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Consider Moving Your Money to Local Banks

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This past weekend my wife and I went home to New York to visit my parents and my visiting relatives for the holidays. My parents recently moved within spitting distance of Port Jefferson, a cute little “village” that features a ferry and lots of restaurants and small boutique shops. My parents have been saying that the recession has really hurt the area and it’s most visible in the shops. Small shops have gone out of business and parking was now free, when before non-residents would have to pay.

On our walk we stopped by Boardwalk Games, a little board game store on the corner of Main Street and W. Broadway (their website says differently but I swore the store was on that corner). Anyway, we walked inside, talked to the couple who owned the store and walked out with a copy of Dominion, a card-based game that won some game award this year. We paid more for the game than we would’ve online but since the owners were so nice and friendly and the economy being so weak, it was good to put some of our money back into the local economy.

So what does this have to do with banks? I was chatting with Matt from Steadfast Finances when he accidentally sent me the link to the video. It talks about how if you are truly furious with how the “to big to fail” banks have been acting, vote with your wallet. Move your money to a community bank.

I don’t like how the video demonized the larger banks but I do like the message. If you don’t like how a store is behaving, boycott it. Plenty of people avoid Wal-Mart because they don’t like their business practices. If you don’t like how a bank or credit card company is treating you, take your business elsewhere. Don’t complain, don’t rant, don’t shout into the heavens… because they don’t care. If your money is still in your account there, they won’t listen to you because they already have what they want – your $$$.

I also like the message about supporting community businesses. For many years I’ve always advocated going with the highest (or lowest, depending on what you’re looking for) interest rate whether it’s a local or national bank. Now, with the spreads getting smaller (because national banks can’t rely on selling exotic financial instruments to make more money), it makes more sense to keep the money local.

As the old adage goes – think globally, act locally.

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49 Responses to “Consider Moving Your Money to Local Banks”

  1. Foo Finance says:

    I like this idea but took it a step further. I have had some bad experiences with banks in general so I decided to start looking at credit unions.

    I just joined a local credit union mostly for the purpose of obtaining a home equity line of credit. I have borrowed money from family to make my newly bought foreclosure livable and need to pay them back. This credit union offers great rates and fees. Well over 1% difference than any bank here actually.

    Their savings rates still don’t beat ING except for a small savings account where I get 6% on the first $500 deposited and 0.49% for anything over. Needless to say they will be holding $500 of mine!

    Local banks can be just as good I just like the idea of the credit union being non-profit. They have reasonable fees and are a lot easier to work with since they don’t have sales targets that affect their paychecks.

    As with any bank or credit union be sure to research the fee structure and membership rules before jumping ship.

    - Foo

  2. Go Local! says:

    The bailout and subsequent behavior of these arrogant banking types really got me angry, so I moved my accounts to a local credit union. When setting up the accounts at the CU, I got service I had never seen in my time at WaMu/Chase.

    • Jim says:

      CU have hundreds or thousands of customers, WaMu/Chase has millions. It becomes a simple issue of math… you matter more to your CU than you matter to WaMu/Chase.

      • Go Local! says:

        Indeed – and I like that way :)

        • ziglet19 says:

          I do love my local credit union – it is so nice to call and actually get a LIVE person on the phone instead of spending 10 minutes trying to find out how to get a live person that I do with a bigger bank.

    • Laura says:

      I moved years ago to a credit union, too, due to being mistreated by bank after bank. It was awful. I’ve been happy ever since.

  3. Lynnae says:

    We were happy with Wamu for years, but we hit a financial glitch this year, when our mortgage company went under, and our escrow refund check bounced. I could not believe how difficult it was to deal with a national bank.

    We had moved since opening our original account, so we had to deal with an out of town branch, because the local branch couldn’t help us. It was a huge mess.

    As soon as we got everything straightened out, we moved our accounts to a local bank, and we couldn’t be happier.

  4. freeby50 says:

    In generally I agree that community banks and credit unions are a good place to go over the large corporate banks. Right now we’re with Chase after they acquired Wamu. I am not very fond of Chase but they haven’t made me mad enough to drop them. Changing banks can be a bit of a hassle with all the automatic payments. We really should ditch Chase and go local.

  5. freeby50 says:

    Actually to be fair, the service I’ve received personally at Wamu and now Chase at the local branches has always been just fine. I’ve never had a problem with a teller at a big bank. A teller at a big bank is really no different than a teller at a small bank as far as I’ve seen. They are just people doing their jobs.

    The problems I’ve had with big banks have been general company policy kind of things. I’ve actually had policy problems with a credit union in the past though too. ING is a big bank and I love them.

  6. lostAnnfound says:

    We have been with our CU for 20+ years (checking, savings, CDs). One main office, three branches in different towns. The service has been outstanding, very personal, and they offer most of the services that I would get at one of the big banks (mortgage, CDs, IRAs, online bill pay, etc). The only account we have outside of CU is savings at ING.

  7. Imani says:

    Wow! Port Jeff! You were in my neck of the woods…small world.

    I’m all for shopping locally in the mom/pop type stores in my immediate area. They know me, treat me well, and provide wonderful service. Even if things might cost a bit more, I like knowing that I’m helping neighbors keep their jobs so they too can contribute to the neighborhood.

    I also bank at a small bank that is only in NY and my branch is just a 5 minute walk from my home.

    Glad you went ahead and bought the game there instead of online.

  8. Steven says:

    Not demonize national banks?

    They do all they can to let their shareholders profit, and screw the people that keep them in business. To me, that says it all.

  9. That is the best advice, put your money where your mouth is-exactly!

    John DeFlumeri Jr

  10. JPeteQ says:

    Completely not the point, but I got Dominion for Christmas and I love it!

    I won’t bank at Bank of America for that exact reason. I don’t like their business practices or how they treat consumers.

  11. eric says:

    A couple of months ago I took most of my money and put it in a local bank. I love my online banks but it was nice to walk down the street and see a branch with tellers that knew me.

  12. Izalot says:

    I have plenty of banks near where I live but the convience of the proximty doesn’t outweigh the cost of the fees. I believe in your local credit union. By the way a cool thematic board game for this thread could be:

    http://www.boardgamegeek.com/image/81740/break-the-bank

  13. aua868s says:

    planning to move my money from a large bank to a community bank in my neighborhood!..woo hoo

  14. billsnider says:

    I have always used credit unions and did fine on loans, savings and CD’s.

    I live near Port Jefferson. Nice place to visit.

    If you have any doubt about a bank, check their rating at http://www.bauerfinancial.com. They rate banks.

    Bill

  15. Bill says:

    I like the idea of investing locally, but I’ve been with US-Bank for 20+ years and never had a problem or poor service. I’m not sure what local means in this context. They have branches all over my area and major building’s here that hire massive amount of IT talent. It is hard to find an IT person to hire that hasn’t worked for US-Bank here in Portland.

    • Soccer9040 says:

      I agree half way with you here. I live in Columbus and Chase employs thousands of people. I’ve never had a problem with them, but at the same time they are starting to nickel and dime me more and more. If I ever moved to a CU, I would still keep my chase account just for their vast ATM network. I love making deposits at the new ATMs.

  16. ziglet19 says:

    Great post! I am a big believer in not using a company/bank if you have had an unhappy experience. I know it doesn’t make much difference to them that I don’t patronize them anymore, but it sure makes me feel good not to dish out my hard earned money to some company/bank that has rubbed me the wrong way.

    • Jim says:

      It’ll make a difference to them when you pull out your money, even if it’s just $1. For every $1 you put in, they’re able to lend out around 10x that…

      • Safeway_Sage says:

        This trend almost sounds like a counter-culture movement that is just beginning to take off. I really think this is an important step, especially in towns that have been ravaged by big boxes and big banks.

        I already feel better about the prospects for this decade!

  17. Safeway_Sage says:

    Wow! This video and the post blew me away. I am not one to make new years resolutions, but that is going to change this year! S_S

  18. javi says:

    I love my local credit union. They save me so much money in many areas.

  19. Glenn Lasher says:

    Done. I moved to a local credit union over a year ago and have not missed the Very Big International Corporate Bank very much at all. I still owe them some money (see my post on New Years resolutions) but I don’t expect that to last long. Once they’ve been paid off, I’m throwing a party.

    As for the Credit Union, it has one branch, around the corner from my home. It has one ATM, located at my office. I can call them up and say, “Hi, this is Glenn Lasher” and they recognize me and often can anticipate why I am calling. I have spoken to every employee of the Credit Union at least once, they all know me and my wife by voice and on sight.

    I remember banking as a child being like that. That was before Community Savings Bank got bought out by First American Bank, which, in turn, got bought out by Key Bank, which, in turn, is where it went to hell in a handbasket. This is unlikely to happen at my Credit Union, because the members and the board have no ambitions of building an empire; only of avoiding the BS.

    Oh, and the president is one of my co-workers. How cool is that?

  20. BrianC says:

    I’ll definitely be taking a closer look at my local credit union. Thanks everyone!

  21. Wilma says:

    Loved the video. Especially the part where the guy says he doesn’t have money in any of the big banks. I have several CU’s and community banks to choose from. It’s very hard to make a choice. For the last year I’ve been mulling it over. Maybe I should get up on that very soon. Thanks for the blog reminder. =)

  22. Gates VP says:

    Man Jim your timing is crazy good. I started moving all of my money away from Bank of America earlier this week (a day before this post in fact). Opened an account at my local branch and now we’re just migrating over the bills as they come in for the next month.

    The video is very pro, excellently put together. I’m obviously going to argue that it over-simplifies, but for a 3-minute video, I think that it really does make its point.

    Of course, I didn’t leave b/c of the video, I left BoA b/c of the classic comedy of errors. They set up the wrong type of savings account and we got dinged a monthly fee (which they couldn’t reverse due to BoA’s new policies). At the same time, we tried to deposit some International Money Orders that we received as gifts over the Holidays. These were US Dollar money orders issued against some Canadian banks.

    Now to be clear we’re not talking about “tiny Canadian banks”, these are banks #7 and #11 in North America issuing the Money Orders.

    So the first problem was that they needed 6-9 weeks to clear. Again, these are highly secure international money orders drawn against well-known major banks, not silly personal checks. But they came back after a week because the bank could not process them at all.

    Here we are working with one of the biggest banks in the world and they can’t process money orders from their neighbouring country?

    So we left, I mean handling these types of transactions are the very reason we picked a large bank in the first place. Given the horror stories I’ve started to see on-line from BoA, I’m definitely down with a little bit of money movement.

  23. Shirley says:

    In 1961 I banked with Bank of America. (Yes, I’m that old.) My monthly statement never seemed to balance to the penny. When I went to the bank and asked for help, they told me, “Our computers are never wrong. Just change your balance to match ours. Good-bye.”

    I pulled my small savings and checking and joined our local Credit Union. I balance to the penny every month and the customer service is excellent in person, on the phone, by email or live chat. I couldn’t be happier! We’ve opened linked savings accounts for all five of our kids (unlinked at age 18) and and all five of our grandchildren, so for spectacular customer service they were rewarded with 10+ more accounts.

    • ziglet19 says:

      “Our computers are never wrong. Just change your balance to match ours. Good-bye.” Yikes! Sure, trust us, as we ding you with extra fees and hope you won’t notice. Good for you for leaving them, that’s ridiculous.

  24. tbork84 says:

    There is actually a rather decent sized grass-roots movement to move to smaller banks and credit unions. That’s what inspired some people to make that video, see this link at the Huffington Post to find out how the idea for that video started. (http://www.huffingtonpost.com/arianna-huffington/move-your-money-a-new-yea_b_406022.html )

  25. fetu says:

    I have used the local credit union for my savings accounts for many years. It is just a small country one. Every year they put on a free dinner for the members with oddles of door prizes.The retirees love it! At that dinner we get the yearly accountants statement on how well the bank is doing…..very well thank you. The also have a “Santa Club”…a savings account that cannot be withdrawn from but the amount is transferred to your savings account on the first day of Oct. If you do not want to spend it for xmas you can transfer it back into the santa account the next day. This santa account gives interest of 4% with an amount limit of $2500.

    Another thing good about Credit Unions is that they have very good rates for car loans so if you are planning on getting one start an account now and build up a history with the Credit Union before hand.


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