The $42B Question: Why Aren’t Americans Ditching Big Banks?
wsj.com
wsj.com
I bought stock in a regional bank that went through the 2008 crisis with hardly any drop in stock price, pays solid dividends, has beat the pants off Goldman Sachs from the viewpoint of the investor, but they also do well by their customers, community and employees. It is like some people don’t know you have a choice.
That's what all those ad spend dollars do, make sure new ideas are drowned out by a dull parade of decade-old information.
I've been very happy at a work-related credit union and I can't recommend them highly enough; no fees, boring online banking that doesn't change every 18 months, and the knowledge that I can get a human on the phone without having to tickle a robot's numbers.
In my case, they have been demonstrated as too big for the government to allow to fail. Smaller banks have not.
That moral hazard is why I still keep accounts with big banks.
The service was seamless throughout all of that with the strange detail that they got a letter from the bank when their mortgage was a year from ending that said their payment had been miscalculated and they owed more money. I told my mom that she could contact the state regulator and in the end the bank backed down and even let her off the hook for the last three payments!
Later on I had an account at an S&L in Socorro, NM and that S&L failed during
https://en.wikipedia.org/wiki/Savings_and_loan_crisis
and got rolled into another S&L which was mostly a matter of the name changing and going to a different branch.
Anecdote: I have an account at a credit union connected to my wife's job. They've been really hard to work with. When my wife lost her ATM card, it took like 4 different phone calls to convince them to mail a new one. When I tried to get new checks with our new address on them, that was hard too. They have an Android app, but it's buggy.
Generally, they just seem like they need to hammer out some better business processes for things that customers commonly need.
I guess one thing I've learned is: if you're joining a credit union, make sure they have a physical office close to you. I feel like we could have gotten better service if we'd sat down across from a real person.
Why don't you tell us the name of this specific bank so we can look into it?
I have Chase and their app is excellent. And I love the fact that their branches are available in a lot of places. Finally, if I have any confusion I can either walk into a branch or talk to a human and get a response pretty quickly.
They’ve helped me arrange some fairly exotic transactions that there’s no way I would have been able to do on my own, but to get to that position, I had a decade long relationship with them, and they help me out even though I don’t have much money with them.
They all have issues with following legal practices, some more than others but all are equally bad.
There isn't a good alternative, and unfortunately the Fed decided to remove the fractional part, of fractional banking so they have no impetus to actually change. Depository requirements were set to 0% in 2020, and the overages have balloooned by roughly 300% since that time according to the still required reporting which is just a matter of time until they sunset.
I keep just the minimum average balances in my checking and savings to avoid monthly fees. (for example, $3K combined check/savings at Citi, $1.5K checking at Chase). All my excess cash/emergency fund is either in CDs or I-bonds at higher interest rates.
As to the bigger question of why I would open accounts at these large banks in the first place (when I also have a local credit union that has served me well for over 30 years with savings and several loans), none of the banks where I am now are the ones I opened the account with. Every single one started at a smaller local or regional bank and then got taken over by some other out of state/big bank, sometimes more than once. Even Wells Fargo is no longer the original bank I started with, even though they kept the name, it was taken over by some out of state bank several decades ago as I recall.
As a result, I have simply drifted into a relationship with these big banks because I was passively transferred.
I guess big banks just have bigger advertising budgets.
This is my reason for primarily banking at one of the large banks. I have my mortgage, checking and savings accounts all in one place and the physical bank and ATM is less than a mile away. That said, when I do have a large amount in savings I do move it to an online savings account with better rates.
I have accounts with multiple financial services companies including a local credit union and a large bank, among others.
I did prefer the credit union in terms of many of the rates etc and customer service.
However, the transferability across states and countries is a no-contest with the big bank. We moved out of state and the transition with the big bank was invisible; with the credit union (who we still have an account with) it would be really difficult to maintain day-to-day use. Even when we lived in the same area as the credit union, things like debit/credit card fees and whatnot were not comparable between the two.
So both have their perks; they're just structured differently.
I haven't been inside a bank since 1997, when I opened an account with USAA. Since then I've moved on to other online-only banks.
Since 1997 I've had mortgages, personal loans, home equity loans, multiple car loans, credit cards, CDs, and a myriad other banking and investment services and never been face to face with a bank employee.
The only time I ever even slightly thought about physical banks was when I started wanting Sacagawea dollars to pay at neighborhood lemonade stands (I used to love getting Kennedy half-dollars at my childhood stand, but inflation's a bitch...).
The very, extremely, low premium I pay to order Sacagawea dollars from the Mint is more than offset by the 3% I get on my savings account by not using a brick-and-mortar bank.
What are people doing in those bank buildings?
I do not understand.
https://olui2.fs.ml.com/Publish/Content/application/pdf/GWMO...
The big catch is that you have to open it with $100k, but after you open it, you can reduce it to any amount you want and add back however much anytime.
Might be useful for those wanting to keep platinum honors status with BoA.
So wife and I can have both our emails and phone numbers so we can access all of our joint accounts without the other person having to tell them the 2FA code.