Smart Grid metering and control applications require fast and secured two-way communication. IEEE 802.15.4 based ZigBee is one of the leading communication protocols for Advanced Metering Infrastructure (AMI). In North America, ZigBee supports two distinguished frequency bands - 915MHz and 2.4GHz. In Home Area Network (HAN) of AMI, home appliances communicate with smart meters whereas the communication among neighboring meters is termed as Neighborhood Area Network (NAN). In this study, optimum frequency bands for NAN and HAN communication have been proposed based on the throughput, reliability and scalability. We evaluated and compared the performance of bands 868/915MHz and 2.4GHz for AMI context. The solution also meets the requirements for Smart Grid communication standards as recommended by the US Department of Energy (DOE).