It’s a seemingly age-old question: Should you bank with a national bank that offers all of the newest bells and whistles in banking? Or do you bank with a local bank that offers simpler services but is rooted in your community?
It’s a hard question to answer. If you travel often, it can be tempting to open an account with a bank that you can find in other localities across the country. But being able to walk into a bank where someone know your name comes with its own set of benefits.
Here are a few reasons you should consider banking locally:
In the 2000s, large banks began buying up smaller banks, forming new megabanks that were larger than any ever before seen. When the recession hit in 2008, people questioned the ethics of how these megabanks were run and regulated. Since then, large banks have been on the hook for other scandals, such as Wells Fargo for creating fake accounts in their customers’ names.
It’s not that megabanks are bad in and of themselves, but they certainly don’t have a community to support and be held accountable to. As Bankbound.com explains, “All four of the top megabanks–Wells Fargo, Citibank, Chase, and Bank of America–routinely make the list of worst companies in America.” Local banks, rather, serve a smaller customer base and depend on strong customer service to remain successful in their communities.
A couple of decades ago, large banks offered online banking well before small banks were able to adopt the technology. However, in the past several years, things are leveling out to the point that smaller banks can offer just as many services as large banks, such as online and mobile banking, but with a personal touch. In a way, these technological developments allow customers to have the convenience of viewing their accounts online but also have the opportunity for more personalized care from their local bank and its staff.
Some online-only banks such as Ally and Simple have very little overhead because they conduct their business entirely online or over the phone. Because of that, they can offer high interest rates for your savings accounts and low fees. However, you’ll never be able to walk into a branch to have staff help you with more complicated banking questions or issues.
Megabanks, on the other hand, have very high overhead costs. They often charge you if you do not keep a minimum balance in your account and offer low interest rates for your savings. They also make money off of extra fees like overdraft charges. In fact, several megabanks have reported making nearly $2 billion a year in overdraft charges.
Local banks are the happy medium in this scenario. They have some overhead costs because they have a few local branches and hire staff to run them, but because the overhead is not exorbitant, they are able to offer low checking account fees and great interest rates for savings.
Helping Local Economy
Because local banks do hire staff to run their bank branches, when you bank local, you are supporting your local economy. In addition, the investment that these banks do often remains local, supporting the new coffee shop in town or even community centers. For example, we worked with the Alleghany Highlands YMCA to provide a loan to construct a new facility in 2007. Because we were able to partner with them, members of our community have a wonderful place to stay fit and participate in community events right in town.
Banking You Can Trust
Highlands Community Bank is committed to serving our customers with the highest customer service. If you have a question or concern about your business or personal finances, we’re happy to help.