Community Banks & Credit Unions: The Benefits of Banking Locally

We break down 5 reasons why trusting your money with a community bank or credit union over the "big banks" might benefit you (and your whole community too).


We are often asked why we choose to work primarily with local community banks and credit unions rather than larger chains. We think one of the main reasons that people find our focus confusing is because they don’t really think about their bank as a business and member of the community. We’ve become so distanced from banks as financial pillars of society that we just see them as places that hold our money.


We could go on and on about why we like to work with these clients. But we think the confusion comes more from people wondering why anyone would choose the smaller guys over the larger ones.


Here, we’ll look at 5 reasons why you may want to choose a community bank over a national one:


#1 - Local Banks are Part of the Community

We like local businesses. They are a crucial part of regional economies… but more importantly, they are our friends, family, and neighbors. So, a local business isn’t just local. A local business can be an institution.


This is even more true for local banks and credit unions that readily invest money in their communities by lending to other businesses and individuals so that they can do the things they want to do.


But, since they are local, these banks provide support for the community beyond simple economics. Local businesses typically invest more in the community, supporting local schools, donating to regional events and organizations, and sponsoring members of the community for charity or fundraising events.


#2 - Using a Local Bank Supports Local Business

When you're keeping your money in a community bank, you are supporting an institution rooted in the community you live in. Sometimes we don’t think of banks as businesses, but banks (national and local) are in the business of making money to support themselves. The difference is that the money made in a local bank stays in the community.


That means that they hire local and they keep money in the community. Rather than supporting a chain that holds profits for stockholders on a national or global level, you can support a business that keeps money in your community and provides employment & support for those who live there.


#3 - You Don’t Lose Anything Switching from a National Chain

Unfortunately, it used to be the case (or at least that was the stereotype) that smaller local banks were behind the times when it came to the more advanced technologies and services that larger banks offer. Since we’ve been in the industry, we’ve heard this one more than once. But perks like online banking and mobile check deposits aren’t just for large banks anymore and are available most anywhere.


In fact, in terms of security, insurance, and technology, there isn’t a huge gap between local banks and national chains. Most anything you would get from a big bank, you’ll get from a local one.


#4 - Local Banks Have Local Decision-Makers

On a more practical note, when your money is in a local bank or credit union, you know that decisions made regarding issues that could affect your money are made by individuals in your community, not at a major headquarters located halfway across the country.


More importantly, these decision-makers are also part of your community. They will be less likely to take risks with customer money, and more likely to define their company’s success based on the success of their members.

Because local banks have less incentive to maximize profits on a regional or national scale, and because they are more firmly rooted in the community, they can often lend money to individuals who couldn’t get loans from major national bank chains.


#5 - You Get Personalized, Community-Oriented Service

Local banks are more like neighbors than businesses in many ways. When you enter a local bank, it’s more likely that you are going to find people there who have worked there for years and most likely live in your community too.


We’ve become so used to assuming that the person behind a service counter is just another person we run into throughout the day. But just imagine if we broke away from that model, and instead of seeing our bank experience as simply transactional, we saw it as a place where we felt welcome and supported.


That means that they know you, and you know them. That means that not only are you receiving friendly, supportive service but you are also getting it from someone who cares and who knows who you are in the community. That feeling carries much further than your interactions with a teller.


Putting your money in a local community bank is an investment in your community.

You support local jobs, you support local investment, and you support an institution that will know who you are and care about where you are going.


These aspects of banking are important because they show how members of a community can come together in a professional capacity to take care of one another.


Share this with a friend who you think might be ready to make the switch from a big bank to a community bank or credit union.