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Are you looking for a financial institution that can give you a run for your cash? Don’t think ‘big banks’ right away. Often, it’s these types of banks that give you a headache and make you turn to an online therapist for help. Yes, the big banks may have powerful visibility in your area, but the local banks are popular for offering competitive rates on your deposits and loans. They’re even well-known for providing high-quality customer service compared to the national banks. However, the former may have certain limitations that perhaps you can (or cannot) do away with.

Below are some of the pros and cons of choosing a community bank over a national bank.

The Pros

  • More Versatile Creditors. Because the big banks have a wider scope, they usually have stricter credit guidelines that often make it more difficult for clients with not very awesome bank standing or those with lower incomes. Community banks, however, can create their own guidelines, which mostly benefit their clients.

Additionally, in communities, people know people, which make it easier for the bank to recognize their clients and approve of their loans since they need only a little investigation to know more about them. It is also the reason why they set less stern guidelines.

  • Attainable Rates And Lower Charges. A community bank is preferable especially for families who are building their future. They offer much lower interest charges and better rates on loans and savings accounts, so you are encouraged to hand in your cash for safe-keeping. A previous Banking Landscape Report stated that national banks had an average monthly charge of approximately$15 while community banks only charged a little over $5.
  • Higher U.S. Visibility. There are community banks everywhere! The Independent Community Bankers Of America, for instance, have over 6,000 branches. It is almost impossible not to find community banks in your area. In fact, a study established evidence that out of the 3,000 plus countries in America, there is one in five that is represented by a community bank. 
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  • Far Better Customer Service. Some national banks see you only as an account or check number. Why not switch to a community bank now if you feel like trash in a bigger bank? Customer service is one of the factors that show a huge difference between a local and a national bank. In community banks, employees starting from the top down are committed to building great working relationships with their clients put great focus on improving their customer service. ‘More emphasis on the customer, lesser on the income’ is what they are taught.

 

The Cons

  • Less Cash On Hand. Community banks do provide better service and offer easier loan approvals, but they frequently have small cash reserves for their clients because, yes, they are smaller than the national banks. So don’t expect always to be accommodated, especially if you plan to apply for a large home loan. It will depend on how much and when you will need it.
  • Limited Access. You may see some community bank branches, but access to both a bank and an ATM is not always possible particularly if you’re far away from your neighborhood. You might have to use a machine from another bank and pay its corresponding charges if you have to. If you’re into traveling across the country or the world, then a community bank is not a great option. 
  • Less Updated Technology. This may not apply to all community banks, though, as some local banks strive to update their system even if it means paying extra for better service. But most local banks still don’t have features like mobile transfers, deposits, and bill payments. And if there are, you might encounter some malfunctions or applications that are not very user-friendly. Generally speaking, community banks are not as fast in adapting to new technology.
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  • Lesser Bank Products. Because local banks are smaller, they might also offer fewer products such as auto and home loans, retirement plans, and mortgage. They may only offer what’s more important for the particular community that they’re in, for instance, retirement plans for a predominantly senior community.

 What Should It Be?

Essentially, the decision of whether to choose a community bank or not will depend on your wants and needs. If you’re not in a hurry to build a future and want to take it step by step, a community bank is a perfect fit. But if you’re into fast and modern banking and you do frequent travels, then the national bank is your best bet. It’s really up to you.

 

 

 

 

 

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