Article: What Happens to the Money You Deposit at Your Community Bank?

Choosing a bank is a very personal decision. Large banks and community banks offer many of the same services, but the latter has a stake in your town that big banks do not. When you put your funds in a community bank, much of that money goes back to your neighbors, in the form of loans, lines of credit, and home financing. Here are ways community banks make a difference where you live in a way that happens less often with a large financial institution.


Job Creation

Local businesses can find loans or receive lines of credit from a local banker who is familiar with the products or services involved. With these loans, small businesses can expand and hire workers. More than 50 percent of the American private workforce is employed by a small business. These enterprises are the bedrock of our economy, but loans to small businesses are not big bank priorities. The money used to fund businesses stays in the community, helping to enhance the local economy. Just as you may try to “shop local,” it is also vital to consider banking local.


Contrast that with large banks, which invest money more speculatively, with an eye on Wall Street. No matter where they are situated, such banks do little to aid the local population. It is more likely money invested with a large bank will end up going out-of-state than anywhere near your town. Rather than speculate, community banks put your deposited monies to work making productive investments.


Neighborhood Improvement

Local bankers know the area and provide considerable financial assistance for residents via the approval of mortgages and home improvement loans.


Support Local Organizations

Community banks support community organizations, ranging from youth sports teams, local non-profits, and school scholarships and other programs. They may step up to host or contribute to special fundraisers when those in the community are in need.


In addition, banks may encourage employees to get involved in volunteering with local charities. That might consist of working at particular events, ongoing fundraising, or serving on nonprofit committees and boards. It is all a part of giving back to the community.


Lower Costs

Community banks generally charge less for the same services as big banks. Such banks may offer better interest rates for savings, and lower interest rates for borrowers. Their mobile banking services are on par with those of large banks.


Along with lower fees, customers receive more personal service from local banks than giant ones. First-rate customer service can make all the difference in the banking experience – and more than make up for a few dollars’ difference in interest.


Community Health

Yes, local banks may support community health efforts, but they are also inseparable from the overall health of the community. Community banks thrive when their towns are thriving, and by providing local capital, they can make the difference between a town that succeeds and one that is falling behind.


At your community bank, decisions are made by local employees, not those unfamiliar with your town or working hours away. That means an applicant who may not qualify for a loan at a big bank could receive one from a local bank, as these bankers are more familiar with them or may know their references. They build a working relationship with clients, so it is more of a holistic approach rather than a big bank’s criteria of one size fitting all. The local banker can make a quicker decision regarding an application than when dealing with a big bank, in which the determination of whether to approve a loan could involve quite a few people in the chain of command. Healthy, vibrant communities turn out that way largely due to the influence of local banks.


Find Out Firsthand

Here at Prairie Community Bank, you can see these differences firsthand by visiting one of our branches – in Marengo, Union, and Elgin.  Find out why we’re known for our service, and ask us how we’ve reinvested in our communities lately.