Benefits of a Community Bank Versus a Big Bank

When choosing the right bank to do business with, you'll want to look for products, services, features, and rates that best fit your unique banking needs. It's not an easy decision. Many choices exist, from large nationally-known conglomerate banks to local financial institutions. When it comes to deciding between a large national bank or a local bank to handle your essential financial needs, such as managing your checking and savings accounts or loan services, you may ask if the size of the financial institution matters. In some ways, it does matter, but you may be surprised to find out that a smaller community bank is usually a better choice than a more popular national bank. This article will weigh the benefits of banking with a small community bank versus a larger financial institution.

What To Look For In A bank

Convenience. Convenience plays a significant role in our daily lives. That's why it should be considered when choosing the right financial institution for you. For example, suppose in-person banking is essential to you. In that case, you will want to choose a bank that has a significant presence in your region and offers convenient branch locations near your home or place of employment. Cost. When it comes to banking costs, fees are typically lower at smaller banks when compared to big financial institutions. However, this is not always true. Be sure to identify your unique banking needs before shopping around for the best financial institution, and then compare the fees associated with the services you require. Services Don't assume that large financial institutions are the only ones that offer a full menu of services and products. You may be surprised by the wide range of options your community bank offers. Community. Are you looking for a financial institution that genuinely supports the local economy and community? If that's the case, you'll likely want to do business with a smaller financial institution as they are more likely to be community-minded. Of course, when it comes to banking, there are pros or cons to every decision you make, and the same holds when weighing the differences between a large bank and a small community bank.

Working with a Large Bank

Larger banks are sometimes more convenient The larger financial institutions with familiar brand names tend to dominate the large cities across America, and they often reach smaller markets. They offer online capabilities with the convenience of managing your savings and checking accounts, loans, and credit cards all in one place. Thankfully, most community banks now offer the same online and mobile banking convenience, keeping them in step with the larger institutions. If in-person banking is vital to you, you might find more branches from a national bank chain in your area. However, national banks have increasingly moved toward self-service options, even at their branch locations, undermining the one-on-one banking relationship that actual in-person banking offers. Dealing with larger banks can be frustrating The larger financial institutions are more likely to have less flexible processes, making the customer experience difficult. When you need customer assistance, you will most likely have to contact someone through a toll-free phone number and may end up waiting on hold for a significant amount of time. Even opening a new account can be a challenge. On the other hand, you can expect to deal with a trusted individual face-to-face with most local banks. When it comes to banking fees, large banks may be more expensive Big banks love to advertise freebies like "free checking," but no matter what they tell you, you can rarely find truly free banking at large financial institutions. Sure, they offer fee waivers if you keep a certain balance or set up a direct deposit, but it's rare to find a fee-free account among the larger banks. You might be surprised to find that the modest fees charged by local banks are in line with all of the national banks.

Working with Community Banks

Local banks offer competitive rates and fees If you are looking for a free checking account, a small community bank may be your best bet. Some small banks offer free checking for everyone, while others will waive fees for going paperless. These offerings are in line with what the larger banks tend to offer. Small banks compete with their larger counterparts by offering attractive loans and savings account rates. Community banks have local knowledge Since smaller banks are more likely to be engaged with the community, they can be easier to do business with. For example, suppose you need a loan for your business or investment property. In that case, a community bank may be more willing to help because they are well-versed in managing loans in your region. Community banks offer personal service Local banks provide better personal customer service than the bigger banks. That is simply a fact. Over time, you will likely work with the same staff member at your local bank, which can benefit you overall. With these types of personal relationships, bank staff is more likely to understand your needs and offer products that would be most beneficial. Small banks are more involved in your community Choosing your bank based on your individual banking needs would be best. However, there is a certain satisfaction that comes from working with local financial institutions. Local community banks are part of your regional economy, and these institutions usually have a track record of giving back to the community. It is not uncommon to see a community bank’s logo at various charity events in your community. That signals that they have contributed to help make the event a reality.

The Truth About Community Banks

It may seem that doing business with a nationally-recognized financial institution is your best choice. But, it is important to remember that community banks can be an excellent option for all of your banking needs. Just because a bank is small, it doesn't mean that it cannot meet your needs. Community banks are in a great position to offer you personalized and convenient service, affordable fees, and market expertise.