Many consumers work with larger banks to provide them with plenty of service options, in addition to useful perks like a self-service coin counter or online banking solutions. However, more individuals are looking to smaller banks and credit unions that can provide them with a range of solutions when it comes to managing their finances. With plenty of people looking for the right tools to save and access their funds, they often debate the pros and cons of their current banks.
CFA notes advantages of local banks
The Consumer Federation of America recently released a report that detailed the benefits consumers see when they make the switch to small, local banks. The study found withdrawal fees for a relatively low number of transfers were fairly common among the largest financial institutions. Dormancy fees, while not typical, were sometimes charged after as little as six months with no activity on an account.
Overall, the group found larger institutions were more likely to require high minimum balances for savings accounts and charge higher fees when balances dropped below the minimum. Fifty-two percent of big banks required minimum balances of at least $300. This could be a significant problem for many consumers, especially with plenty of individuals still out of work or making significantly less than they did before the recession.
However, the CFA did note that the nation's largest financial institutions are more likely to offer features that encourage people to save more. Options like automatic transfers to savings accounts and cash bonuses or higher interest rates for those who authorized these options earned praise from the group. Bigger banks were also more likely to disclose fees and interest rates on their websites, allowing consumers to make the most informed choices possible.
Getting ahead to better serve customers
While smaller banks and credit unions may not have access to all the latest technology bigger financial institutions do, it's important they realize the significance of investing in the future and providing account holders with all the options they desire. By implementing new advancements like a self-service coin counting machine or the ability for business clients to use remote deposit capture technology, a smaller financial institution can keep up with major industry players in regard to services available. Yet they can still offer the personal touch consumers associate with and expect from a local bank.
July 10, 2013