Top 7 Reasons to Use a Community Bank

There are many reasons to switch to a community bank over a national institution. Here are seven advantages of supporting your local bank over a larger entity.

Same Services, Lower Costs

Community banks usually offer the same checking account services that larger ones offer, but at a lower cost. Debit and credit card fees, as well as online bill paying fees, are offered at a lower rate. Small financial institutions on average offer better interest rates on savings.

Local Deposits Stay Local

Megabanks often accept deposits in one state and then lend that money to other states. A community bank loans out their cash to local neighborhoods and communities. This supports other depositors in your area.

Executives Stay Local

With a national entity, you never know where its executives and managers are located. With a community bank, however, you can rest assured knowing that its executives live locally, are easily accessible and are invested in the community.

Productive Investment

Nationwide institutions set aside a substantial part of their resources for speculative trading on Wall Street. This provides a nice return for them but does nothing for their clients or the local economy. Smaller banks don’t rely on such investments, instead choosing to work to turn client deposits into loans.

Personal Qualification Criteria

Larger institutions that lack local roots usually operate on an impersonal qualification criterium when determining a candidate for a loan. Conversely, community banks are open to taking into account family history and personal character when deciding upon a loan. Individual circumstances actually matter to local banks and they’ll spend time to consider them.

Shorter Wait Times

Looking to receive swift acceptance for a new loan request? Community banks should work in your favor. Since all executives and employees are located locally, they are able to make such decisions with haste. Megabanks are slowed down by their loan approval committees, which are scattered across multiple states.

Small Businesses Understand Small Businesses

Sounds simple, right? Smaller banks and credit unions are themselves small businesses, and as such relate to and understand small businesses. Large banks are under the thumb of corporate America and don’t operate as small businesses themselves. They operate the same way mega corporations operate, paying their CEOs millions of dollars, shutting down branches when money gets tight, and working their employees long, strenuous hours. This leaves a void in their understanding of small businesses and the people associated with them.


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