Is The Best Bank Always The Biggest?
Is The Best Bank Always The Biggest?
Is The Best Bank Always The Biggest?Big banks used to entice customers with upgraded technology and fancy options, but that's no longer as relevant as it was before. The majority of banks now offer online banking and bill pay to customers regardless of size.Credit unions and community banks may lack the flash of the big four, but they make up for it in customer service and savings. Plus, keeping money at a local institution means keeping money (and jobs) invested locally. For a lot of people, that can make the best bank the smaller bank.
Customer Satisfaction,A 2010 survey byJD Power and Associatesindicated that 41% of local banking customers were satisified with their bank versus 32% at larger competitors. The survey estimates community banks and credit unions are growing at least 2% faster than the industry average, a factor the survey attributes to higher levels of in-person customer service. The perception of smaller bank entities as being more people driven (in contrast to the perception of megabanks as being profit driven) was also a noted factor. This tends to be accurate, as credit unions operate as non-profits with members each acquiring a small stake of ownership.
Small vs. Large.Despite the attractive pros of smaller banks, they aren't for everyone. In economically disadvantaged areas, it's possible (though usually not likely) that a larger bank could offer more security and stability. One way to get around this is to check on the FDIC insurance carried by your bank.While a community bank or a credit union can offer personalized service, a larger bank can offer service 24/7. Depending on your personal needs, that can be a deciding factor. If you travel frequently for work and need to contact your bank, having customer service from 9-5 may not cut it. While it's true almost all banks have online banking now, smaller banks are much less likely to have the phones staffed around the clock. In that case, one of the larger choices might be the best bank for you.
The Move Your Money Project
TheMove Your Money Project, a nonprofit foundation, encourages consumers to switch to their local community bank or credit union from the big box banks. In addition to location, the group points out that community bank membership helps sustain local communities, incurs lower fees, and operates on a community based versus a profit based model. The site provides a resource for consumers looking to compare smaller institutions to their current larger bank.
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