What are the benefits of banking with a community bank?
Paying Fewer Fees
While community banks also charge fees, they generally cost less than larger institutions. According to Bankrate, you might also get higher interest rates on savings accounts and other investments if your business banks with a community institution.
Paying Fewer Fees
While community banks also charge fees, they generally cost less than larger institutions. According to Bankrate, you might also get higher interest rates on savings accounts and other investments if your business banks with a community institution.
What sets community banks apart. Local Focus: Unlike larger banks that may take deposits in one state and lend in others, community banks channel their loans to the neighborhoods where their depositors live and work, which helps local businesses and communities thrive.
A community bank is a depository or lending institution that primarily serves businesses and individuals in a small geographic area. Community banks tend to emphasize personal relationships with their customers.
One of the best ways to keep your money safe is to deposit it with a local community bank. Chances are that you know the primary benefits of working with a local bank over a large national chain. They typically come with lower fees, higher savings interest rates, and a more welcoming atmosphere.
- Relationship-Based Banking. ...
- Decisions with the Community in Mind. ...
- Faster Decisions. ...
- Local Networking. ...
- Collaborative Lending. ...
- Personalized Attention. ...
- Full List of Services. ...
- Lower Fees.
Community banks play a vital role in the functioning of the U.S. financial system and the broader economy, from lending to small business owners and farmers to providing critical banking services in small towns and rural communities across the nation.
Understanding Community Banks
Community banks tend to be more likely to be privately owned and locally controlled, unlike larger publicly traded banks owned by stockholders.
Community banks offer many advantages for small businesses: Local Decision Making: Community banks and credit unions use their intimate knowledge of the area to make loan decisions. Their insight into local market conditions can lead to approval of small business loans that a national bank may not value.
Community banks are particularly vulnerable to loan losses due to their size relative to capital held. Already this year, Deutsche Bank, Aozora Bank, and other publicly traded banks have had to dramatically increase their loan-loss provisions related to U.S. commercial real estate exposure.
How do community banks make money?
They make money from what they call the spread, or the difference between the interest rate they pay for deposits and the interest rate they receive on the loans they make. They earn interest on the securities they hold.
In fact, the FDIC covers banks, big and small. So, if you're looking for a safe place to put your money, a verified FDIC-insured community bank is a great option. Centier Bank is a community bank that is FDIC-insured. This means that your money is safeguarded in the communities they serve.
A community bank is much more tied to the community it serves and provides personalized, relationship-based banking services. Unlike big banks we've heard about in the news recently, community banks keep your money local which contributes to prosperity now and for future generations.
Community banks provide roughly 60% of all small business loans and more than 80% of farm loans, but they are already struggling from an increased regulatory environment. Between 2000 and 2021, the number of banks nationwide fell from 8,315 to 4,236.
| Bank | Forbes Advisor Rating | Fees |
|---|---|---|
| Bank of America | 4.2 | Monthly service, out-of-network ATM and overdraft fee |
| Wells Fargo Bank | 4.0 | Monthly service, out-of-network ATM and overdraft fees |
| Citi® | 4.0 | Monthly service and out-of-network ATM fees |
| Barclays | 3.4 | Non-sufficient funds fees |
Keeping your money in financial institutions rather than in your home is safer, especially when the amount is insured. “It's not a time to pull your money out of the bank,” Silver said. Even people with uninsured deposits usually get nearly all of their money back.
Smaller community banks do have some disadvantages, of course. Because they have fewer assets, they may not be able to service every type of lending activity. In addition, many of them have a limited number of branches, and may offer fewer financial services than their larger competitors.
An excellent example of a community bank is Carver Federal Savings Bank.
- Lower savings rates. Banks generally are less competitive than credit unions in terms of interest rates for savings accounts. ...
- Higher loan rates. Interest rates for loans from banks tend to be higher than interest rates charged by credit unions. ...
- Customer satisfaction.
For example, community banks focus on providing traditional banking services in their local communities. They obtain most of their core deposits locally and make many of their loans to local businesses. For this reason, they are often considered to be “relationship” bankers as opposed to “transactional” bankers.
Why is community bank calling me?
Please note, CBNA does send fraud text alerts to customers to verify certain transactions, but we never ask for you to transfer money or give us your credentials. If you ever get a text or phone call and think it is suspicious, don't click the link or give any information over the phone.
- State Bank of Texas (Dallas, TX)
- Cogent Bank (Orlando, FL)
- CFG Community Bank (Baltimore, MD)
- Encore Banking (Little Rock, AR)
- Poppy Bank (Santa Rosa, CA)
- MVB Bank Inc. (Fairmont, WV)
- Forbright Bank (Chevy Chase, MD)
- Bankwell Bank (New Canaan, CT)
Wells Fargo officially divides its operations into three categories for management reporting purposes: Investing and wealth management, wholesale banking, and community banking.
Regional banks are bigger than community banks but smaller than national banks, with an asset range of $10 billion to $100 billion. Some local banks are limited to one community, while a regional bank can operate branches across a few states and have history in each community.
Ownership: Community banks are owned by shareholders, who may be individuals or institutional investors. Credit unions, on the other hand, are owned by their members, who are also their customers. Membership: Community banks are open to anyone who wants to become a customer, regardless of where they live or work.
