Financial institutions have been increasing the cost and number of fees in recent years. Bank of America recently decided to eliminate a low-cost checking account and force some customers into an account with a $12 monthly fee.
The actions of Bank of America led to over 50,000 consumers signing a petition of disapproval on change.org. Clearly the phrase bigger is better doesn’t always apply when it comes to the size of your bank.
If you are one of the many big bank customers looking for a new low-cost checking alternative, here are three things to consider. Community banks and credit unions continue to rank better for lower cost of services.
Lower Cost of Fees
When it comes to overdraft fees local financial institutions charge their customers significantly less. Community banks and credit unions charge an average of $29 per overdraft fee compared to mega banks that charge $34. Also 84% percent of Credit Unions offer a truly free checking account, meaning no monthly service fee according to Bankrate.
Making an Impact
Another benefit to choosing a smaller institution is the direct impact you are making in your community. That’s because local banks and credit unions invest and lend in the neighborhoods they occupy. There’s nothing better than knowing where your money is going and feeling good about it.
Trust and Transparency
The most important factor to consider before opening a new account is how trustworthy a financial institution is. If a bank has the reputation of making negative headlines in the news you should avoid it at all costs. Eight out of ten Credit Unions post their fees online for consumers to see compared to only 50% of banks.
Before choosing a new financial institution, always check the fine print and ask to see a copy of the schedule of fees.