Choosing where to bank isn’t just about finding the best interest rate or a nearby ATM—it’s about picking the right structure for your needs. National banks operate under a federal charter, which means they follow nationwide regulations and often offer wide-reaching access, advanced digital tools, and a full lineup of financial products.
But convenience isn’t the whole story. National banks can also come with trade-offs, including higher fees or less personal service. Before opening an account, it helps to understand what makes a national bank different—and whether those differences actually work in your favor.
Key Takeaways
- A national bank in the U.S. is a commercial bank chartered and supervised by the federal government, specifically by the U.S. Treasury’s Office of the Comptroller of the Currency (OCC), and can operate in multiple states while adhering to federal regulations.
- National banks offer an extensive range of financial products including checking and savings accounts, credit cards, loans, and investment services, often providing a comprehensive suite of services that surpass smaller community banks.
- Benefits of national banks include an extensive branch and ATM network and a wide range of services, while drawbacks may include less personalized customer service and higher fees compared to regional banks or credit unions.
What is a national bank?
In the United States, a national bank is a commercial bank chartered and supervised by the federal government, specifically the U.S. Treasury’s Office of the Comptroller of the Currency (OCC). These banks are not government-operated, but they are required to adhere to federal regulations to maintain their charter.
Most national banks are traditional brick-and-mortar establishments, but some also operate online. Generally, national banks can operate in multiple states, although some may choose to limit their operations to specific regions.
If you step outside U.S. borders, the term “national bank” usually refers to a central bank owned and operated by a country’s government, similar to the Federal Reserve in the United States.
History of National Banks in the United States
National banks have a storied history that begins in the 18th century. The First Bank of the United States, chartered in 1791, was a precursor to the modern national bank, although it wasn’t a national bank in the way we understand the term today.
In 1863, the National Banking Act was enacted, establishing a system of national banks and laying the foundation for the Federal Reserve system. This system was later expanded and refined through additional legislation, creating the financial infrastructure we see today.
Over the years, national banks have evolved in response to the changing needs of the economy. They have become essential commercial banks for consumers and businesses, alike. They provide a wide array of financial services, including loans, credit cards, and investment products.
Services Offered by National Banks
National banks offer an extensive range of banking products that typically surpass the offerings of smaller, community-based banks. Their service suite often includes:
- Checking accounts
- Savings accounts
- Money market accounts
- Certificates of deposit (CDs)
- Credit cards
- Mortgages
- Auto loans
- Personal loans
- Financial management and investment services
- Business banking
Unlike state-chartered banks, national banks are authorized to facilitate the auction of U.S. Treasury bonds. They are also obligated to pay premiums to the Federal Deposit Insurance Corporation (FDIC), which not only makes the bank a member of the Federal Reserve system but also secures FDIC insurance for the bank’s customers up to $250,000 per account.
How to Identify a National Bank
You’ll often find the word “National” or the acronym “N.A.” (National Association) in the name of a national bank. For a comprehensive list, you can consult the U.S. Treasury’s OCC website. If the bank you’re considering isn’t listed there, chances are it’s a state-chartered bank.
Most Popular National Banks in the U.S.
In the United States, several national banks dominate the landscape, each offering unique advantages. Let’s quickly go over some of the most prominent ones.
- JPMorgan Chase Bank: Chase Bank is a cornerstone in the U.S. banking sector, offering an extensive range of services and a widespread branch and ATM network.
- Bank of America: As another heavyweight, Bank of America is present throughout the nation, offering a comprehensive array of financial services.
- Wells Fargo: With branches in nearly every state, Wells Fargo provides a wide selection of banking services, from personal to commercial.
- Citibank: With a strong presence in major cities across the U.S., Citibank offers everything from savings accounts to complex financial planning.
- U.S. Bank: Primarily located in the Western and Midwestern U.S., this bank provides standard banking services and has a growing online presence.
- Capital One: Originally known for its credit card services, Capital One has broadened its offerings to include a full spectrum of banking services.
- Truist: With a large footprint in the Southeast and Mid-Atlantic, Truist offers personal, business, and wealth management services across a wide range of financial products.
- Goldman Sachs Bank USA: Goldman Sachs extends its expertise in the investment sector to offer consumer banking products, like high-yield savings accounts and personal loans.
- American Express National Bank: Predominantly an online entity, American Express National Bank offers competitive interest rates on savings accounts and CDs.
- Ally Bank: An online-only bank with no physical branches, Ally has nonetheless gained national attention for its range of products, including competitive savings accounts and loans.
National Banks vs. Regional Banks
Regional banks are usually smaller than national banks, often holding between $10 billion and $100 billion in assets. The primary difference is the regulatory oversight: regional banks operate under state charters, while national banks operate under federal charters.
Despite this difference, both types of banks generally offer similar services. However, regional banks typically serve a smaller geographic area, which could be limiting for frequent travelers.
Pros & Cons of National Banks
When it comes to banking, one size does not fit all. National banks come with their own set of benefits and drawbacks. Let’s dive deeper into the advantages and disadvantages to help you decide if a national bank is the right financial institution for you.
Pros
Extensive Network
One of the biggest draws of a national bank is its wide-reaching network of branches and ATMs. This can be particularly beneficial if you:
- Travel frequently: Whether it’s for work or leisure, frequent travelers will find it easier to access their money without hefty ATM fees.
- Relocate often: If you find yourself moving for work or personal reasons, having a national bank makes the transition smoother. You won’t have to close and reopen accounts each time you move.
Diverse Services
National banks are often “one-stop shops” for all your financial needs, offering:
- Multiple account types: From basic checking to premium savings accounts, you have a plethora of options.
- Loan varieties: Whether you’re buying a car, a house, or funding your education, national banks often have a wide range of loan products.
- Investment services: Some national banks even offer brokerage accounts, retirement planning, and other investment services.
Cons
Impersonal Experience
Because of their size, national banks might offer a less personalized customer service experience. This could mean:
- Longer wait times: Whether you’re on hold with customer service or waiting at a branch, bigger banks can sometimes mean longer waits.
- Less flexibility: With rigid policies and procedures, there might be less room for negotiation on loan rates or overdraft fees compared to a community bank.
Fees and Rates
Traditional national banks are often criticized for their fee structures and less competitive interest rates on deposit accounts:
- Monthly maintenance fees: Many national banks charge fees just for keeping an account open, although these can often be waived by meeting certain conditions.
- Lower interest rates: Savings and deposit interest rates are often less competitive compared to credit unions or online banks.
Consider Online Options
In the age of digital banking, online national banks are quickly becoming a popular choice, thanks to:
- Lower operating costs: With no physical branches, online banks pass on the savings to you through fewer fees and higher interest rates.
- Convenience: 24/7 access to your account makes banking a breeze, while mobile check deposit capabilities through an app mean you never have to visit a branch.
Making Your Choice
Your decision shouldn’t hinge solely on whether a bank is nationally or regionally chartered. Instead, consider the practical aspects: the types of accounts offered, fees, and convenience features like online banking capabilities. These factors will guide you in choosing the best financial institution for your needs.
Final Thoughts
National banks offer wide-reaching access, full-service banking, and the backing of federal regulation. They’re a solid choice if you need consistent service across state lines or want everything—from checking to investments—in one place.
That said, they’re not ideal for everyone. If lower fees, local support, or more flexible terms matter most, a credit union or regional bank might be the better option. The right fit comes down to your lifestyle, priorities, and how you manage your money.
