Ratings Methodology for Banks and Credit Unions
NerdWallet’s overall ratings for banks and credit unions are weighted averages of ratings in the following categories:
- Checking accounts.
- Savings accounts.
- Certificates of deposit (and share certificates, the credit union equivalent).
- Bank experience and access.
- Overdraft fees and policies.
Our survey of more than 90 financial institutions includes the largest U.S. banks by assets, internet search traffic and other factors, as well as the nation’s largest credit unions based on deposits and broad-based membership, plus notable or emerging players in the industry.
Data collection and review process
We considered more than 45 data points for each bank, credit union and financial technology firm (or neobank). Depending on the category, these included account fees and rates (such as annual percentage yields), ATM and branch access, account features, account bonuses, customer service access and user-facing technology such as innovative tools and mobile apps. We gathered this information for each financial institution from its website, a media representative or both.
The stars represent ratings from poor (one star) to excellent (five stars). Ratings are rounded to the nearest half-star.
» Want to learn about where to open an account? Go to NerdWallet's list of bank and credit union reviews.
Banking reviews are reassessed annually, and writers and editors also make updates throughout the year as necessary. We maintain contact with providers to keep information current.
The review team is made up of seasoned writers, researchers and editors who cover personal banking deposit accounts, such as checking, savings and certificates of deposit, as well as related banking services, such as overdraft programs and ATM networks. Each writer and editor follows NerdWallet’s strict guidelines for editorial integrity.
The review team
In addition to NerdWallet, the work of our team members has appeared in The New York Times, The Associated Press, USA Today, Nasdaq, MSN, MarketWatch, Yahoo! Finance and other national and regional media outlets. The Banking team’s writers and editors combined have more than 40 years of experience in finance.
We paid close attention to the following:
For checking accounts
- Monthly fees (45% of the rating).
- Free access to U.S. ATMs (28.2%).
- Benefits such as interest or cash back (13.2%).
- Minimum opening deposit (3.6%).
- Overdraft category rating (10% of Checking rating; see more in overdraft section).
- Sign-up bonus (up to 15% extra when applicable).
The best checking accounts generally have no monthly fees, free access to a network of more than 10,000 ATMs, no or low minimum opening deposits, low-cost overdraft programs and some additional benefit, such as the ability to earn interest or cash back. Checking accounts with a sign-up bonus get extra marks.
» For some of the strongest options, check out NerdWallet's best checking accounts
For savings accounts
- Interest rate (30%).
- Monthly fees (25%).
- Distinguishing features for saving or budgeting (20%).
- Minimum opening deposit (25%).
- Any sign-up bonus (up to 15% extra when applicable).
The best savings accounts generally have interest rates at least 10 times the national average rate, no monthly fees, a low minimum opening deposit, such as $100, and some savings or budgeting features that can genuinely help customers track goals or allocate funds for specific purposes. For accounts with multiple tiers of interest rates, we evaluate the rate that is accessible to the majority of readers. Savings accounts with a sign-up bonus get extra marks.
» For some of the highest rates, check out NerdWallet's best high-yield online savings accounts
We considered factors for some of the most popular terms including:
For certificates of deposit
- 1-year CD rate (30%).
- 3-year CD rate (40%).
- 5-year CD rate (20%).
- Minimum opening deposit (10%).
- Select specialty CD(s) offered (up to 20% extra when applicable).
Banks with the best CDs — and credit unions with the equivalent, the best share certificates — generally have interest rates for one-year, three-year and five-year terms that are at least two to three times twice their national averages. Minimum opening deposits tend to be lower than $3,000, but not always. Institutions with at least one of four specialty CDs (no-penalty, add-on, step-up or bump-up CDs) get extra marks.
» For some of the most competitive products, check out NerdWallet's best CD rates
We evaluated the following:
For banking experience
- Ease of finding key details online, such as rates, fees and customer support phone number (30%).
- Availability of customer service through multiple channels: phone, chat, Twitter (45%).
- Access to a branch network (10%).
- iOS and Android app store ratings (15%).
Banks and credit unions with high marks for banking experience have multiple channels for live customer service beyond 9 a.m. to 5 p.m. on weekdays; make it easy for website visitors to find important information on fees, rates, branch and ATM networks, and more; and receive better than 4 stars for iOS and Android app store ratings.
For overdraft fees and services
- A lack of (or amount of) a standard overdraft or nonsufficient funds fee (30%).
- Daily limit on overdraft or NSF fees (20%).
- Availability and cost of an overdraft line of credit and/or an overdraft protection program with transfers from linked savings accounts (40%).
- A lack of (or amount of) an extended overdraft fee or continuous negative balance fee (10%).
- No-fee overdraft coverage up to a fixed amount (up to 20% extra when applicable).
The most overdraft-friendly checking accounts tend to have no overdraft coverage fees, multiple ways to cover a negative balance (such as overdraft transfer from a linked savings account or line of credit), and low costs for those alternative overdraft programs. Banks can charge more than $30 per overdraft and have a daily fee limit of four or more (see a list of overdraft fees by institution). Institutions with a no-fee overdraft coverage program up to a set dollar amount get extra marks.
In some cases, a financial institution’s review may show a penalty. This penalty reflects that an institution has engaged in behavior or practices that run counter to adequately serving its consumers, and this factors into the star-rating calculation.
Note on star-rating penalties
Three types of star-rating penalties may be imposed on financial institutions:
1. Penalty for a settlement with the Consumer Financial Protection Bureau: The institution has had a CFPB settlement within the past three years that was a result of an improper or illegal banking practice that negatively impacted deposit-account customers. The penalty is 0.5 star off the Banking Experience rating category or 0.5 star off the overall rating for an institution, depending on the severity of the settlement.
2. Penalty for out-of-proportion CFPB complaints in the past year: The institution has a far-above-average number of public CFPB complaints in the past year relative to its size. To calculate this, NerdWallet’s editorial team created a ratio of the number of CFPB complaints to domestic assets (referred to as asset size) of an institution or partner bank for each institution we review and/or analyze, where data was available. This ratio provides a way to compare complaints across institutions of different sizes. If an entity has a ratio 90% higher than the average ratio across institutions analyzed, it receives a penalty. The penalty is 0.5 star off the overall rating for an institution.
Disclaimer: The CFPB complaint database is a public third-party source used by the government, consumer advocacy groups and news media to shed light and/or act on consumer issues at financial institutions. The database does not represent all customer issues or a statistical sample of issues at an institution. The database may contain complaints outside an institution’s control or duplicates, meaning multiple complaints filed by the same person for the same issue. The CFPB publishes each complaint after the company addressed in the complaint replies, or after 15 days, whichever comes first.
3. Penalty for outsized complaints tied to a specific event in the past year: The institution has had a surge in public complaints in the past year as a result of an event within the institution’s control, such as a merger or acquisition. The penalty is 0.5 star from the overall rating for an institution. Do you want to provide feedback? Contact us at [email protected].