Best national banks of April 2024
This article was originally written by Dori Zinn, Ashley Barnett and Taylor Tepper for USA Today and can be found on their website here.
Click here for the list of the top national banks of 2024.
What is a national bank?
A national bank is a financial institution that is chartered and regulated by the Office of the Comptroller of the Currency, vs a state banking agency. It is required to be FDIC-insured and belong to the Federal Reserve.
Most national banks are banks that are available to consumers nationwide. However, some banks are only available in a particular state or within a local community. Many of our best bank picks are online-only institutions.
“National banks primarily center their operations around Wall Street and tend to have a broader geographic reach, catering to a national scale,” said Javier Palomarez , the President and chief executive of the United States Hispanic Business Council (USHBC). “On the other hand, regional, local or community banks place a greater emphasis on Main Street, focusing on specific regions or communities.”
Jacqueline White, the President of i2c Inc., says because of the different communities they serve, the type of bank you choose matters.
“National banks have a widespread presence, operating across the country with a comprehensive network of branches and ATMs,” White said. “Local community banks concentrate on meeting the needs of local communities [and] having a deep understanding of local market conditions.”
Pros and cons of national banks
National banks come with a range of upsides and downsides. And what you’re looking for in a bank can influence how good or bad they are.
Pros
Accessibility. Having access to your account no matter where you are is a huge draw for national banks. “[A] wide reach makes [national banks] accessible across various regions, which is particularly convenient for individuals who travel or relocate often,” White said.
Money is protected no matter what. Because national banks are holding onto a lot of cash, the government tends to favor them in case of something drastic. “They often have a higher likelihood of receiving government bailouts in times of financial crisis,” Palomarez said.
Diverse products. Many national banks want to be your one-stop banking shop, whether it’s for personal, business or both. “They offer a diverse range of financial products, encompassing international banking options, and are typically equipped with more sophisticated online and mobile banking technologies,” White said.
Cons
General, not personalized service. Most times, national banks tend to have answering services that hold you back from talking to a real, live person. “National banks may provide less personalized service compared to community banks, often lacking that individual touch,” White said. National banks have a lot of customers and are holding onto a lot of money. This impacts how they treat those who bank there.
More (and maybe higher) fees. While fees vary from bank to bank, White says you’re more likely to face higher fees when banking with a national institution compared to a local one. They also have less flexibility compared to a community bank and if you ever run into an issue or concern, it’s local banks and credit unions that might be more willing to work with you.