Should You Bank Local? Or Are Big National Banks Best?

By Rick Gonzales | 6 months ago

local bank

If you’re looking to open up a bank account, whether it be your first or your tenth, the decision to go with a local bank or one of the big-name banks can be a difficult choice. Do you go for the local bank because it is more in tune with your community, or do you opt for the big brand name bank because they make access to your own money much easier?

At first blush, one would think a bank is a bank. You can deposit your money and you can withdrawal your money. What more do you need, right? Well, believe it or not, there are plenty of differences when you compare your local bank with the megabanks and we are here to tell you about those differences so when you decide to open a new account, you will have all the facts in front of you.

You may also decide, after reading this, that change is forthcoming. You may decide that a big bank is what you need to keep your money safe, so moving your money over to one is your best option. Then again, you may decide that your local bank is what you need for that personal touch, one that puts your mind at ease.

Let’s take a look at both the local bank and the megabank. There are pros and cons to both so we’ll see if we can steer you in the right direction.


local bank

Obviously, local banks have a much richer (pardon the pun) history than do the megabanks. Local banks have been a staple of banking for a long time, catering to their customer’s monetary needs.

Megabanks have had a much shorter history, but nevertheless have had a significant impact on all things monetary.

The very first megabank model didn’t come until 1998 when Travelers Group and Citicorp merged. It was a pairing that saw the duo become the world’s largest financial services company. Two years later, Chase Manhattan followed in Travelers/Citicorp footsteps by acquiring J.P Morgan. It was another big-time pairing that pushed along the megabank idea.

By the time 2009 rolled around, there were 4 big players in the megabank realm – Bank of America, Wells Fargo, Citigroup, and JP Morgan Chase. Today, they still remain as the big guns, but you can also add Capital One, Barclays, Goldman Sachs Group, HSBC Holdings, and Deutsche Bank into that mix.

One of the major differences between your local bank and one of the megabanks is assets. A large bank will have at least $500 million or more in total assets while a local bank usually falls under the $500 million total asset mark.


Big Banks

local bank

It should go without saying that megabanks more than likely offer the most convenience. Depending on which bank you choose, they are practically everywhere to include inside grocery stores. So, if you are one who takes to travel across the country, there is a great chance that you will find your bank wherever you go.

Technologically speaking, big banks have an advantage there as well. In this day and age, so much of the financial transactions are carried out over your smartphone that big banks have catered to customers in that regard. Big banks invest millions upon millions to make sure you can access their services online.

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Another advantage big banks may have over their smaller counterparts is the selection of financial accounts and services. The bigger they are, the more they can offer. But be wary, look out for all the hidden costs, they can get expensive.

Local Banks

local bank

As for the little guy, local banks relish the fact their customer service is much better and more personal than what you find at the bigger banks. Local banks are typically much smaller in physical size and bankers have a tendency to remember who you are after a visit or two. The personal touch can go a long way.

Another nice advantage to the local bank is that they are community-based. They serve the community businesses and become their cheerleader in wanting the small business to succeed. They may also offer certain small business loans that will better serve the business and spur on the neighborhood’s economy.

Who doesn’t like free? One more thing you might see is your local bank offering you free checking. True, some of the big banks will do the same but after a short period of time, the fees will start to get tacked on. With many local banks, if your checking account is free, it remains free for the duration of your banking.


Big Banks

When it comes to rates and fees, the wiggle room is practically nil. Megabanks have already set the fees and interest rates of their financial products across the board and if they aren’t offering an introductory rate, then things don’t change.

Local Banks

Believe it or not, with local banks there is always that opportunity to negotiate. Local banks many times will deal with a financial issue and customers on a case-by-case basis to see if there is a better way to service the customer. Some of the things they will help out with are the waiving of certain account or service fees or they may even reducing the interest rates on loans.


It’s true, bigger isn’t always better but it always comes down to personal choice. The big banks offer the convenience you may seek and if you are looking to do much more with your money, they may offer services a smaller bank just can’t offer.

If you are one who is on your smartphone 24/7, then a big bank may also be a wise choice for all the technical advantages they have over the local banks. Now, that’s not saying you can’t have access to your money from a local bank on your smartphone, but the chances are the big bank is going to do it much better.



Big banks are the bomb and sometimes literally. With all the big bank turmoil we’ve seen over the past decade or so, it is hard to trust putting your money in their hands. Many do, though, and if you feel comfortable doing so, you will have plenty of options to make your money work for you.

On the other hand, local banks rock. They offer personal service like none other and that can be worth its weight in gold.

What do you say, TMB fans? Do you go with the big guy or is the local branch your choice? Let us know.