Three Reasons Why Your Money is Safe with Community Banks (2024)

FAQs

Three Reasons Why Your Money is Safe with Community Banks? ›

Community banks tend to invest their assets more conservatively than larger banks, so they may be less likely to fail in the first place. But even so, as long as you opt for a community bank that's FDIC-insured, you won't have to worry about losing the money you've no doubt worked hard to save.

Community banks tend to invest their assets more conservatively than larger banks, so they may be less likely to fail in the first place. But even so, as long as you opt for a community bank that's FDIC-insured, you won't have to worry about losing the money you've no doubt worked hard to save.

The FDIC insures your bank account to protect your money in the unlikely event of a bank failure. Bank accounts are insured by the Federal Deposit Insurance Corporation (FDIC), which is part of the federal government. The insurance covers accounts containing $250,000 or less under the same owner or owners.

Paying Fewer Fees

While community banks also charge fees, they generally cost less than larger institutions. According to Bankrate, you might also get higher interest rates on savings accounts and other investments if your business banks with a community institution.

Both SIPC and FDIC insurance protect your assets in the event of a failure at member institutions. The biggest difference is that FDIC coverage protects your bank deposits and assets, while SIPC coverage protects your securities with a brokerage firm.

Community banks are particularly vulnerable to loan losses due to their size relative to capital held. Already this year, Deutsche Bank, Aozora Bank, and other publicly traded banks have had to dramatically increase their loan-loss provisions related to U.S. commercial real estate exposure.

The DICGC insures principal and interest upto a maximum amount of ₹ five lakhs.

A locked, waterproof and fireproof safe can help protect your cash and other valuables from fire, flood or theft.

JPMorgan Chase, the financial institution that owns Chase Bank, topped our experts' list because it's designated as the world's most systemically important bank on the 2023 G-SIB list. This designation means it has the highest loss absorbency requirements of any bank, providing more protection against financial crisis.

Community banks hold FDIC deposit insurance, which covers each depositor's account, dollar-for-dollar, up to the insurance limit ($250,000). If your deposits exceed that, community bankers are there to advise you.

What are 2 benefits of using a local community bank? ›

A community bank is a depository or lending institution that primarily serves businesses and individuals in a small geographic area. Community banks tend to emphasize personal relationships with their customers.

For example, community banks focus on providing traditional banking services in their local communities. They obtain most of their core deposits locally and make many of their loans to local businesses. For this reason, they are often considered to be “relationship” bankers as opposed to “transactional” bankers.

Interest-earning accounts are generally low-risk compared to investments such as stocks. Savings accounts, CDs, money market funds, treasury bills, and bonds are options for investors.

Fewer branches and ATMs: Unlike national banks, you're less likely to have access to a branch when traveling, and the network of ATMs may be limited.

The surge in interest rates, a consequence of the Federal Reserve's efforts to curb inflation, has created a challenging environment for community banks. Consumer prices rose by 3.7% from Sept. 2022 to Sept. 2023, prompting multiple adjustments in the Federal Funds rate.

In fact, the FDIC covers banks, big and small. So, if you're looking for a safe place to put your money, a verified FDIC-insured community bank is a great option. Centier Bank is a community bank that is FDIC-insured. This means that your money is safeguarded in the communities they serve.

Higher Quality Service: Smaller banks tend to have less employee turnover than larger institutions. Employees at community banks form deeper relationships with their customers, leading to higher quality service and flexible decision making.