- Pay less for the same products and services.
Community banks offer most of the same services that are available at big banks. The services that most of us use; checking accounts, savings or money market accounts, debit cards, online banking, credit cards, etc. are usually less expensive because community banks generally have less overhead expense than the big banks.
- Get better interest rates.
If you compare interest rates paid on deposits, you usually will receive higher rates on your deposits through a locally owned bank than what is offered by the large banks. Loan rates that community banks charge are also usually lower than those of big banks.
- Banking based on relationships.
All decisions in a community bank are made by local people who personally know their customers and live in the community. Community bankers make decisions based on people, not statistics. You can sit down, face to face, with the person handling your account. This personal knowledge often enables a hometown bank to make a loan that a large bank would not approve. Big banks approve less than 9% of small business loan applications compared with a 45.5% approval rate from community banks.
- Your money provides capital for local economic growth.
Community banks have a vested interest in helping the local economy thrive. A growing local economy generates more deposits and loan opportunities for the community bank. This money is reinvested in the local economy. The big banks are competing for these same deposits, but your deposits often end up funding out of state loans and investments. The 5 largest U.S. banks hold 40% of all deposits in this country. Yet, these same banks only make 16% of small business loans in America.
- Banking, not gambling.
The primary purpose of hometown banks is to turn deposits into loans. Community banks earn most of their profits on the difference in interest between loans and deposits. Big banks often derive a significant portion of their profits from fees, speculative trading, derivatives, hedging activities, and foreign investments. Community banks bet on the success of the local community, whereas big banks often devote resources to speculative investments.
- Successful community banks have to be good citizens.
Community banks, unlike credit unions, pay taxes just like the rest of us. Hometown banks support the entire community, not just their members. Community bankers are personally involved in activities that benefit the community, not just because it helps the bank, but because community involvement strengthens their own neighborhoods.
All banks advertise great local service, but only your community bank backs that up by being fully invested in your local community.