Kip Tips
How to Find a Local Bank
Resources for finding a local bank you can count on.
By Robert Long, Managing Editor, Kiplinger.com
April 8, 2010
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My local bank recently got acquired, and it's already starting to act like a big bank even before they change the letterhead or the signage outside each branch. I just suffered through a week-long customer-service nightmare filled with egregious bank errors (accidentally closing down my wife's debit card), contradictory statements made by different representatives, failure to deliver (still!) a replacement card promised within 3-5 business days, proposed fees for actions necessary to resolve the bank's own errors, and a general unwillingness by any of a half-dozen representative and managers to pursue solutions on our behalf.
My search for a new bank -- specifically, a local bank -- started last night. And I know that many of you, dear readers, are searching for a new local bank, too, whether it be for more personal customer service or better rates and lower fees, or because you're motivated in some way by too-big-to-fail banks' role in this country's severe economic downturn. (Read our August 2009 article Banks That Put You First for a sampling of the special deals and better terms that consumers are discovering as they switch to local banks and credit unions.)
The challenge, you'll find, is establishing a list of truly local banks to compare – and then researching each bank to make sure it’s on solid financial ground. Skip your local Chamber of Commerce's site. That's where I started -- but quickly discovered the list of member banks to be neither comprehensive nor exclusive of big banks. Here’s where you want to go:
To Build an Initial List of Local Banks to Compare
Visit the Independent Community Bankers of America’s site, where you can search for local banks. My search generated more than a dozen local banks, several of which I’ve never even heard of.
You also might want to search for local credit unions via the Credit Union National Association.
To Evaluate the Financial Stability of Local Banks
Start with the Federal Deposit Insurance Corp.’s Bank Find tool to determine whether your deposits at a particular bank will be FDIC-insured.
Then, look to BankRate.com's Safe & Sound rating system to see ratings of individual banks’ financial strength. Go beyond the one- to five-star rating system, and dive into BankRate's accompanying memo about each bank for hard numbers and further insights into the overall score.
Another option: You may have heard about the Move Your Money campaign, launched by Arianna Huffington and others. The campaign’s site lets you search for local banks scoring a “B” or higher in the ratings by an outfit called Institutional Risk Analytics.
To Compare Rates
Comparing banks' rates and fees on the various types of accounts and loans you have is the easy part, via quick trips to the Rates pages on individual banks' websites.
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Reader Comments (5)
Posted by: Sharon at 04/09/2010 10:36:33 PM
About 20 years ago the bank that we chose was local and we were very satisfied with it. Then came the time when banks decided they wanted to be superbanks. In one 3 year period our bank had changed names at least 5 times. Often we would no more get the new checks and the name would once again be changed. We noticed with each change the fees charged got larger and interest paid on our account less. Also the home town feel of concern for our accounts was no longer there. So we changed our accounts to the Army Credit Union and we've been living happily ever after with them.
Posted by: bankalchemist at 04/12/2010 02:10:41 PM
if your financial well being, business or profession is dependent on your "local" market then you need to bank locally. Nine of every ten dollars a community bank makes stays in the community with One dollar being used for outside cost as with a large bank only $3 dollars stays in the community and $7 dollars goes up to the main office for its overhead and use in other markets. Meet with a local banker and find out what they expect from a customer so you are able to decide if you fit their model. A good resource is www.denovobanks.com or www.nubank.com to learn about community banks...
Posted by: CU Advocate at 04/13/2010 09:32:12 AM
Join the National Move Your Money Event here at bit.ly/NatMYMevent virtual campaign online to vote with your feet! Links to both Banks and Credit Unions are there!
Posted by: Nomen at 04/13/2010 09:44:02 AM
Twenty years ago there were three banks in my small town. After years of continual economic decline, today there are nine and two credit unions ? It seems that every small bank in the area thinks it needs at least four or more branch banks in the surrounding towns. There can't be that much new business and the building overhead along with additional employees must be killing them. We also have multiple ATM machines every few blocks. Service and savings rates are lousy and mistakes are pandemic. While I dislike large banks, my small local banks aren't so great either. It's no wonder that ALL the banks are in trouble. Branch banking should be outlawed.
Posted by: CU Advocate at 04/13/2010 09:45:24 AM
"You also might want to search for local credit unions via the Credit Union National Association" That's it? I guess we find out more by searching your site? What would incline anyone who does not know of a credit union to continue to search your site or the site you linked? Bank = banking, that is a for profit financial institution, where YOU = Customer *** Credit Union = banking, that is a NOT for profit financial institution, where YOU = OWNER.