Consumers more satisfied doing business with credit unions, online banks, and smaller banks, survey shows
Customers of credit unions, banks operating mostly online, and smaller banks were more satisfied with their overall banking experience than those who do business with one of the nation’s four largest banks: Bank of America, Chase, Citibank, and Wells Fargo, according to a survey by Consumer Reports.
Consumer Reports surveyed more than 49,000 subscribers about their banking experiences including customer service, bank communication, consumer complaints, and fees.
In the survey, credit unions and primarily online banks were among the highest-rated services Consumer Reports has ever evaluated, with 93 percent of their customers highly satisfied on average. The Navy Federal Credit Union, available worldwide, and USAA Bank, Schwab Bank, and EverBank, which operate online, were among the highest scoring in the ratings.
Seventy-seven percent of respondents said they were highly satisfied with the service provided by smaller traditional banks that are more community based and tend to focus more on customer relationships. Frost Bank, based in Texas, was top-rated among smaller banks, and Umpqua, which operates mainly on the West Coast, was praised for its practices that connect its customers in ways beyond banking.
While the experience that credit unions, online, and smaller banks provide may be more satisfying overall, choosing one of the big four banks – Bank of America, Chase, Citibank, or Wells Fargo – may be the best option for those who appreciate their nationwide reach and convenience of many branches, said Consumer Reports. Doing business with them can be pricey, but overall, those surveyed were satisfied with them in general.
“The good news in banking is that no one has to settle for merely acceptable service and that there are more options for the previously underserved,” said Jeff Blyskal, senior editor at Consumer Reports. “Consumers who were unwilling or unable to open bank accounts because of high fees and minimum balance requirements now have more options than they may realize.”
How to maximize savings
Having a “product bundle” such as a checking and savings account, along with other financial products such loans, at the same bank may provide benefits – preferred interest and fee discounts. However, shopping around for the different services from a number of financial institutions can result in a better deal overall.
Consumer Reports has designed a plan that can help customers get the lowest fees on services and the highest interest rates possible. Here are some examples:
- Open basic checking and savings accounts at a credit union that is a member of a network giving its customer access to fee-free ATMs and online and mobile account access. Check mycreditunion.gov to find out about membership eligibility.
- Shop online for credit cards and mortgages because the market for them is national, with lots of competitors. Customers who confine their search to the bank where they have their checking account are limiting their options.
- Compare Internet rates for certificates of deposit at virtual banks rated by Consumer Reports and at credit unions. Both types of institutions tend to pay the highest rates.
The survey, “Choose the Best Bank for You,” is described in the January 2016 issue of Consumer Reports and at ConsumerReports.org.
Along with ratings more than 100 institutions, the article outlines the pros and cons of credit unions, big banks, mostly online banks, and smaller regional banks. It also features a guide for switching financial institutions, advice for keeping bank accounts secure, and other banking information.