Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

The $42B Question: Why Aren’t Americans Ditching Big Banks?

wsj.com

Post reply on HN
Print view View original

11–20 of 30 posts

Re: The $42B Question: Why Aren’t Americans Ditching Big Banks?

#11

Post by PaulHoule »

phil21 wrote: post #9
PaulHoule wrote: post #3

Alternately there is the question of why Americans open accounts with the likes of Wells Fargo when you get better service from credit unions and regional banks. I bought stock in a regional bank that went through the 2008 crisis with hardly any drop in stock price, pays solid dividends, has beat the pants off Goldman Sachs from the viewpoint of the investor, but they also do well by their customers, community and em…

> Alternately there is the question of why Americans open accounts with the likes of Wells Fargo when you get better service from credit unions and regional banks. In my case, they have been demonstrated as too big for the government to allow to fail. Smaller banks have not. That moral hazard is why I still keep accounts with big banks.

They are all insured with the FDIC or NCUA. My parents banked with Merchant's National Savings Bank in Manchester, NH -- there was a lot of turbulence in banking in that area and it failed, got merged with another bank and the process repeated at least five times in the 1980s.

The service was seamless throughout all of that with the strange detail that they got a letter from the bank when their mortgage was a year from ending that said their payment had been miscalculated and they owed more money. I told my mom that she could contact the state regulator and in the end the bank backed down and even let her off the hook for the last three payments!

Later on I had an account at an S&L in Socorro, NM and that S&L failed during

https://en.wikipedia.org/wiki/Savings_and_loan_crisis

and got rolled into another S&L which was mostly a matter of the name changing and going to a different branch.

Re: The $42B Question: Why Aren’t Americans Ditching Big Banks?

#12

Post by PaulHoule »

Taikonerd wrote: post #10
PaulHoule wrote: post #3

Alternately there is the question of why Americans open accounts with the likes of Wells Fargo when you get better service from credit unions and regional banks. I bought stock in a regional bank that went through the 2008 crisis with hardly any drop in stock price, pays solid dividends, has beat the pants off Goldman Sachs from the viewpoint of the investor, but they also do well by their customers, community and em…

> when you get better service from credit unions and regional banks. Anecdote: I have an account at a credit union connected to my wife's job. They've been really hard to work with. When my wife lost her ATM card, it took like 4 different phone calls to convince them to mail a new one. When I tried to get new checks with our new address on them, that was hard too. They have an Android app, but it's buggy. Generally,…

I'd grant that what I like about my credit union is going to a branch. Big banks often do better with online banking and it is hard to beat the likes of Capital One and Citi for credit cards although lately there are programs that make it possible for small banks to offer reward cards.

Re: The $42B Question: Why Aren’t Americans Ditching Big Banks?

#13

Post by young_breezy »

johnthuss wrote: post #4

"People also are willing to pay for convenience and simplicity" This is my reason for primarily banking at one of the large banks. I have my mortgage, checking and savings accounts all in one place and the physical bank and ATM is less than a mile away. That said, when I do have a large amount in savings I do move it to an online savings account with better rates.

So you have a single point of failure

Re: The $42B Question: Why Aren’t Americans Ditching Big Banks?

#14

Post by S_Bear »

PaulHoule wrote: post #3

Alternately there is the question of why Americans open accounts with the likes of Wells Fargo when you get better service from credit unions and regional banks. I bought stock in a regional bank that went through the 2008 crisis with hardly any drop in stock price, pays solid dividends, has beat the pants off Goldman Sachs from the viewpoint of the investor, but they also do well by their customers, community and em…

When you have to move around a lot, having a big national bank makes it easy to not have to switch your accounts every year. I spent the majority of my 20s/early 30s bouncing around from city to city and there was always a Wells Fargo. Now that I'm settled, I transferred to a local bank.

Re: The $42B Question: Why Aren’t Americans Ditching Big Banks?

#16

Post by lotsofpulp »

At Bank of America, you can get FDIC insured savings rates similar to high yield savings accounts via their preferred deposit savings account in Merrill Lynch.

https://olui2.fs.ml.com/Publish/Content/application/pdf/GWMO...

The big catch is that you have to open it with $100k, but after you open it, you can reduce it to any amount you want and add back however much anytime.

Might be useful for those wanting to keep platinum honors status with BoA.

Re: The $42B Question: Why Aren’t Americans Ditching Big Banks?

#17

Post by lotsofpulp »

jmugan wrote: post #15

One thing I like about Bank of America is their app and website are both really good. I have another account with a small bank and I continually have problems with the website being janky.

BoA’s killer feature for me is they allow multitude of emails and phone numbers for 2FA, as well as separate logins for spouses that show joint accounts in both logins.

So wife and I can have both our emails and phone numbers so we can access all of our joint accounts without the other person having to tell them the 2FA code.

Re: The $42B Question: Why Aren’t Americans Ditching Big Banks?

#18

Post by derbOac »

This has me asking myself "why aren't I ditching a big bank?"

I have accounts with multiple financial services companies including a local credit union and a large bank, among others.

I did prefer the credit union in terms of many of the rates etc and customer service.

However, the transferability across states and countries is a no-contest with the big bank. We moved out of state and the transition with the big bank was invisible; with the credit union (who we still have an account with) it would be really difficult to maintain day-to-day use. Even when we lived in the same area as the credit union, things like debit/credit card fees and whatnot were not comparable between the two.

So both have their perks; they're just structured differently.

Re: The $42B Question: Why Aren’t Americans Ditching Big Banks?

#19

Post by PopAlongKid »

Few of the comments so far seem to take into account the main point of the article, which is about savings interest rates and how stingy the big banks are.

I keep just the minimum average balances in my checking and savings to avoid monthly fees. (for example, $3K combined check/savings at Citi, $1.5K checking at Chase). All my excess cash/emergency fund is either in CDs or I-bonds at higher interest rates.

As to the bigger question of why I would open accounts at these large banks in the first place (when I also have a local credit union that has served me well for over 30 years with savings and several loans), none of the banks where I am now are the ones I opened the account with. Every single one started at a smaller local or regional bank and then got taken over by some other out of state/big bank, sometimes more than once. Even Wells Fargo is no longer the original bank I started with, even though they kept the name, it was taken over by some out of state bank several decades ago as I recall.

As a result, I have simply drifted into a relationship with these big banks because I was passively transferred.

Re: The $42B Question: Why Aren’t Americans Ditching Big Banks?

#20

Post by rocket_surgeron »

>“I’m old fashioned. I like to be able to see my money,” Mr. Kvendru said. “With brick-and-mortar banks, you have that feeling that it’s not going anywhere.”

I haven't been inside a bank since 1997, when I opened an account with USAA. Since then I've moved on to other online-only banks.

Since 1997 I've had mortgages, personal loans, home equity loans, multiple car loans, credit cards, CDs, and a myriad other banking and investment services and never been face to face with a bank employee.

The only time I ever even slightly thought about physical banks was when I started wanting ‎Sacagawea dollars to pay at neighborhood lemonade stands (I used to love getting Kennedy half-dollars at my childhood stand, but inflation's a bitch...).

The very, extremely, low premium I pay to order Sacagawea dollars from the Mint is more than offset by the 3% I get on my savings account by not using a brick-and-mortar bank.

What are people doing in those bank buildings?

I do not understand.

Post reply on HN