Are you ready to take the first big step towards personal finance and your financial future by opening a bank account? Great, but now you must decide between the big major banks (Bank of America, Chase, Wells Fargo, etc) or maybe a small local bank or credit union. Which one should you choose, and what are the pros and cons?
What is a Big Bank and a Small Bank/Credit Union?
Big bank: A big bank is a major banking company such as Bank of America or Chase who are well known across the country and funds major national or international projects. They can also be known as large banks.
Small bank: A “small bank” is a banking company who may be well known in your local area such as BAC bank or Bank of Stockton in the Bay Area. These banks aren’t known nationwide or worldwide and usually support and fund local projects for economic development. They can also be known as community banks.
Credit union: A credit union is like a “small bank” and focuses on a certain demographic of people which would be the location you live in or maybe the type of job you have. All members are part owners in the credit union, and they normally help support economic development in their local area or focus.
Pros and Cons?
Each banking category has their pros and cons. It is a momentous decision when deciding which bank to use for your checking and savings accounts and to borrow money from when buying a car, house, starting a business, or seeking advice from. Please use this list with your own research to help pick with bank you will begin your adult financial life with:
Credit unions are like small banks, but they are owned by all members and one person’s savings may go towards another person’s mortgage. These banks focus on people living in the same area or in the same industry.
Please always do your own research based on your local options and use this as a basic guide towards an idea for deciding. Don’t forget to check out our other articles on personal finance and use our consulting service to pick the best bank for your needs. Have fun finding suitable bank(s)!
Written by Ian Cohen