Top 5 Reasons to Choose a Community Bank or Credit Union*

1. Get the Same Services at Lower Cost

Most locally owned banks and credit unions offer the same array of services, from online bill paying to debit and credit cards, at much lower cost than big banks. Average fees at small banks and credit unions are substantially lower than at big banks, according to national data. Studies show that small financial institutions also offer, on average, better interest rates on savings and better terms on credit cards and other loans.

2. Put Your Money to Work Growing Your Local Economy

Small businesses, which create the majority of new jobs, depend heavily on small, local banks for financing. Although small and mid-sized banks control less than one-quarter of all bank assets, they account for more than half of all small business lending. Big banks, meanwhile, allocate relatively little of their resources to small businesses. The largest 20 banks, which now control 57 percent of all bank assets, devote only 18 percent of their commercial loan portfolios to small business.

3. Keep Decision-Making Local

At local banks and credit unions, loan approvals and other key decisions are made locally by people who live in the community, have face-to-face relationships with their customers, and understand local needs. Because of this personal knowledge, local financial institutions are often able to approve small business and other loans that big banks would reject. In the case of credit unions, control ultimately rests with the customers, who are also member-owners.

4. Back Institutions that Share a Commitment to Your Community

The fortunes of local banks and credit unions are intimately tied to the fortunes of their local communities. The more the community prospers, the more the local bank benefits. This is why many local banks and credit unions are involved in their communities. Big banks, in contrast, are not tethered to the places where they operate. Indeed, they often use a community's deposits to make investments in other regions or on Wall Street.

5. Support Productive Investment, Not Gambling

The primary activity of almost all small banks and credit unions is to turn deposits into loans and other productive investments. Meanwhile, big banks devote a sizeable share of their resources to speculative trading and other Wall Street bets that may generate big profits for the bank, but provide little economic or social value for the rest of us and can put the entire financial system at risk if they go bad.

 

Seven Simple Steps to Move Your Checking Account*

1. Open Your New Account

In most cases, you should be able open a checking account with an initial deposit of $25 to $100. At a credit union, you’ll also become a member and co-owner at the same time.

2. Order New Checks and an ATM/Debit Card

These typically arrive within 1 to 2 weeks. You should also consider applying for a credit card from your new local bank or credit union at the same time.

3. Ask Your Employer to Reroute Your Direct Deposit

When you open your new account, ask the bank or credit union for a direct deposit authorization form that includes your new account information. Give this form to your employer and anyone else who makes direct deposits to your account. It may take one or more pay cycles for the change to be made, so keep your old checking account open and watch for the switch.

4. Contact Companies that Direct-Debit Your Account

Using your last bank statement, make a list of any businesses that you’ve authorized to directly debit your account. Ask your new bank or credit union for an automatic payments authorization form that includes your new account information. Send this to the businesses on your list.

5. Set-up Online Bill Paying for Your New Account

If you like to pay bills online, set up bill payment information for your new account. Also, stop any automatic, recurring payments you have established through your old account.

6. Close Your Old Account

Once you have started receiving direct deposits into your new account and are sure that there are no outstanding checks or automatic debits that need to clear, close your old account. Warning: do not just withdraw the last dollar and assume the account will fade away on its own. Your old big bank may start charging you fees for having an empty or inactive checking account. Instead, follow the bank’s procedure for closing out the account.

7. Enjoy your new local banking relationship!

 

* Resources provided by the New Rules Project's Community Banking Initiative.

More resources:

• Visit moveyourmoneyproject.org and newrules.org for more information regarding why moving your money is important to the community (and, ultimately, beneficial to you).
  
  
• Click here to access a convenient "switch kit", provided by BVCU, that will allow you to effortlessly transfer your funds, assets, mortgages, and other loans to a local and independent entity.
  
  
• To download our 6/6/10 Slideshow click here.
  
  
• Find a Credit Union