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Ask the Readers: Are Local Banks Better Than Big Banks? Print
Friday, 12th December 2008 (by J.D.)This article is about Ask the Readers, Choices, Odds and Ends
Personal finance is about more than just money. People make financial choices because of emotion, of course, but they also make decisions based on their principles. Some people are guided by their faith. But that’s not the only way a person’s conscience can guide him. Josh recently wrote with a question about finding a bank that better matches his personal philosophy:
I’ve been doing a lot of reading about the economic crisis, and about the big banks being bought out and changing hands. This got me thinking a lot about banking locally.
I’ve been a Chase customer for 13 years or so, ever since college. The things going on now in the banking industry are not just scary but, in a lot of ways, unethical. When I read about the types of things these banks have been involved with other the years, it makes me want to take my business away from them.
I was wondering if you had any thoughts on big banks vs. local banks. My wife and I have embarked on an “eating local quest” in an effort to save money, eat better, and support local farmers, and I wondered if banking local has a similar effect.
Josh hopes to stay true to his principles while also satisfying his need for quality banking products and services. What choices does he have? I can think of two options Josh should explore:
- Community development banks are designed to serve residents and spur economic development in low- to moderate-income areas. An example near me is Portland’s Albina Community Bank. Nationally, ShoreBank has many locations. The Community Investing Center offers more information about community development banks, including an online database.
- Credit unions and small local banks are another option. They generally offer excellent (sometimes personalized) service and policies that reflect the community. They can have surprisingly good financial products, too. Last month, for example, I wrote that the best checking account can usually be found at a local bank or credit union.
I was an account-holder with a major U.S. bank for eighteen years. I paid an $8 “service charge” every month, as well as many other fees. Worse, I had to put up with truly awful customer service. (The bank insisted, for example, that I was stuck with that $8/month fee, even though they had long since waived it on my wife’s account. They were also notorious for waiting to process loan payments; no matter how early I mailed them, they would show up a day “late”.) I hated the place, but I was afraid to change because I thought it would be difficult. It wasn’t.
Moving my money to a local credit union was one of the best financial decisions I ever made — and it saved me $96 a year!
Now that I’ve turned into a money geek, I keep my funds in different locations based on needs. My business funds are with a large national bank that seems sound. My immediate money is split between two local credit unions. And my long-term savings are in an online savings account.
What about you? Do you keep any of your money with a local bank? Why or why not? Did you have to sacrifice anything — service, convenience, interest rates — to do this? Or do you intentionally avoid small banks? Can you offer Josh any other advice as he searches for a bank that better matches his personal philosophy?
Update: Josh has responded to your comments. Thanks, everyone!
December 12th, 2008 at 5:18 am
I really liked my local credit union, and still use it for a small personal checking account. It’s great that the credit union has less fees, but I was able to get my main checking account fee-free at a national bank as well. My biggest reason for using either of the 2 credit unions I have access to in my area, is they both hold all deposits for 10 days (unless it’s direct deposit). Obviously my paychecks weren’t fine, but to not have access to any unexpected paper checks for that long was frustrating. Once I realized bigger banks did 2 business day transactions, I just didn’t want to deal with it anymore. It got too confusing to figure out when my money would be available.
December 12th, 2008 at 5:22 am
When I first had the chance to choose a bank account, I went with my local building society because the service was good and they had a good incentive scheme for their children’s account where you got a book when you made x deposits each year. I was about 10 at the time! For the last 10 years I’ve kept an account with them in some way or another, but as the banking crisis hit home and their buy-to-let mortgage arm went to the wall and was nationalised, my savings then got transferred into the Banco Santander group, which defeats the whole idea of having money close to home. So much for wanting to support local business.
December 12th, 2008 at 5:23 am
I learned to go with local banks the hard way. The big guys would put the biggest checks through first and then charge as many bounce fees as possible when they could have put the smallest checks through first and only bounce one. And when it was an honest mistake and was not a routine occurrence, they still wouldn’t waive the fee. It’s like they were out to collect as many fees as possible from you. The local banks don’t operate like that. They are far more reasonable, and even their fee schedule is completely different. I’ve gotten burned more than once with the big guys. Our mortgage is local, and our checking accounts are with the local banks as well. Wouldn’t have it any other way.
December 12th, 2008 at 5:27 am
My husband and I are happy customers of a local bank…and by that, I mean it’s got branches statewide. We also belong to our local credit union. We keep a minimum amount at the bank, and in return, we pay absolutely no fees, plus they kick in a free safety deposit box, that we keep certain valuables in.
One thing that I really like, is the ability to have my daughters take their babysitting or allowance money to the bank once per month or so, fill out a deposit slip themselves, and hand over cash that they earned into their savings account. I think that has a really powerful effect on kids that pointing and clicking never will. Also, the teller greets them by name, as she knows that they are being brought up to be savers, and she’s the one who deposits their money.
I also brought my Girl Scout troop to the bank when they were in 3rd grade, and they all got “behind the scenes” views of how a bank works, and got to test out the coin counter ad walk inside the vault. They still talk about that, and our troop is putting savings into practice, as we are saving for a trip in 2-3 years, and they know where all that cookie money is going. Again, while I know that online banking has it’s advantages, I will likely keep our money in the local brick building on my town’s square.
December 12th, 2008 at 5:30 am
To answer the request, a local credit union is most likely going to keep the money local, but do inquire about their policies.
I use a mix of the two, I have my money with my previous school’s credit union, Bank of America, and ING. Most of my money goes to BoA (only while my free student checking and savings remains free) due to the convenience of their ATM’s and branches. I also have to say that BoA charges a ton of fees, but a simple call to their customer service will get them reversed hassel free.
ING holds the bulk of my savings due to the higher interest rates on their savings account and CD’s. I liked ING’s service and ease of use when I was looking for a high yield savings account and have made the decision not to go chasing rates, lest I forget where my money is.
The credit union holds my mortgage and also has a savings account into which a portion of my pay is direct deposited to pay the mortgage. It is also my primary checking account for bills and taxes. The CU’s loan rates were the most competetive when looking for mortgages and their CD rates beat most of the big banks (not the online only banks though). The credit union also has a lot of programs designed to help the community such as winter oil loans, cheap car loans, and monthly drawings for gift certificates to local retailers.
In the future I plan on closing my bank of America accounts and shifting everything over to my credit union and ING, though BoA is saving me on ATM fees currently as the number of SUM ATM’s seems to be greatly declining. Another benefit of this move, is that I will then be able to participate in my credit unions high interest checking accounts.
December 12th, 2008 at 5:34 am
There’s no community bank in where I live. All of the banks are banks that are found across Canada.
I just choose whichever seems good from reviews from close people.
December 12th, 2008 at 5:35 am
I am such a huge fan of credit unions, where the teller knows me, where I am a cooperative member and not a cashcow customer, and where my money goes back into the local community, and where by law and unlike banks, loans must be backed 100 percent by cash deposits. I am so done with the Big Bank after being nickel and dimed to death and treated like dirt. There are sometimes minor issues with the credit union, like not enough branches, but I do almost all of my banking online, so it works out for me.
December 12th, 2008 at 5:37 am
I place a high value on quality online banking options. I was with a local bank and moved away from them to Bank of America for their superior online banking and bill pay options. If it weren’t for the technology gap I would bank locally.
December 12th, 2008 at 5:45 am
Having both worked for and banked with a regional bank in the past, I can honestly say that I’m much happier banking with Wachovia (although I might go to Chase since I’ve read some bad things about Wells Fargo). I don’t need to talk to representatives, I don’t have worries about clearing procedures, I don’t worry about bounced checks and I really don’t even make that many transactions in general. My main concern is that there are ways to access cash whenever and wherever I need for whatever reason, and the areas which I travel to are (or at least were) well-serviced by Wachovia.
I had an incident with a regional bank here in South Florida called BankAtlantic. I used to make what they considered to be “too many” transfers each month and closed my account claiming they had some reporting issues that they had to comply with or something along those lines and weren’t able or equipped to do so (I really can;t remember the specifics). Since I had a Roth IRA, a taxable brokerage account 2 savings accounts, and a business checking account I guess I was too “complicated for them”. That was the last time I used a non-national institution.
I think the more a person learns about financial management and the better they get at the practice of managing money, the type of bank used becomes less of a concern.
December 12th, 2008 at 5:57 am
Seeing the service my dad gets at a big bank, and comparing that with the service I’ve gotten at my credit union, makes me very happy with my choice.
I disagree that learning more about mananging money makes the bank used less of a concern, because to me, it’s about even more than fees and service. I’m extremely glad that my business isn’t going to an institution that has been involved in unethical practices.
December 12th, 2008 at 5:59 am
Well, I’m probably biased in my opinion because my husband is a lender at a local bank. If you don’t mind my bias … we do almost all of our banking at our local bank. Outside of that we have an online savings account. As a lender, my husband has been able to deal with people on an individual basis to try to work things out for them. He’s also more likely to go the extra mile for someone that’s been loyal to the bank. The national banks don’t care if you’ve been a customer for 5 minutes or 50 years.
December 12th, 2008 at 6:04 am
I’ve actually been considering moving to a local bank. There’s a community bank that has advertised a fantastic free checking account with a 4.01% interest rate on balances and free ATM use. That’s far better than my current checking account through a huge national bank.
However, I live in Georgia where 5 local banks have already closed this year (out of a total of 23 nationally). How can I ensure that this bank is healthy and stable and not about to enter difficulties?
December 12th, 2008 at 6:27 am
For customer service local banks win hands down, the big guys are so impersonal. I had to listen to my co-worker rant loudly at B of A yesterday, in the end she decided to close all 11 of her accounts. I bank with both types. The rates and service are better at a smaller, local bank but they aren’t as convenient usually.
December 12th, 2008 at 6:40 am
Banking in Canada is a little different, with a few national banks, and then credit unions rounding out the mix.
My husband and I bank with one of the national banks, and we do pay fees every month. Thing is, they have excellent customer service along with excellent web and telephone banking. It’s worth it to me when my husband gets off the phone with them and he’s not cursing them. I like that I can go into any branch across Canada and it’s like my home branch.
I tried to go with a credit union, but I found the service just wasn’t there. In my case, the fee structure was about the same too.
I think Josh should ask around to see what people recommend, but make sure to ask why. There are lots of one-bank lifers out there who may not realise the grass could be greener! Also, what’s good for Grandpa and his retirment may not be good for the college student.
December 12th, 2008 at 6:50 am
I’m a bookkeeper by trade. I’ve worked with all the big banks and most of the smaller ones in my local area at one time or another. Hands down - I chose smaller.
For our personal funds I use a credit union, and the only time I’ve ever had a problem was when I tried to send an international wire (and part of the problem was on the receivers end.)
For business - the best bank I’ve ever worked with was Dai-Ichi Kangyo. Perhaps they are huge in Japan, but they only have a couple branches here so I think of them as small. My contact was a V.P. Any time I needed anything I called him and got it taken care of within minutes. With major banks getting anything done takes too much time and effort. And maybe this is just me, but I like dealing with the same person each time rather than going through a phone bank.
December 12th, 2008 at 6:53 am
I have been banking with a small town bank since the days I was broke. I was able to go in and talk to them at those times and they made concessions for me. Now we have our own business and we have much more in our accounts. No mega bank would have ever allowed us to make just interest only payments while I was going to school. We will always keep are business at the local small bank, that actually knows your name when you walk in the door.
I do have a online savings account with ing, but I have steered clear of the large mega banks.
-
The small banks didn’t go out and make up all these creative products and get themselves in to this mess, it was the large banks who took other peoples money and made bad bets with it and lost out. Know we the tax payers are giving them more to do who knows what with. Disgusting.
December 12th, 2008 at 6:55 am
I used to bank with a big bank but I hated it for all the reasons mentioned above and particularly because I always felt like they were trying to wring out of me every cent they could and giving nothing back (I think the interest rate on my savings account was something like .05%). My main hesitation with joining a credit union was lack of access to my money despite the fact that their community-oriented, nonprofit practices so much better matched my own philosophies. So I was really pleased when I discovered that most credit unions (at least in my area) are part of the Co-op Network, which means I can get cash for free at their ATMs and often make deposits too. Now I have access to so many more free ATMs than I ever had when I banked at a big bank with a big local presence and significantly better customer service when I need it too.
December 12th, 2008 at 6:56 am
I’ve gone with local banks or credit unions since college, even though I’ve moved across the country. I always research the local banks available, look closely at their fees and accounts and choose the one that’s most appropriate for us. All we use it for is checking and a small savings account, and keep our other accounts elsewhere. When it comes time to buy a house, I’m hoping to be with a good institution that we can do the mortgage through.
December 12th, 2008 at 6:57 am
I use my employer, a national bank, for checking and the benefits that come with being an employee. I advise keeping an account with a national bank to enjoy the benefits (lockbox, thousands of ATMs, many many services) but you should do most of your normal banking with a local bank or credit union.
I can’t speak to how we treat customers or normal people though, as that isn’t my area.
December 12th, 2008 at 6:59 am
I work for a large bank, and if I want direct deposit of my paycheck, then I must use its accounts. This is the main reason that I have a checking account here, but I transfer money to a higher interest online savings account and a brokerage account as much as I can and as quickly as I can. The other reason is that I have easy access to its ATM machines (there’s one in my office building), although this has become less important since I started using a cash reward credit card.
December 12th, 2008 at 7:02 am
When I was 11 and wanted to open my first savings account, my mother took me to the local credit union to do so. When I got my first checking account and debit card, it was at the same credit union. Every time I talk to one of my friends about their banks, I’m grateful that my mother took me to the credit union instead of a bank.
All the tellers there know me, and are willing to help me out with whatever I need. When the debit card company sent my new debit card to the address of record (instead of to the credit union as I’d requested), the secretary was incensed on my behalf, and made a far more scathing phone call to Mastercard than I could have done.
I’ve never paid anything for my checking or savings accounts, and I’ve always earned interest on both checking and savings. Opening a new account took me about 20 minutes. Changing my name took about 20 minutes.
If I miscalculate, and write a check for more than I have, I have an automatic overdraft line of credit that covers the difference. If (for example) my rent check goes through before my paycheck gets deposited, and the difference is greater even than my line of credit, my savings account acts as another buffer. Only if I’ve truly exhausted every penny I have and still can’t cover the check do I get charged an overdraft fee. And if I go in and explain the situation (I was SUPPOSED to get paid on the first, but my stupid boss decided to date the check for the third) they’ll often waive the fee and put the money back in my account.
(Contrast this with friend of mine who banked with TCF and used his debit card 3 times when the checking account was out of money. As a “courtesy”, TCF allowed those transactions to go through, and charged him a $30 fee each time. Each transaction was less than $3, so for going over his limit by $10, he was charged almost $100. (He deposited enough money to cover the difference within 12 hours))
Also, my credit union is part of the co-op network (http://www.co-opfs.org/public/locators/atmlocator/) which means I can do all my banking at nearly as many locations as if I was with TCF or B of A.
Join a credit union. It’s the best decision I ever had made for me.
December 12th, 2008 at 7:03 am
I was raised in a small town and grew up with a small home owned community bank. The tellers and loan officers greet you by your first name when you come in. When I left to go to college 210 miles away, I had to open an account with a big bank. They seemed impersonal and unwilling to work with you on anything. (I felt this would be different if I had several million in deposits there.) After college and my MBA, I moved back to my home town. Things are still the same. If I am running short and need to write a check with out funds, I let them know beforehand that I’ll have a deposit in a few days, and they work with me on that. I like having the flexability that a small bank affords.
Also, since this small bank doesn’t have officers making multi-million dollars with big bonuses, I know they won’t (and didn’t) play the bad mortgage game that so many big banks participated in. This small bank was formed to help the community, not extract outrageous fees. I will always bank with small banks. They remember why they are here, and that is to help those who need their services.
December 12th, 2008 at 7:03 am
I’ve only belonged to 3 banks in my life. The first was a state employees credit union. I’m still a member and still even use those accounts (although I no longer live in that state). But I always get good service and great rates.
My second bank was SunTrust (initially NBC before they were bought out). Large bank, but conservative lending practices. Service is sometimes great although there was a time, for about a year, I got bad service. But they didn’t sell my mortgage and provided me the perks you expect - free checking. I was most impressed that they never sold my mortgage (8 years) and that refinancing was cheap and easy with them.
Now I’m moving and am going with Bank of America. I chose them because they had the best rate on a mortgage. I’m also getting free checking. So far I’ve gotten great service, but I guess time will tell. But with the fantastic loan I’m getting (far better than anyone else could match) I’ll take a drop in quality of service because I’m saving a bundle over the long term.
December 12th, 2008 at 7:06 am
I grew up in Southern Or and joined the Coast Guard and they have moved me to Eastern North Carolina. The banking over here isn’t as good or inexpensive as I was used to. Might have something to do with a Grandma working for the bank back home or might not.
I can’t stand the banks in this town so I bank through the mail and web exclusively with a military only non-profit. It saves me way more than $96 year, and they are decent about processing and grace periods. I don’t see any way for profits could compete against them though so may not be a fair comparison.
December 12th, 2008 at 7:08 am
Having read through the comments, I wanted to add two things:
My credit union has had online banking for at least 9 years (I know I was able to do my banking online when I left for college; before that I didn’t much care).
And most checks I deposit are available immediately. The only hold time is for out-of-state checks and non-paychecks over $1000.
December 12th, 2008 at 7:08 am
Yes, because the government has less control over small local banks and CUs.
December 12th, 2008 at 7:10 am
I would say yes, only in that credit unions typically offer better service.
Then again, how often do you go into your bank? I know some must do it fairly often… but we do everything electronically.
Banking is becoming a commodity for me — give me the best price (interest rate) and best features, and I’ll stick with you as long as your service isn’t terrible. Thankfully ING is awesome on customer service, so no complaints there.
December 12th, 2008 at 7:14 am
It really depends on what you want from your bank account. If you want personal service then seekout a local bank or even bank with your post office. If you are not interested in personal service then an online banking facility might be better.
In any event all banks have an business statement telling customers where they invest their money. Here in the Uk ethical banks include Cooperative, Smile ( online arm), and Tridos.
The bank should provide you with the service you want. It pays to shop around until you find one you are happy with.
December 12th, 2008 at 7:17 am
” Tana Says:
December 12th, 2008 at 5:23 am
I learned to go with local banks the hard way. The big guys would put the biggest checks through first and then charge as many bounce fees as possible when they could have put the smallest checks through first and only bounce one. And when it was an honest mistake and was not a routine occurrence, they still wouldn’t waive the fee. It’s like they were out to collect as many fees as possible from you. ”
This same thing is what finally convinced me to close all my accounts at Wachovia and go with the Navy Federal Credit Union. I already had my Mortgage through them, and a savings account. I couldn’t have made a better move.
December 12th, 2008 at 7:27 am
I bank at the same credit union my family has been with since it was run out of a woman’s home (seriously - my mom just told me this story for the first time and I couldn’t believe it! Don’t worry - it’s gotten more ‘official’ since then). Now, even though I live two hours away from the nearest branch, I still use them. My paychecks are deposited directly, I can do all my banking online with them, and when I need cash, I just hit up one of the ATMs in my area that are part of the credit union network and don’t pay any fees. If I have the odd check here and there that I need deposited, I can do that at one of the local credit union ’service stations.’ I like knowing that the people at my credit union have known me forever. When I went in there with my mom after my dad passed away to give them copies of the trust documents, the manager hugged both of us and even cried a little at the news that my dad had passed. That, combined with their competitive rates on services, is enough to convince me to never try another big bank again (which I did in college).
Truth is, credit unions today offer all the conveniences of the large banks without sacrificing customer service. To me, it’s a no brainer.
December 12th, 2008 at 7:27 am
My local credit union used to be restricted to the employees (and their family members) of my city’s largest employer. That employer’s not so large anymore, and the credit union’s no longer restricted to employees, but I’ve never had a single reason to complain about their service. When someone made fraudulent charges on my credit union debit card over a weekend (purchases made in Mexico, when I was nowhere near it), I got a call from the credit union within hours, asking me to confirm the charges — and they helped me fix the situation within days. They won my loyalty then and there.
I have an online savings account for long-term savings, but my checking account, debit card, credit card, Roth IRA, emergency fund, and a small ‘flux’ savings account are all with my credit union. The only drawback is that I can’t make fee-free ATM withdrawals unless I’m back in my hometown, but that’s a very small price to pay for my peace of mind.
December 12th, 2008 at 7:38 am
I have both a positive experience and a negative experience with local banks. On the positive side, I have been a member of a credit union in Colorado for fifteen or so years and have only once been displeased with them (which was when I was doing something extremely unusual and someone who had probably never seen anything like that before gave me slightly incomplete information).
On the negative side, I was buying a house in another state to be the family manse, and I decided that it would be best to use a local bank, to support the community where my family was now located and so forth. That place was run by Larry, Curly, and Moe. When I was closing I found an error on my mortgage; the contract specified I had to live in the house when I had been clear all along it was a second home. They told me to just go ahead and sign it and then they’d get me a letter saying it was okay for me not to live there. Um, no. I of course said that I would sign after I had the letter. That was the least of many unprofessional screwups, all of which seemed to be standard operating procedure.
So I prefer local banks, but definitely not _that_ local bank.
December 12th, 2008 at 7:38 am
My mom is a branch manager of a small local bank in my home town. She is the manager of their only branch bank actually.
I still have a savings and a checking account there but I don’t use them for my primary accounts.
The cons to the small bank is that they only have 1 ATM machine and until this week infact had no online banking. So when I traveled for work I would always have to pay ATM fees. The small bank didn’t charge me fees for using another banks ATM but the other banks did.
The BIG Pro to this bank is that they don’t sell their loans. That means if you have a home or Auto loan through them. They actually hold the loan. No securitized debt at all.
They have not forclused on a single home or repoed a single car in this entire down turn to date.
They are almost completely sheltered from the current credit cruch. They are still making loans. Business as usuall.
Their standard savings interest rates are roughly the same as all the other major banks but they have special savings programs that offer better returns and CD rates are pretty good as well.
Plus if you actually go into the bank there is a good change the bank owner will stop and say hello or get you a cup a coffee if you are waiting to talk to someone.
December 12th, 2008 at 7:50 am
We have tried several banks and credit unions. My husband had a bad experience with a credit union which held his checks and charged fees every chance they got, and never waived a thing though he’d been with them for years. He tried to switch to another credit union but they wanted to hold all deposits for 14 business days. We can’t live like that. So finally he switched to a big national bank, and they’ve been pretty good to him so far.
When I graduated college I opened an account with a big bank which waived monthly fees for recent grads. However I couldn’t get direct deposit at my job so they eventually re-instated the fees. Then another (large national) bank came along that didn’t have fees, and I switched. I’ve been generally happy with them and they’ve always done right by me, though they are in the thick of the mortgage mess. I’ve done business with other big national banks for my job, my mortgage, and a club I belong to, and I’ve always been treated reasonably well. Others I know have had very different experiences; I guess everyone just has to do what works for them.
December 12th, 2008 at 7:55 am
I use a local bank and have been with the same one for nearly 10 years and 4 mergers / buy-outs of other local banks. In the process their name has changed 3 times but the customer service and support has always been good. My main reason for sticking with them is that they have branches scattered all over and have branches in all of one local grocery store with Sunday hours.
This is only my checking account though, savings is with ING.
I did open an ING checking account to take advantage of a $50 sign-up bonus they were doing last month, but plan on closing it in Feburary or so as I don’t need two checking accounts. I also only write about 3 checks a month, those are for bills I can’t pay online or are too much of a hassle to pay in person.
Maybe I’m low maintenance, but all I ask for is a bank with good customer service when I need it, the ability to accept my direct deposit from work and local hours should I need to stop in and deposit or cash something. So long as it’s FDIC insured, doesn’t much matter to me what name is on the building.
December 12th, 2008 at 8:02 am
I absolutely love my local bank and I would never consider going anywhere else for my checking account, although I do keep a savings account with ING for the better interest rate. I may be a little biased b/c my mother-in-law is a Senior VP there, but I’ve banked there my whole life. Checking is totally free(but no interest), they have good in house rates for auto loans, I get rewards for using my debit card, my paycheck is directly deposited, great online banking, tons of atms around town, and the service is phenomenal. Every customer is treated very well. The tellers get to know you and it is obvious you are more than a number there.
Another thing that I really like about my local bank is everything they do to help improve the community. They’ve sponsored scores of community events, provided low to no interest loans to artists to renovate old homes and turn them into art galleries downtown, and helped small business really take off. They also received recognition as the #1 place to work in Kentucky and they were ranked in the top 15 small business to work for in the entire country by the Wall Street Journal. They treat both their employees and their customers like family.
December 12th, 2008 at 8:12 am
I have an account at my local credit union which I love (they have free coin counting machine) and one at a national bank, i travel alot and make alot of deposits by check since I am self employed, my local credit union takes a longer period to clear my checks vs the national bank.
Now that i think about it, i never had any fees charged on any of my accounts, I do reconcillation every month and I always read all the fine print, and avoid any monthly charges.
December 12th, 2008 at 8:13 am
I used to keep my money with a small, Rochester area bank, but a few things changed that:
1) I knew that when I finished college, they would start charging me monthly fees.
2) I moved to California for the summer, and realized I would have almost no access to my bank account out there (except for online).
3) Moving to California for a summer made me realize that I probably won’t live in Rochester after I graduate.
Someday, if I end up living in Rochester as a “real adult,” I’d like to reopen my account. There was just something nice about dealing with local people - I can’t quite explain it.
December 12th, 2008 at 8:31 am
My wife used to work at the Credit Union that we use, and we’ve been with them for sixteen years jointly (and she’s been with them since she was sixteen years old). Overall they have their ups and downs like many other organizations, but on the whole they have treated us very well and we have done well with them as our primary and immediate needs bank (plus, since we live very much on the “envelope system”, we do a lot of face to face cash withdrawals, since the ATM doesn’t typically give out that much as any one time
).
I keep a secondary account with ING direct for my own “Blow Money” (easier to deal with at times that just hanging onto the cash). Our emergency fund and bills escrow account (the place we put money for those periodical but every year events like homeowners insurance, life insurance, property taxes, auto insurance, etc.) all reside at our credit union, though.
December 12th, 2008 at 8:31 am
In my experience, many banks, large and small are the same in terms of risk.
I have a small bank I deal with in Richmond Indiana that sent me a letter a few months back asking not panic as it was having a tough time due to risky investments. At first I laughed thinking the letter was some sort of prank. After getting it verified at my branch, I really got a cold hard shot of reality knowing that greed runs on both ends…the large banks and small banks that are trying to expand are all trying to make a quick buck off the backs of account holders.
I know the FDIC insures my money, but its stress enough knowing that your small town bank is in crisis.
Personally, I am not loyal to one bank. With good credit, the consumer can call the shots and search for the bank that is willing to match your needs. Be it a loan, high interest rates, etc.
http://www.bullsbattlebears.com
December 12th, 2008 at 8:31 am
Personally I started out with Chase as my first real bank account went with them for several years and switched to ING Direct and I couldn’t be happier. I don’t want personalized service, I want a bank that holds my money processes deposits and checks and pays interest.
December 12th, 2008 at 8:32 am
I absolutely love my credit union! Let me count the ways. My 15 yr mortgage rate 5.125%; my car loan rate 4.25%; my visa cc rewards; my immediate access to funds no matter what form or where they are deposited; my access to a very large ATM fee-free CU network; my no service fee cheecking accounts, travelers checks, cashier checks, etc.; my dividend producing checking and savings accounts; my free online billpay; and best of all my very CUSTOMER FRIENDLY ‘customer service via phone or in bank’. Most times I walk into the bank and even though it is not often, they treat me like a regular…it’s like Cheers…”you want to go where everybody knows your name”
December 12th, 2008 at 8:33 am
Some local and regional banks offer online checking accounts with interest rates that clobber the big banks. You have to search for them but the search can be worth it.
December 12th, 2008 at 8:40 am
Yes and No. I bank at a big bank, a community bank, and an online bank. Each has their own strengths and weaknesses.
Since my regional bank was absorbed by Bank of America, I’ve been getting charged fees left and right. The customer service has been horrible. I like larger banks because of their ATM locations BUT I use the ATM less than once a month. In terms of rates on savings, MMA, CDs, and checking accounts, they’re lousy. I’m closing my account at Bank of America. It’s kind of sad since I’ve had an account with LaSalle Bank for about eight years now. Chase Bank has been good so far. I’ve had no complaints.
Glenview State Bank, the local bank I do business with doesn’t have great rates either but they spoil their customers by waiving fees, good customer service, and great banking hours. They also seem to be standing strong because they did not soften their lending standards.
I bank online for the higher interest rate on savings and CDs. Surprisingly, they have better customer service than Bank of America did.
In the end, I’ll probably move more of my immediate money into the community bank, keep enough money going to Chase for my credit cards, and keep my emergency cash at ING Direct.
–mark–
December 12th, 2008 at 8:41 am
We bank at an employer credit union and also a major bank (that just got taken over by another major bank). One of the reasons we had to go with a major bank was because we’d moved and no longer had physical access to the credit union or non-fee ATMs so getting cash was difficult. Now that we have access to the C.U. again, we do most of our banking there. I do love the online banks, though, and have a money market, savings and a CD just because of the great rates. If I can get a better rate at my CU, I go there, but that’s only happened a few times. It’s so much easier to get loans at the C.U., which we’ve had to take advantage of in the past.
December 12th, 2008 at 8:45 am
I was lucky enough to sign up with USAA before they closed it off to military only people. They are the best bank ever! I still have a Bank of America account, but I only use it as a “middle man” for transferring funds to my USAA since USAA doesn’t have a branch locally.
December 12th, 2008 at 8:47 am
I have a great local bank, well it used to be a local bank when I started there,but now it’s pretty big. I bank at TD. Used to be Commerce Bank, when I started there it was only in PA, NJ and NY, it was bought up and now it’s a goliath, but they still have no fee checking and great service. So I’m staying.
I don’t invest my money there, bank CD’s are untrustworthy and the returns are subpar, and who knows if you’ll ever see your money again these days!….I don’t borrow money so their loan rates are not an issue…I don’t even know what they are!
I stash my cash in a MMMF, I just don’t trust banks anymore (or FDIC for that matter) with my liquid cash…A good money market manager with a worthy track record is safer (IMHO)…I trust Vanguard to safeguard my money more than I trust the federal government!
December 12th, 2008 at 8:58 am
I’m a banker in Canada. Our system is very different than in the USA. We have 5 big national banks and then many smaller credit unions that service certain groups.
So in Canada it’s all about which of the big 5 you like the best. While on a corporate level there are certain differences. I find the true test is found with the local branch staff, as they are the people you’ll be dealing with on a regular basis.
December 12th, 2008 at 8:58 am
“But that’s not the only way a person’s conscious can guide him.”
*cough*
Conscience.
Unless you mean to say we shouldn’t be making choices subconsciously.
To answer the question, though… I used to bank with a local credit union, and loved them. They would even waive overdraft fees and such if I went in and asked them nicely. But the interest rates on their savings accounts weren’t great, and you didn’t have access to ATMs while traveling. So when I moved, I had to move banks… seems like all large banks suck, though I’ve been pretty impressed with ING Direct. You still have to have a brick & mortar account. So far I’ve been through Chase, switched to WaMu, oops, now I’m with Chase again… none of them are great, but I’m not eligible to join any local credit unions, so that’s where it stands right now.
December 12th, 2008 at 9:01 am
I did have accounts with some major chains in the 1980s, but I had so much trouble — financial hassles, time hassles, bad management, takeovers– that I eventually just gave up and went back to the credit union I’d signed up with at a summer job, and had my paychecks electronically deposited. This was a great decision despite the fact that the nearest branch was now over an hour away. I have a credit repayment loan and a visa card with them now, as well as savings, checking, and vacation and Holiday clubs.
About 10 years ago I went to a small local bank branch to cash some Savings Bonds and ended up signing up for a nice little savings account with them. I’ve been really really happy with this account, and my roomates and I put our joint account at the same bank (now a conglomerate of two local chains).
We’ve now moved further away, but when we do change banks, I’ll be holding out for a local one. After getting screwed by Hamilton Bank, Meridian, Wachovia, and PNC (I didn’t change banks, they did), as well as MBNA, Chase, Citicorp, and Bank of America on credit cards, I’m interested in having my money somewhere where the bank is interested in my business, not in risky high finance.
December 12th, 2008 at 9:02 am
Our “small, local” bank has changed hands three times in 13 years! Now suddenly, our “local” bank is based in Canada and, while I’m sure Canada is a lovely country, we are not pleased. It takes 2 - 3 days for transactions to show up online and they can’t be automatically downloaded onto MS Money or Quicken. We are looking for another bank.
December 12th, 2008 at 9:03 am
JD,
Except for a couple years after high school, I have banked with small local banks or credit unions since I’ve had a bank account of any kind, including the savings account my mom setup when I was a kid.
I had a Wells Fargo account in college because they were across the street from my apartment. I switched to a credit union as soon as I was able and will never bank with any of the big corporate institutions.
December 12th, 2008 at 9:10 am
@Kat (#49)
Thanks. I hate when I make mistakes like that. Can I claim that I was still feeling sick? Probably not. That’s just laziness and being in too much of a hurry to proof-read. Thank you.
December 12th, 2008 at 9:29 am
Here’s what i do and i love it:
Since i HATE BOA, but i need BOA as I’m setup for money transfers in case of emergencies for family members, I ONLY USE IT TO DEPOSIT $$. Nothing else . Once its in the account, I can have it immediately go to my Schwab Invester Checking Account. Schwab has amazing customer services, and i’ve had 0 issues with them .BOA is another story .
Than, once in Schwab, I can transfer to my FNBO Savings acct if needed.
PLUS , I never have to pay for an ATM fee with Schwab, and I get to make deposits at BOA Atms
December 12th, 2008 at 9:33 am
My local bank (People’s United in CT) has branches out the wazoo in my area, including ones in supermarkets with extended hours, has a pretty good online interface and is small enough that it doesn’t need a bailout. Its interest rate on savings accounts is pitiful, so I use ING for that, but the checking account is great.
December 12th, 2008 at 9:51 am
I stand firmly behind credit unions. The one I’m in now is great. I can do my banking primarily online including transfering money from my checking or savings to my car loan account. The transfer is instantly recorded so no late fees unless I actually do the transfer transaction the next day. The couple times I accidently overdrew my checking account, they pulled it from savings and charged me a whooping $4. Sure beats the heck out of the $25 charges! Now I don’t know what they would do if my saving didn’t cover it, but a long as a keep a couple hundred dollars in my savings, I have a cushion.
The only thing I can’t do is work with Mint. My CU has a security passcode system that Mint can’t integrate with so no using any cool online money management tools. Small price to pay for good service and no fees.
December 12th, 2008 at 10:10 am
Hi Josh,
I have been a member of a credit union for a long time. The operative word is “member”. You are not a customer and you are certainly treated differently. They have great services and they will not, as stated above, nickel and dime you for every little thing. Plus, you get personalized service…there is not a credit union on every corner, so the member service reps and tellers get to know you. What they offer is comparable to commercial banks; the difference is they will work with you through any financial issues. They can also help you reach your financial goals. But understand that credit unions are not as populous as commercial banks, but this has not stopped me from being a member.
December 12th, 2008 at 10:17 am
I am a big fan of small, local banks. I keep a checking account with a local bank and have an ING account for savings. I’ve been with my current bank for 10 years and I’ve never paid a transaction fee for doing business with them. My bank is also a participant in the SUM program (sum-atm.com). This allows me to use any ATM with the SUM logo free of charge. The program was started in MA and has spread throughout New England but I do not know how widely available it is in other parts of the country. At least locally, my no-fee ATM options are plentiful!
December 12th, 2008 at 10:44 am
I have accounts with two of large banks based locally that have footprints in other parts of the country as well. They are still in good financial shape despite the credit crisis and I can feel good about helping the larger local economy as their customer.
These accounts are in addition to an online savings account, which I love for the interest rate! I’m happy with the two B&M banks for the most part. There have been times I’ve considered switching to a credit union because I hate the out-of-network ATM fees and like that some credit unions waive those.
December 12th, 2008 at 10:58 am
I only use small banks. I have most of money in the bank a block from work. They have no fees and overdraft protection. I also use another small bank in the town between work and home. I have had that account since I was 12. For $11 a month I get a variety of personal services and as an added feature my mom’s best friend works there and can keep checks from being returned when I make a mistake. My husband uses a national bank because he is an ATM/cash junkie and fees from my banks would eat him alive.
Several years ago we had our identity stolen. My bank had the money back in my account in one business day, covered all fees, opened a new account and waived the fee for new checks, and most importantly apologized for not catching it before it was processed. My husband’s bank took three months to return our money. They waived fees for the overdrafts, but they had allowed the people to change the information on his account - added signers, changed mailing address. It was a nightmare. Give me a small bank anyday.
December 12th, 2008 at 11:38 am
J.D., if you don’t mind my asking, what POSSIBLE reason could the bank have given you for treating you and your wife so differently? At the very least, one would think the bank was leaving itself open to charges of sexist and preferential treatment.
Credit union, here.
December 12th, 2008 at 11:42 am
I had Wachovia & disliked them a lot. The local paper prints a list of the interest rates at different banks in the area. I noticed time & again that the state employees’ credit union had the best rates. Eventually, I became eligible to join & was ecstatic to. They have AWESOME online functions & services. I can even open a CD online. I LOVE my credit union. Even if I move out of state (and away from the bank), I will keep my “shares” account open with the minimum balance ($25) just to stay a member.
December 12th, 2008 at 11:48 am
I’m trying to break my record of most consecutive years lived in the same place– my current life-time record is three.
Once I break that record, perhaps I’ll be able to trust that I’m actually going to be in one place long enough for it to make sense to look at local bank options.
Until then, I’ll keep my internet-only-bank. In theory I prefer the idea of small, local banks, but having an internet-only bank certainly made my last six moves a lot easier! Just update the address online, and I’m good to go. Before that I used local banks, and it made moving an even bigger pain than it already is.
(BTW, what sorts of things do people do to “put down roots” in a place that they hope to actually be staying in for a while? How does one “integrate” oneself into the so-called “local community”? Especially when one doesn’t have (or want) kids, and thus can’t do the meeting-other-parents thing. That’s what I’m trying to figure out, because I’m really, really tired of always having to move all the time. I’m trying to convince myself that moving is something one can choose to do or not-do, rather than something that just *happens* periodically, like the weather.)
December 12th, 2008 at 11:49 am
I have had my money in a credit union since I was young. I also use ING for long-term.
The main difference b/t a credit union and a bank is this: Credit unions are non-profit, you are actually a shareholder and have say about what goes on by having an account there. Any money the credit union make pays for bills, employees, and goes back to the members.(you) Thats why they often have better rates.
Anyway most credit union do sharebranching, so in reality you can access your money anywhere, even Alaska!: http://www.cuservicecenter.com/
I ended up working for a credit union at one point. In training we were always talking about meeting the customers needs and telling them about services that might meet those needs. We NEVER try to sell anything or meet any quotas.We only mention service if they do or you see that they are buying money orders alot, you could tell them about a special account where you get those free. At the big banks, you actually HAVE to meet “sales” quota. Talk about pressure…
We had someone who worked for a regular bank for 14 years and she couldn’t believe that we hardly had any fees and when we did it was MUCH lower.
I’m talking about credit union NOT local banks, there is a difference.
December 12th, 2008 at 11:51 am
Coming from a guy who works for a big bank - mind you - in trying times you are better off to go with the big bank. Your greatest concern should be the assets you dont know about that many smaller banks have on their books (subprime mortgages and auto loans). Your deposits back those loans - many bank have less than $100mm in total deposits and are leveraged well beyond. Big banks will take greater care in calculating risk - they also have the assets to cover problems. Chase bank now has well over $900b in total deposits - that’s a lot of money. Most of us dont have $250k in deposits, meaning we are FDIC insured, but I like the idea of added protection.
December 12th, 2008 at 11:52 am
@La BellaDonna (#61)
The bank didn’t give a good reason for treating us differently. She also got free returned checks and I got nothing! Drove me nuts. I hated that bank.
December 12th, 2008 at 11:55 am
We have USAA like Robert #46 because we are military and move a lot. It would be a pain to open and close accounts every time we moved, especially when we go overseas. Plus USAA reimburses all ATM fees (to a certain amount each month). Their service has always been excellent for us.
December 12th, 2008 at 12:21 pm
My wife and I use a brick and mortar bank merely for everyday cash. We are with a big bank — WaMu (now Chase). The majority of all our savings & checking are at ING. We only keep enough money in the B&M bank to pay bills, buy groceries, and the like.
Anything above and beyond that is dumped “away” to our online back. It’s much less tempting to break our budget when the money isn’t as nicely accessible.
December 12th, 2008 at 12:22 pm
When I moved to the Detroit area nine years ago, I went with a small regional bank. A couple of years later, it got sold to a larger regional bank. A few years later, it got sold to Chase.
I hated Chase, but didn’t think I could go anywhere else and have access free to an extensive ATM network.
Then I got sick of all the fleas they even threatened to charge, and the $300 minimum on my savings account. I also didn’t like their unethical practices. After I got ING, I shopped for a local credit union.
I switched and I am very happy. I do all my banking at customer service centers because they’re more convenient than driving to a branch. No more fees — yippee!
December 12th, 2008 at 12:29 pm
My local credit union is downstairs as I type this. So yes, I keep most of my accounts with them and am working on transferring the remainder. Credit unions in BC are fully insured, the plans are better, they know my name, and they smile.
December 12th, 2008 at 1:18 pm
Too bad banks aren’t required to hold 100% deposits, then one wouldn’t need it to be FDIC insured. If the bank goes under, they have 100% of your money in the vault.
Anyways, I’ve gone with the RBC (Royal Bank of Canada) only because that’s the only bank in my small town since I was a wee lad.
Lately, I’ve been really annoyed with their ‘fees’. I want a bank with no transaction fees, etc. Perhaps ING Direct?
December 12th, 2008 at 1:26 pm
@ Mike
for my Canadian funds, I use TD Canada Trust but hate their fees and feel like I get no break for all the cash I have in that account, but now, I have begun to use more of my PC (Presidents Choice) account…apparently its linked to CIBC so I can use the CIBC ATM’s and get no fee for chq,debit transaction, fee bill payments and an amazing savings rate.
Check them out!
http://www.bullsbattlebears.com
December 12th, 2008 at 1:33 pm
Living in NYC, I don’t know too many local banks either because they’ve all been eaten by bigger ones or because of my own ignorance. I would consider joining a local bank but convenience always gets in the way of those things. It’s true that the service is not any better because it is a giant, famous bank that has to preserve it’s name. Sometimes I wonder if their service doesn’t improve because no one leaves because they portray the illusion that they’re our only option. Yet, here I am, still a part of citibank…
December 12th, 2008 at 1:36 pm
In high school I opened a checking account with the biggest back in the area. Now they are a regional bank. The was my first taste of impersonal service.
At the same time the company I worked for had an employee CU. It was in a back office of the facilities. I joined it and closed my account when I left the company. I came back to work for them several years later. I was having financial problems before I started working for the company again and the CU gave me a loan on my junker car to bail me out. (The big bank laughed at me, I tried them first.) Then the company moved their offices and there was not enough people to keep the CU going. They merged into anouther bigger CU. That CU was worse than the big bank! They did not know me and all they were concerned about is growing bigger. I paid off my loan and closed me accounts.
I tried a small regional and could not deposit or cash a check in a “branch” in another city. They shared the name but not the same computer system so they had no access to my account!???
After trying another CU that had a managment crisis. I knew the CU Pres who was fired. I did keep my accounts there until I sold the home that the CU had the mortgage. They treated anyone who was friends with the old management like crap.
I then tried another regional. They would call me if I had a check that would bounce. They would give me an hour to get funds in the account before they processed it. Then they stopped doing that by orders of the newly merged corp offices. After that I was fee-ed to death.
Now I have a Chase checking account just to have a local account for my ING checking and savings. I wish ING would have paper checks and not require a local account. I would go completely with them.
Personnaly I do not have any faith in either the local credit unions around here as they are all too big and treat you like a number. At least they keep there employees happy. The large banks that I do use for work have all new staffs each year.
December 12th, 2008 at 1:47 pm
Banks make money off of your money. Thus, by keeping your cash at an institution you are literally financially supporting their projects.
So, if you consider switching accounts, it’s worth taking into account how your money will be used.
Credit unions are not-for-profit and any money they make are distributed as dividends to their members. This helps keep cash in your community.
Another option is to invest in an “ethical bank”, one which vows to only invest your money in ethical projects.
Co-op (a UK bank), for example, will not lend to companies that are linked to oppressive regimes. Triodos Bank (also British) will only lend to organizations that benefit the “environment, culture and society”.
“Ethical” banks also have been more transparent than mega-banks and thus have not been hit as hard by the credit crises.
Remember, it’s your money!
December 12th, 2008 at 2:18 pm
We keep all our money at a local credit union and at Vanguard. I don’t worry about network ATMs because our credit union reimburses all ATM fees within two business days; even a $10 withdrawal fee in the Las Vegas airport. They make deposits available instantly, even if you just log in to your account and tell them you’re putting a check for $X in the mail. Cash back Visa cards are standard, requests for loans are processed immediately, checks and online banking are free, there are no minimum balances, and they don’t charge overdraft fees right away, just resubmit the request for payment two days later (this has only happened to me once, I’m happy to say).
When I first ordered checks with them they accidentally misspelled my name, and the CEO called to apologize, fedexed a new box of checks with the correct spelling to our house, and put an extra $10 in my checking account to show how very, very sorry she was. When my 3-year-old expressed interest in a stuffed animal in the window one day, the teller gave it to him. They make local loans, maintain reasonable lending standards, and are pretty much the nicest people I have ever met. So I have no interest in a big bank.
December 12th, 2008 at 2:39 pm
I went the credit union route when the opportunity presented itself, and would never go back to full-time banking at a major bank. That said, I’ve also recently set up ING accounts (on JD’s recommendation!) and love the flexibility that offers for setting up my budgeting and accounting just the way I want. And, I do maintain an account with a national bank, but this is primarily a vehicle for paying a loan, and I don’t actually “store” money there. I will retain the account regardless, however, because I’ve heard from people who have moved from one state to another in the post 9/11 new-finance-rules-to-block-terrorist-days that they’ve encountered tremendous difficulty moving their money from one place to another. Even having a chunk of cash to open the new account was looked on with suspicion!
December 12th, 2008 at 3:56 pm
I keep my checking account at Bank of America… but since I move around (a LOT) its the most practical choice for me. My dad also has an account there so its easier for me to get money from him if I need it, plus I can do everything online AND there are branches and ATMs all over the US.
That being said, my mom uses a local credit union and loves it. Its perfect for her needs.
December 12th, 2008 at 6:16 pm
Banking is about money and convenience, plain and simple. I’m not going to give my checking business to a local bank simply for charity’s sake. Since the national bank I use (Wells Fargo) offers free ATM access in every mall and airport, free checking, no fees, great online banking, etc., etc., etc. I simply can’t justify using a local bank. My savings are in a different category altogether - that money is there to make money…and online banks are by far the best choice (although some brick and mortar banks have decent CDs).
December 12th, 2008 at 6:22 pm
Mike - you do realize that banks are only financially viable if they use deposits and make their own investments with that money. Requiring banks to keep 100% of deposits in house would require banks to make money in another way - e.g. by charging you $10 to see a teller every time. We should be thankful banks DON’T keep all deposits in-house, too, otherwise our financial credit system would completely freeze (the majority of businesses, especially retail operations, need loans to operate).
December 12th, 2008 at 6:27 pm
My first saving and checking accounts when as a teen were at our local credit union and I kept those accounts through college and a couple years after. But eventually it became inconvenient to have my money “so far away” (I moved out of state) so I joined a regional bank that serves 5 states, so I was convenient to stay with the bank even when I moved to yet another state.
I would love to join the local credit union, but the problem is I don’t know how long I will be living here. I don’t want to go through the process of moving my money over, changing direct deposit, setting up bill pay, etc, only to move in another year or two and have to do it all over again somewhere else. I know it’s not THAT difficult to switch banks, but it’s still a hassle and I haven’t had any problems with my bank so I’m sticking with it for now.
December 12th, 2008 at 6:44 pm
My semi-local (state) bank seems to be a great compromise between small, local and big, impersonal. The fees aren’t that bad and the customer service in the branch is always outstanding. The Internet folks are great - the call center is hit or miss. But I have had very reasons to call them (knock on wood). Nothing has gotten lost, no deposits have been unduly held and transfers to outside accounts have been made very quickly.
I have had horrid luck with local credit unions. They have had the lowest fees, yes, but also the absolute worst customer service.
I keep my savings in my ING account(s) and have had no absolutely no problems there.
I have tried Schwab and Etrade but both lost my money until I started the formal complaint process with the government.
The big banks that I had held accounts with in the past were all just as bad as others have already said. I think Washington Mutual and Citi were the worst…and look where they are now.
December 12th, 2008 at 7:24 pm
Because we are military, and move and deploy regularly, we use USAA and have been thrilled to death with them.
The customer service has always been stellar and they haven’t ever given us trouble over the fact that we’ve got odd banking arrangements when one of us is deployed.
December 12th, 2008 at 9:17 pm
I’m a big credit union guy, mainly because I always receive personal service. I joined my local credit union when I was in college and have stuck with the same credit union 10 years since graduating.
December 13th, 2008 at 3:33 am
I hate the fact that some banks really are old fashioned and out of date. I’ve changed banks numerous times in the past and whilst it is difficult, it isn’t impossible and it really does make sense.
I shall be moving from an Australian owned bank to a New Zealand owned bank and in really, since we’re only a population of 4 million anyway, that would probably be considered local in terms of your part of the world.
December 13th, 2008 at 7:25 am
Beth C or anyone-
Most credit union do sharebranching, so in reality you can access your money anywhere, even Alaska! They pull up your account at your “home” credit union. So as long as you have a credit union that does that does sharebranching you have more locations than you’ll ever need: http://www.cuservicecenter.com/
December 13th, 2008 at 8:09 am
I’m another USAA person here, since my husband is in the Navy. It’s a fantastic bank with great customer support (plus, you can deposit checks at home by scanning them in!).
They have financial advisers on staff and it’s free to talk to them (and they’ll talk with you for as long as you need with no problem). My husband and I have called them several times to ask for their opinions about our current plans, me starting a business, debt payment strategy, etc.
And even though I don’t ever get cash out of ATMs, my husband does, and it’s really nice that they refund the fees.
I can’t imagine finding a better bank locally, so even when we’re in one place for a long time we’ll probably stick with USAA.
Plus, their insurance is way cheaper than anywhere else (especially with multiple plans) and you can have as many bank accounts as you want for free (we have… uh… a lot).
December 13th, 2008 at 10:49 am
This is the first time I’ve commented, but I had to add my love of and preference for USAA. I banked with local banks as a child and teenager, but since entering college I’ve moved every year or two, making it difficult to maintain local banking relationships.
I’m a USAA member through my grandfather, and began banking with them as a sophomore in college. Now my husband and I bank and purchase insurance almost exclusively through USAA. The customer service has always been exceptional, and their online banking is innovative and elegant. They have the fewest fees of any bank I’ve seen.
By contrast, I have had very poor customer service experience with Bank of America - it has taken multiple interactions to resolve simple issues - and I find their online banking clunky and restrictive. We do have a checking account with them, but only so we can make payments to our Bank of America credit card if needed.
It’s worth mentioning that USAA recently expanded member eligibility, lifting some restrictions. Consequently, if you have a parent or spouse who served in the military, they (and by extension you) may be able to become USAA members.
December 13th, 2008 at 12:34 pm
My credit union (University of Michigan Credit Union) not only has no service fees, they also scan every check I cash as a pdf so I can view it online and charge me no fees if I write a check that I cannot cover with the funds in my checking account, but can cover from the funds in my savings account. They have very few atms, but they also have free coffee at all their branches and the staff are friendly, so its kind of worth it! The only thing I don;t like is that they insist on holding out of state checks for five days. I don’t know if this is normal or not.
December 13th, 2008 at 5:25 pm
I’ve been in banking ever since high school so it’s hard for me to be able to look at a bank from the outside in. What I can say is that I’ve worked in both big and small banks and I prefer working for a smaller bank.
I currently work for a small community bank that has about 100 employees and I speak directly with the President, CFO and various VPs often. Everyone is very open and available to our coworkers and customers.
The other thing I like is if people apply for a loan with me, I do my own underwriting, not a separate department in another state or country, me - the guy who knows your situation. And if I do need to go up in the ranks to get an approval, I walk down the hall.
I imagine that many of the things I consider to be perks in my job are also perks in the eyes of our customers.
December 13th, 2008 at 11:34 pm
I’m a very satisfied credit union customer (Stanford Federal Credit Union) and have no plans to open future accounts with commercial banks. With my credit union, I have lower fees, high interest on savings and checking accounts, and customer service representatives that answer the phone.
As for the criticism that credit unions don’t have enough ATMs, my credit union is a member of the Co-Op network, as are many credit unions. I can use other credit union ATMs (even make deposits) and many other ATMs in the neighborhood (7-Elevens, etc.) without fees.
With banks like Citigroup and Bank of America taking tax-payer money and then laying off tens of thousand of tax-payers, why would anyone want to give them future business?
December 14th, 2008 at 6:43 am
The big banks are horrible! I made the change to a local bank and I would never go back.
December 14th, 2008 at 6:47 am
I banked with Bank of Boston, which then was bought by Fleet, which then was bought by Bank of America. Didn’t like it, but stuck with it until the day I went to my local branch and they didn’t have any quarters. I figured if I were paying some extra fees per month and had worse service, they should at least have quarters. Not so much.
Now I bank with Wainwright, a fun lefty-hippie bank here in the Boston area that does a lot for non-profits, low-income loans, lgbt issues, and the environment, with competitive rates. Having the SUM network also helps a lot.
December 14th, 2008 at 10:14 am
My credit union charges me something like eight bucks a month IF I don’t have a total balance from all accounts of $250 or greater. This is not unreasonable, of course. I recently had a small windfall and although I had intended to keep it all as an emergency fund, I need some other things a bit too much to put them off (vet visit for my cat, for instance), so I put $245 in the savings account (technically share account) to put it up to $250 and I won’t have to pay that fee again. They weren’t charging it regularly anyway; I suspect they go by your highest balance in the month rather than continuous balance.
They do hold checks a few days but not the ten days the first commenter was talking about. I’m sure your readers already know this and I’m sure she checked everything in her community but it’s important to remember that credit unions do not all have the exact same policies. The one complaint I have about mine and deposits is that if I do an ATM deposit of cash at night, they count it as a check deposit for some reason, even though I know they can tell it’s cash when they open the envelope. So I have taken to doing night deposits at the night deposit drawer, for which they have printed envelopes for the purpose. Risky, but so far I’ve had no problems.
It’s really tough to find local banks. The last time I used one was in my parents’ Louisiana hometown. It’s a small farming town just now suffering encroachment from chains and national companies. Recently a new bank has moved into town to be competition with the hometown bank. I’m not very happy about that but what can you do.
BTW, there are community activist credit unions as well, some on par with banks like Shorebank. One that I know of is active in the South, working on poverty issues. Hope Credit Union, I think it’s called? They do accept people who live outside the region as customers and members. Every little bit helps.
December 14th, 2008 at 11:01 am
I’m only 19 when I first opened my bank account I did so at Bank of America. They have great features. But, I recently started working for a local bank in New Jersey. I noticed that customer service is much better at local banks, and the local bank that i worked with was not affected by the crisis whatsoever. Despite the stocks falling, our stocks still rose. Many local banks didn’t give out these bad mortgages and are very low risk. If you live in Hudson, Bergen, or Passaic counties in New Jersey Oritani Bank is an excellent bank.
December 14th, 2008 at 4:56 pm
I used to try to stay with local banks, but they were constantly being bought up by national conglomerates, which trashed the customer service and gouged customers with all sorts of charges. I will not pay for the privilege of using my own money, especially when the bank is taking my money, investing it, and making a profit on it.
Finally I went with a credit union and have been very satisfied.
The state employees’ credit union here has a human being answer the phone; tellers and managers recognize me when I walk in my local branch; it has an excellent online system that I can access without having to use my social security number (!!) as a password; and it has no minimum balance requirement.
I’ve never had the experience of having the CU “hold” a deposit for ten days or two weeks before I could get at it. If that happened, I would be out the door so fast they wouldn’t see me for the dust rising.
December 15th, 2008 at 7:27 am
The second line of thought that I had was the idea of supporting a local bank as a way of supporting my local economy. I bank with Chase and honestly, they have been a great bank. Almost no fees, great offers, never any problems of any kind. But I started to think about what if there was a bank that employed people that live down the street from me, that I could give my business and in that way, directly help the area in which I live. I really like the idea of a community development bank that J.D. mentioned, but unfortunately, after some checking, there doesn’t seem to be any locally. There are, however, a number of credit unions and community banks, and I think I’m going to look into using them. I realize that I might be trading into a few more fees, or maybe a little more pain with checks clearing, but maybe it is worth it for the peace of mind in knowing that I’m supporting the locally economy a little better.
Anyway, thanks again for all the great comments.
December 15th, 2008 at 2:56 pm
Great post. I’d say community banks are not only better but they are bailing out big bank customers! Earning 4-7% through reward checking is pretty sweet.
Checking Finder (https://www.checkingfinder.com/) A handy tool to find a good percentage reward checking bank in your area. Just type in your zip.
December 16th, 2008 at 9:20 am
I use a local credit union for my main checking and short term savings. Long term savings are at ING for the interest.
Cons:
Few locations and none outside my area, but I rarely use cash or go to the actual bank. There’s also one on the way to my work.
Pros:
Free checking
$5 minimum on savings
Free overdraft from savings or line of credit (unlimited I believe)
Good rates on auto loans and mortgages with discounts for customers who use a number of services
Free online bill pay
Free transfers to other people’s accounts within the Credit union (to my fiancee’s account)
Never been charged an unexpected fee. Was charged for transferring to fiancee’s non CU account ($3), but was informed of the fee and asked to confirm acceptance of it.
In conclusion, the few locations doesn’t really affect me much and I get a bank that doesn’t screw me over at every turn.
December 16th, 2008 at 4:08 pm
After having seen bad practices with one Washington metro area bank, I switched to the local credit union. The experience is much improved and so far they have saved me a ton of money with their hands on customer service. They call me and make sure they are saving me as much as possible. I would say that local credit unions are the way to go