Reasons to Put Your Money in a Community bank or Credit Union (over a big bank)

Author:     Friday, September 12, 2014 12:00 AM

There are a lot of options these days for where to put your money. While you can always keep it under a mattress or in a hole in your backyard, conventional wisdom says you should store it in a bank of some kind, as there will be more security and you can even make money off your money while it just sits there. The big banks have numerous branches and ATMs located all around the country, but there are also smaller community banks out there that offer a number of benefits that these bigger banks don’t. While you may have heard more about the big banks thanks to their advertising and marketing machines, here are a few reasons community banks and credit unions might be better places for your money.


Grow Your Local Economy


Big banks invest in major markets around the world and put your money to work in ways that will usually never benefit you directly. Smaller community banks and credit unions on the other hand, give more loans to smaller businesses in your local community. Even though they account for less than one quarter of all bank assets, they account for more than half of all small business lending. In short, your investment in small banks through setting up an account with them is an investment in the businesses around you.


Have a Great Bank, But At A Lower Cost


Big banks will charge a fee for keeping your money in them and providing services, like online checking, ATM use and credit card use. Small banks will still charge a fee, but a much lower one according to national data. Obviously, you should check to see what this annual or monthly fee may be and shop around, but you’ll usually save at least twenty dollars or more in fees by going with one of these smaller banks or credit unions. In other words, you are just saving your own money by going to a community bank or a credit union. Everyone likes to do that.


Get More for Your Money


Interest is made on the money you keep in any bank, though those percentages will vary based on how much money you have in that bank at any given time. If you have more than ten thousand dollars in most cases, where your money is being kept and what the interest rate is can be the difference between hundreds if not thousands of dollars you can earn. Big banks will never provide you with that, but small community banks and credit unions in particular will yield much higher interest rates. Meaning your money will make even more money by just sitting there.

Source: BFI