Right after the Wall Street crisis, I began examining the importance of my banking choice. Large banks, “that were too large to fail,” looked bad needing stimulus money to survive. On the other side, of the coin, was the countless small banks that were closing. Was my bank safe? Should I consider going elsewhere?
What I should have been asking myself is, “What are the advantages and perks that various banks offer?” This article examines the advantages and disadvantages of small versus large banks.
If you travel a lot across the country, large banks are for you. You are usually close to one. A good example is Bank of America. They have banks and ATMs located all over. You can easily have your checking, savings, mortgage, loans and even credit cards under one roof. It also makes your paperwork either simple or non-existent. After the last bailout, they have a better chance of government assistance than a smaller bank.
If you have a good secure reputation, you can usually find a better deal on car loans, interest rates and lower fees. Small banks are in competition for customers. They will go out of their way to accommodate a person within their means. Smaller banks might also offer small perks. Small banks will also do more for the community they exist in. They do charity events. Their employees do more in the community as well. Employees in smaller banks are considered more family than just an employee.
There are advantages and disadvantages to both. You have to weigh what is right for you. A small bank that I use is The Bank of Edwardsville. It is located in Edwardsville, Illinois. Like many other banks, you can do on line banking with them. They try to offer many of the perks a large bank does, but on a smaller scale. They have satellite banks throughout Southwestern Illinois. They work on the idea that most individuals will do their work, travel and shopping locally. Each of their satellite banks try to contribute to the community they are located in.
Although they are beneficial, they can also be costly. Some will charge fees up $5 for taking out money. You could be charged a fee from both banks, yours and the one the ATM belongs to. If you have small amounts that you want to take out, it can be very costly over time. My advice, “Be wise with withdrawing.”
Whichever bank you choose, you are insured up to $250,000 with FDIC. It was extended from $150,000 after the Wall Street melt down. This is mandatory for all banks.