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Advantages of Banks: How Banking Big Can Benefit You

The banking industry has become a David and Goliath situation, as small local banks and credit unions look for creative ways to overcome the advantages of large banks.

Justin Cupler

Contributing Writer at Tally

February 21, 2022

There are lots of options when searching for a new bank, from large banks to local banks and even credit unions and online banks. It's easy to get overwhelmed with all the options. 

To choose the right bank for you, look at all the benefits and advantages of banks versus credit unions. However, large banks do have plenty of big advantages that can be rather tempting. 

Below, we'll outline all the key benefits of choosing a large bank and contrast those to some of the benefits and drawbacks of credit unions and small local banks. 

Advantages of banks over credit unions

When weighing your options between a big bank — or even a medium-sized bank — and a credit union, each has its benefits. But big banks have several advantages that make them an appealing option. Here are some of their key wins. 

Vast ATM network

One of the advantages of banking with a larger institution is that they often have hundreds of branches nationwide, and each branch has its own ATM. Plus, larger banks also place standalone ATMs inside stores, parking lots and malls. And often, those without branded standalone ATMs can afford to offer their members free access to third-party ATM networks, like Allpoint. 

Having access to branded ATMs also means you can make easier deposits to your savings account or checking account. You’ll be able to skip trips to the bank by making cash and check deposits at the ATM.

On top of the convenience, these large ATM networks also save you money, as you won't pay the non-customer service charge at the ATM or the fee your bank may charge for using an out-of-network ATM. 

Credit unions sometimes offer access to third-party ATM networks to expand their ATM availability, but they generally only have a handful of branded ATMs in their local area. 

Numerous bank branches

Going to the bank used to be a regular thing. Whether you needed to deposit your paycheck into your bank account or withdraw cash, bank trips were just a part of normal life. But they are now a rarity — with direct deposit, mobile apps and more advanced ATMs taking the place of regular bank trips. 

That said, when you need a bank branch, whether it's to clear up an error in your account, apply for a loan, or make essential changes you can't do online, having a local branch is a huge perk of banks. You can walk in and speak to a real-life person to sort out the issue. 

Credit unions, much like their ATMs, often have only a handful of branches in a geographic area. And if you move out of that area, you may find it difficult to get the customer service you need. 

Easy banking abroad

Folks who travel overseas often find a larger bank offers one big benefit: access to fee-free ATMs in foreign countries. Some large financial institutions have generous relationships with overseas ATM networks that allow their customers to make fee-free withdrawals. 

Some big banks, however, still charge customers to use overseas ATMs, but they at least offer access. Some credit unions may not offer international debit cards, cutting off their customers' easy access to their funds while overseas. 

Better technology

With massive budgets, large traditional banks can pour more money into their technology, making banking even easier. Some of this tech includes: 

  • Robust online banking features, like online bill payments and the ability to instantly transfer money to friends and family

  • Well-functioning and useful mobile banking apps

  • Advanced ATMs with deposit and other convenient features

  • Advanced security, like text fraud alerts and instant card deactivation if lost or stolen

This technology can streamline your banking experience and help keep your account safe from criminals.

Lower or no minimum balance

Since larger banks have more liquidity,  they are usually less worried about your minimum account balance than a small credit union. This means that your bank might only require a small minimum monthly balance or even no monthly minimum balance. 

On average, banks and credit unions charge a $5.14 monthly fee for not meeting their minimum balance requirement. You’re more likely to avoid this fee at a large bank due to a no-minimum-balance policy. 


Why a credit union may still be a better bet

While large banks have plenty of benefits that draw in tons of customers, credit unions have a few benefits themselves, including: 

  • Focus on customer service: Credit unions are non-profit organizations, so they focus on caring for customers rather than selling you financial services. This also means there are many services you can get for free, including financial counseling and investment advice. 

  • High-interest savings accounts: Back to the not-for-profit model, this lack of concern for profit means credit unions can offer their customers higher interest rates on savings accounts. These high-yield savings accounts mean you get more money in your pocket just for putting more money in your account. 

  • Lower fees: Credit unions tend to have lower fees altogether when compared to large banks, so you could save some money there too. 

  • Low loan rates: Credit unions often offer members lower loan interest rates than traditional banks — again, thanks to them being non-profit entities. 

A small local bank could be an option, too

A local bank offers some benefits too. They often have a strong commitment to the community and sponsor local events, sports teams and charities. Some people are drawn to the small town connection and higher level of customer service.

Additionally, a recent survey found 44.3% of small banks' checking accounts have no monthly maintenance fee. Only 31.33% of large banks reported no monthly maintenance fees. The survey also found that of the small banks that charged a maintenance fee, they only charged an average of $10.95 compared to $16.35 at large banks. 

However, as discussed before, small local banks generally have one or two branches, limited service offerings, and lackluster technology.

The choice is yours

When choosing your next bank, there are plenty of advantages to choosing a big bank, including large ATM and branch networks, international banking connections, low minimum balances and advanced technology. These can seem like slam-dunk reasons for picking the big guy. 

Though credit unions and local banks do not have the amount of money big banks do to offer all the same perks, they have plenty of account holder benefits. So, it's important to consider all the pros of each and decide based on your needs. 

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