It's assumed that in order for small banks to compete against bigger banks they among other things have to: -provide better services. -charge lower fees for their services and so on. Most people though, prefer bigger banks because they believe their money is safer there. I'm yet to confirm whether smaller banks are better in all ways but I'd like to hear from you guys. Is it really true that smaller banks are much better than huge banks?
My experience is that smaller banks are better. For one thing, the regional bank I am with now has far superior customer service to Band of America, which I left as soon as I was able. My parents set me up with Bank of America when I left for college, so I didn't really have a choice until I graduated and got a job, but B of A really had the worst customer service. Even though I came in to do business like an adult, they always treated me like a child who has no clue what they are doing, even though I totally knew what I was doing. I really didn't like that. I also prefer how regional banks invest in your local area, so your money isn't just going into some pool all over the country. Local focus is a big thing to me because there is more accountability that way.
In my experience and from where I'm coming from, smaller banks offer higher interest rates on savings account. Also, smaller banks tend to be more lax when it comes to loan approvals and require less documents. However, my concern regarding smaller banks is stability as there's always a risk that it will close down sooner or later if not managed well. Big banks on the other hand have been in business for 40, 50 to 100 years so I feel my money is more secured with them. So it's small banks for me when it comes to short term savings and loan needs while for long-term investments - I go for bigger banks.
I prefer smaller banks over bug banks because they generally have less stock traders or other investors to please.
I think smaller is better. I much prefer credit unions over banks. If I had to go with a bank, I would choose a small local bank as local as it's a member of the FDIC. Your money up to $250,000 is protected no matter the size of the bank.
I find that the smaller banks are offering better services than the bigger banks in general. Their queues are shorter than the bigger banks. The tellers and operator of the smaller banks usually are more friendly and helpful. Moreover, their expenses and charges are comparative lower than with the bigger banks in general.
From my experience smaller banks provide better interest rates/customer support however they really lack the range of products and convenience (Such as widespread access of ATMs).
There are advantage and disadvantages on small and big banks. In small banks you have genuine personal attention and a stronger connection between bank worker and customer. In the smaller bank setting, you will be able to get assistance with loans. Smaller banks are apt to work with their customers especially in cases with overdrawn accounts, account mistakes, etc. They can become too reliant on unstable wholesale funds and lend too much at too high a risk. And they can be corrupt and fraudulent. Small banks are not “safer” than big ones. They are more likely to fail, not less. Of course, unlike large banks, individual small banks can fail without putting the system at risk if there is an effective resolution authority such as the US’s FDIC. It doesn’t really matter what size banks are.What matters is systemic stability and customer service, and both of these can be put at risk by bad behavior from banks of any size.
It's on a case to case basis, really. I've heard of people investing their money in small banks which ended up closing anyway. However, something similar happened to certain big banks. Perhaps looking into a bank's history as well as its latest performance would help a lot. I'd personally choose a bank that's not too big or too small. Just somewhere in the middle.
I think smaller banks sell themselves mainly on quality of service while bigger banks will be more on the scope of their products. So really it depends on how you define "better". For some things, I would certainly want to have the best quality of service, but equally a more diverse suite of products gives you options and very possibly cheaper pricing.
This is a very good question, Denis! Had you asked me a few years ago, I would probably have said I prefer the bigger banks. I have found over the years that smaller is better, in terms of banks. They're still very eager to please and actually show that they care for the customer. The bigger banks, which have been around forever seem to have become complacent and take their customers for granted, in my honest opinion!
This is a fairly good comparison. I work in a big bank but I will say that small banks give a better service since there is some sort of intimacy between the client and the bank. However, when it comes to stability, it is scary to put big money in small banks because they can close shop just like that. There were instances here when owners of small banks ran off with the money of the depositors.
I agree, recently my sister was sort of shopping for a loan and I was tagging along for support. I can't help compare the employees of the big banks and small banks that we've been too and, surprisingly, employees of small banks are more professional to deal with. You can negotiate with them easily unlike with bigger banks where they have to follow long-time bank policies and practices, smaller banks are more flexible and open to hearing and actually finding ways to accommodate a client.
To be honest with you, I don't really think smaller banks are better than big banks. I've banked with both before and they have positives and negatives. I bank with a larger, well known bank now and I'm quite happy with it. Good customer service, easy access to capital, great online system, longer bank hours. Few fees. Cant beat it.
In terms of which is better - having banked with both large and small over the years - I can't honestly say that I've found there to be much difference between the two - other than that larger banks tend to have better coverage with multiple branches and more ATM machines. In fact for me - what really makes one bank better and stand out more than another - is not the size of the bank - but more importantly what kind of service I get - closely followed by few to no fees.
I think smaller banks are better. Number one is the customer service. Though you feel like any bank you go to has local controls and friendly service, the big national banks outsource their customer service and there you are just a number again. I recently had a bad experience with a big bank. I filled out a form online and it all went wrong then when I called I got a kid who could do absolutely nothing for me. I went to the branch and they also said "It's national policy". Didn't take long for my anger to build and my account to be closed. From now on I will use a little local bank that understands I am a human being and need to be treated as such.
