Off late there has been a debate about whether to move your money to a small bank or not. People have started to boycott big banks due to their poor services and move money to a small bank.
The reason behind moving your money is that the big banks don’t care about people, small businesses, and community. Smaller, community banks are supposed to be more responsible and personal because you know the bankers personally. The organizers believe that a mass movement to smaller banks will force the big banks to be more responsible.
If you are also thinking about moving your money to a nearby small bank, then it is advised do some research before stepping further as there are some factors in favor and not in favor of this.
Control: The biggest advantage of moving your money is the feeling of control over the situation that you’ll receive from sticking to a small bank.
Support to Small Business: A small bank nearby, supports local organizations and lends to small businesses. Being in a small community, they become a part of the community.
Personalized Services: A bank with just a few branches and clients provide better personalized service when you have some problem related to your accounts. Moreover they charge less fees for their services.
Inconvenience: Local banks have a limited number of ATMs that may also be far from the place where you work or live.
Over-leveraging: Big banks are bailed out for excessive leverage but smaller banks fail in much higher numbers because they over-leverage and make risky loans.
Higher Risk: Most of the community banks are failure prone. Before placing your money in a small bank, you should verify its ratings.
The decision about moving your money depends totally on you. You have to decide whether switching to a smaller bank is right for you and your financial habits.