While no one would ever recommend keeping your life savings in shoe boxes under the bed, it’s also tough to recommend any of the major banks. If you take the time to look through your monthly statements, you’ll see that an inordinate amount of your money is taken from you in the shape of fees and penalties.
It’s all the more irritating when you read about the massive profit margins that the big banks are pulling in each and every year. This is why community banks and credit unions are rising in popularity all across the country.
Let’s look at 5 reasons why you should consider going small in the banking world:
1. Lower fees
We are not going to tell you that there are no fees charged by community banks, but what we can tell you is that they are a good deal less than what you would expect to pay at your mega bank. Generally speaking, the local banks also tend to offer better interest rates on any loans or credit cards that they issue to their customers.
2. Boost your local economy
Those of you who keep track of the stat of the economy know that it largely depends on how well local businesses are doing. Community banks are well aware of this, which is why they tend to go out of their way to help local businesses thrive financially. When the small businesses in your community are thriving, it tends to follow that the local economy does the same.
3. Decisions made locally
When big banks make important financial decisions, they tend to do so with the health of their national, or sometimes global, business in mind. They are less concerned about what happens at the local level. Community banks deal with their customers face to face, and thus know exactly what needs to be done to help the community grow. When they make decisions, they think about the impact to their customers.
4. No gambling with your money
In order to increase the amount of money that they rake in, big banks will take the money that their customers deposit and use it to invest in ventures that involve some level of risk. Your money is, of course, insured and safe, but you really don’t get to see any benefits from that type of financial dabbling. Smaller banks take the majority of their money and invest it back into the community in the form of loans and investments that actually benefit their customers and the communities they live in.
There is a common misconception that your money is somehow safer because you are putting it in the hands of a large company that you know by name. The fact of the matter is that it is just as safe with the smaller banks, and you will likely have a little more money in your pocket at the end of each month. That is why you should consider making the switch.