The Benefits of Choosing A Local Bank

The Benefits of Choosing A Local Bank

When choosing a bank, should the size of the institution be considered? Small hometown banking institutions with community roots and involvement offer the expected checking accounts and savings accounts along with most of the other basic financial products and services as the larger national or regional institutions, but they often offer their customers so much more. The advantages of choosing a community based, local bank will vary depending on individual situations and needs, but many consumers are learning that forming a banking relationship close to home can deliver a level of service and simplicity that the big banks can no longer match.

Lower Costs

In addition to a basic checking account or savings account, most banks, regardless of their size, can offer the consumer the same basic set of additional products and services such as loans, interest earning accounts, CDs, debit card services, online bill paying, and credit cards. However, one key difference is in the assessed costs in the form of rates and fees. Almost without exception, the rates and fees imposed by local or hometown banks are substantially lower than those charged by their bigger counterparts. This can add up to significant savings depending on the mix and frequency of services that are used.

Better Rates

Since smaller community banks are forced to remain competitive in order to attract customers and business, they will often offer a lower interest rate on car loans, home loans, and mortgages. Furthermore, they may also pay higher interest rates on a variety of savings programs than do the larger national or regional institutions. This competitive motivation can also result in better terms on bank-issued credit cards. Always shop around for low rates and best terms from local banks to find the best rates for your personal situation and needs.


Whether you like to do your banking in person or you choose to take advantage of the convenience of online banking or an online loan application, you will likely find transactions with a smaller, local institution to be more convenient than using a larger, national or regional institution. For in-person banking, a hometown bank will often have bank branches closer to your home or to where you work. For online banking, the smaller local banks offer all of the same services as do the big banks, with the added benefit of having a convenient nearby location available when a face to face meeting is required.

Personal Service

Personal service is one area where the smaller, local banks can really shine. Almost all of the big banks have fixed processes and systems, and therefore, they can be quite inflexible in those situations when some degree of accommodation or understanding is required. The value of having a customer service representative who knows you by name and who may even be a friend or neighbor can go a long way toward satisfactory problem resolution when such inevitable situations do arise. Quite often, at a local bank, a customer can form a relationship over time with a single individual who can work with them and handle all of their banking needs.

More Funding Options

For those with an interest in contributing to the local community welfare and its growth, the smaller hometown bank will often offer a much wider variety of funding options. A local banking institution typically has a much greater motivation to enable local business growth and success than does a larger national or regional institution. A hometown bank will usually work much closer with a potential local borrower to assure their continuous contribution to the local economy.

Local knowledge

With their primary focus on the community they serve, local banks may be a much easier alternative to turn to for many banking needs. When wanting to borrow money for any purpose, the large regional or national institutions are often much harder to work with than the hometown bank that has extensive experience in loan evaluation in the local area. If borrowing money to buy a house or improve your home, the local bank likely has experience with the builders or contractors you are working with which can often simplify the entire process, saving you both money and headaches along the way.

Community Involvement

The big national banks may use their deposits to provide loans across the country, but small local banks tend to use their deposits to ensure the growth of the communities they serve. For many consumers, knowing that smaller local banks generally contribute more to local community growth than do the larger institutions is a determinative factor in deciding where they choose to bank. Since local, small businesses are most likely to approach local banks for the financing needed for a startup business loan and even financing for business growth, this aspect of a small bank's business benefits local communities as well. While it may be true that a consumer's personal banking needs are a primary factor in their choice of bank, many are still influenced by the sense of satisfaction gained from helping to benefit their local economy.

While almost all banks, regardless of their size, offer the same basic list of products and services, bank offerings can and do vary from one institution to another. Before deciding which one is best for you, it pays to do some research and shop around.

Personal recommendations from folks you trust can be invaluable. If you're looking for a bank that gets to know each of its customers personally, consider asking your friends and neighbors where they bank and how they are treated.

In East Texas, a hometown institution with a long history of community involvement like Citizens State Bank can no doubt serve East Texans and the various banking needs of those who call it home with a much higher level of friendly personal service and care than can any bank branches of one of the larger national megabanks.