Should You Choose A Large or Small Bank?

Banks have become central to our everyday lives. Not only do they help us gain access to our money and offer safety deposit boxes but most banks now offer credit cards, home mortgages, investments, and car loans. What key factors went into you deciding to go with your current bank? Was it a referral, convenience, popularity or did you just chose a random institution because you happened to drive by it on your way home from work?

Photo by vladru/iStock / Getty Images

Photo by vladru/iStock / Getty Images

The truth is many reasons should go into one choosing to bank with one institution over another. Of the multiple elements that are a part of the decision-making process, the price is likely to be one of the biggest. Banks that offer free checking should always be high on the list of choices. The next biggest part of deciding which bank to choose should be convenience. An institution that has many locations is ideal because you will never be too far from accessing the services you need.  `

So should you choose a small bank or a large bank? Both banks have pros and cons and you may be of the belief that a bank is just a bank.  

Large Banks


  • More Branches

  • Broad array of tools and services

  • Better technology


  • Higher fees for loans and checking accounts

  • May need to make appointments for more detailed services and these banks tend to have higher turnover as a result of their size and corporate structure.


Small Banks (Community Banks)


  • Fewer fees compared to larger counterparts on auto and home loans. While many offer absolutely free checking.

  • Custom service. Many of these banks offer boutique type service as a result of being small. Many of these institutions see themselves as part of the community.

  • Better lending flexibility. Investors may be able to score a sweet deal on interest rates and creative financing that many larger institution may not be able to offer.  


  • Fewer services. Many large banks serve as one-stop financial shops. Smaller banks often times lack resources to provide the variety of services.

  • Fewer locations. Smaller banks likely lack the national presence and may not be available to you when you travel.  

The Verdict: When deciding to go with a large or small bank, everyone should have both! It is a good idea to do everyday banking with the local branch to take advantage of lower fees for their services. However, you should have the same accounts with large banks regardless of how frequent you may choose to utilize this institution. If you will be traveling you can reassure you will be able to access money and services of the bigger or more brand name banks.