ATM to use.

How it’s scored: Reimbursement is measured in two ways: the dollar amount that is reimbursed and the number of charges per month permitted.

The Consumer Financial Protection Bureau is a federal agency designed to make sure you are treated fairly by financial institutions. The CFPB tracks the number of complaints it receives per bank and per account category. It also tracks how the bank responds to complaints.

Why it matters: More complaints, and especially more complaints to a third-party agency, mean a bank is not serving its customers well.

How it’s scored: Only complaints about the relevant account are counted in the score. The score is based on the number of complaints relative to the bank’s asset size.

Some banks require you to deposit a certain amount of money in an account to open it.

Why it matters: Opening a bank account is taking a proactive step, and you shouldn’t be limited by your current finances. Lower minimums mean you have more flexibility and more choices.

How it’s scored: The lower the minimum initial deposit requirement, the higher the score.

Some banks charge fees for you to use their accounts, other banks have ways for you to avoid the fees, like maintaining a minimum balance or depositing at least a certain amount each month, and some banks don’t charge any fees at all.

Why it matters: You don’t want your money eaten up by excessive fees. The best account is one where you don’t have to think about how to avoid the fee each month – or the fee doesn’t exist in the first place.

How it’s scored: The highest-scoring bank product will charge no fees. If it does charge fees, is there an easy way to avoid them? A bank product with a lower minimum balance required or a lower monthly deposit will score higher.

Sometimes banks require that you keep a certain amount of money in an account before you can start earning interest on the balance.

Why it matters: Requiring a high minimum balance to earn interest disadvantages people with less money. You should be earning interest on every dollar you have deposited.

How it’s scored: Banks with no minimum balance to earn interest score highest.

An overdraft fee is when a bank charges you because your account balance has run down to zero and you are still attempting to make payments via the account. The bank will cover the overdraft but will charge you for the service.

Why it matters: If you already don’t have much money in your account, your bank shouldn’t be putting you at a higher risk by charging you additional fees.

How it’s scored: The highest-scoring bank won’t charge overdraft fees. If it does charge fees, is there a cap on the number of fees charged per day, or how many times you are allowed to waive the fee?

Some account types limit the number of times you can withdraw money from the account each month.

Why it matters: A higher transaction limit, or no limit at all, gives you easier access to your money.

How it’s scored: A bank account with no transaction limit scores highest.