With over 4,844 FDIC-insured commercial banks in the US, you may be surprised that none has locations in all fifty states. However, that shouldn’t stop you from banking with any top ones nationwide. These banks still have a broad reach when you include their online services.

If you plan on opening a new account, there are things you need to consider before making that initial deposit. One is the bank’s number of branches, which you’ll learn in this article.

Knowing how these banks measure up is always best before picking one.

Key Takeaways

• JPMorgan Chase has branches in all 48 states and has more branches in the US than any other bank.
• Bank of America is one of the best options for those who value ease of access over higher interest rates.
• In terms of branch count, Wells Fargo is the largest in the country.
• Local banks offer lower fees, relationship-based banking, and personalized products and services.
• If you want to keep your money safe while still having easy access to your funds, you may want to try opening a checking account.

5 Banks with Locations in Nearly Every State

The banking system is one of the most vital features of a successful economy. In the US, multiple banks offer a wide range of services. 

The following banks have locations in more than a third of all the states.

Each bank’s broad reach and services are attractive.  Here’s a closer look at the location and the services:

Chase Bank

As one of the banks in the world, Chase has established over 5,300 branches across 47 states and one in Washington, DC. Alaska and Hawaii are the only states where this bank isn’t physically present. 

Its most considerable number of branches are scattered across the following states: 

• California
• New York
• Texas
• Florida
• Illinois

Chase is also the best bank for frequent overdrafts. This happens when your bank allows you to transact from your account despite insufficient funds.

An overdraft fee is a way to offset the risk financial institutions take by allowing clients to spend money they currently don’t have. If you still wonder why banks charge overdraft fees instead of deducting the money lacking from the next deposit, find out here: Why Do Banks Charge Overdraft Fees?

Bank of America

With 38 US and Washington DC locations, Bank of America has over 4,000 branches. It has the most ATMs nationwide: approximately 16,000 of them. It also has the most business in California, with over 800 branches. 

Aside from California, it also has East Coast and Texas locations. Today, this bank is the third largest in the country by branch count. 

Bank of America is best for those who value ease of access over higher interest rates. It’s also an established bank with many deposit and lending products. 

Bank of America started as “Bank of Italy.” It all began when Amadeo Giannini founded the Bank of Italy in San Francisco in 1904. Initially built to serve working-class citizens in the area, the bank grew drastically and became Bank of America in 1930.

Wells Fargo

Classified as a commercial bank, Wells Fargo is the largest in the country by branch count. It operates almost 4,599 branches scattered across 37 states. It has the most branches in these states: 

• California
• Texas
• Florida
• New Jersey
• North Carolina

No wonder MoneyRates, a reputable financial wealth website, voted this bank the best for its extensive network.

Wells Fargo wasn’t a bank first. Founded in 1852, the company initially provided delivery services to people in California during the Gold Rush. They bought what remained of the Pony Express, which set off between Missouri and California.

PNC Bank

Present in 28 states and Washington D.C., this bank has more than 2,629 branches. PNC has the most branches in these states:

• Florida
• Ohio
• New Jersey
• Pennsylvania
• Texas

MoneyRates rate this bank as the best one for checking accounts, namely its PNC Bank Standard Checking.

One of the most critical steps in managing your money is deciding where to keep it. A checking account lets you deposit and withdraw money easily to purchase or pay bills.

US Bank

US Bank is present in 26 states with over 3,067 branches. It also boasts over 4,700 ATMs. You can find most of its branches in the following states:

• California
• Illinois
• Ohio
• Missouri
• Washington

It is one of the best-known banks in the West and Midwest, and both iPhone and Android users highly rate its mobile banking via its mobile app.

Helpful Article:  Check out this article to glimpse how big the mobile banking app market is in 2023:  Mobile Banking Statistics in 2023: Are Physical Wallets Now Obsolete?

Local vs. National Bank

Though no bank is present in all fifty states, the ones above are more than enough to serve you. You might wonder if it’s better to bank with a national bank than a small, local one.

In the last part of this article, you’ll learn the differences between the two types to help you pick the best choice for your business.

Local Bank

If you plan on starting a business, big or small, opening with a small local bank might be the best idea. 

Here are a few benefits of banking locally:

• Lower Fees: Local banks offer free accounts and lower fees. 
• Personalized Attention: Local banks typically take time to give clients individualized attention.
• Higher Ethical Standards: Policies of local banks and employee behavior directly affect the local community.
• Local Decision Making: By serving a smaller region, local banks can customize their services and products to align with the need of their community.
• Local Connections: Local banks are vital for networking opportunities, providing access to contracts that boost the local economy and grow businesses.
• Collaborative Lending Process: Community banks team up to offer small business administration loans for working capital, debt refinancing, real state purchases, and more.

In 2016, JPMorgan Chase’s CEO, Jamie Dimon, also wrote about the same thing surrounding community banking:

National Bank

Megabanks are typically more accessible because they have more ATMs. Some banking products they offer are the following:

• Savings Accounts
• Checking Accounts
• Money Market Accounts
• Credit Cards
• Personal Loans
• Mortgages

Although they significantly offer higher fees, they ensure financial stability and supervise the financial system. Other than that, they also:

• increase the productive capital of the country by adding to the artificial capital in the credit of the Bank.
• quicken circulation from the preceding cause from the inception of banknotes as money.
• assist industry and trade.
• facilitate the payment of taxes

Choosing one over the two depends on what you need from your bank. Otherwise, you may want to check out credit unions, which offer lower fees than banks.

The global market capitalization of the banking industry grew by €7.3 trillion during the first quarter of 2021.

Bottom Line

Not being physically present in all fifty states has never hindered the services these banks provide to their customers. Knowing your goals, lifestyle, and preferences is crucial to know which bank will be the best for you. 

If you’re frequently traveling to a different state, know if communicating with a teller face-to-face is something you can’t do without. Otherwise, mobile banking, especially with Cash App, can do wonders for your banking needs.

FAQs on Banks with Most Locations in the US 

What other banks have many locations?

Truist Bank and Regions have locations in 15 states, while T.D. Bank is present in 16. You can also choose Bank of the West or First Citizens Bank in 19 states. 

Can I bank without going to a local branch?

You might be okay not going to a local branch if you can do all your banking online. Ensure your bank has a robust online presence and excellent customer service via phone or chat.  

What are the best national banks?

It depends on what you’re looking for. While some people may prioritize a bank’s vast network of branches and ATMs, others choose banks depending on the interest rates and fees.

List of Sources:

• Market Place
• Money Crashers
• List of All Banks in US
• Bankrate
• Crediful
• Investopedia
• Moneyrates
• Moneymylife
• Sapling
• Bankbound
• Founders Archives
• Forbes Advisor

The post Banks With Branches in All 50 States: A Full List appeared first on Balancing Everything.

If you’re familiar with the real estate market and want to kick your investing strategy up a notch, then the BRRRR method might be just what you’re looking for. Standing for Buy, Rehab, Rent, Refinance, and Repeat, this proven strategy allows you to grow your portfolio while offering a high-quality property for your renters. The boosted value of the property means that you can command greater rents than you could in its original state, and you can use each property as a launchpad for your next investment. Let’s take a look at the steps necessary to get started with this well-respected and highly successful method of real estate investment.

Step one: Set your investment criteria

In order to streamline your search, you need to have a strategy in place, or you’ll simply be picking at random and may not select the most promising investment. Factors you should consider are the timeline and sum of your desired return on investment, the monthly cash flow you need, the general location you’re going to search, and what type of real estate property you will be considering.

Step two: Get financing

For the BRRRR method, you’re looking at distressed properties, which means that you may not be able to secure a conventional loan through a bank. This gives you several other options: a DSCR loan through a private lender, a home line of credit, or covering the cost yourself. You should roll the cost of repairs into this, as doing so will both ensure you have the cash on hand to start right away and that you don’t go massively over budget with rehabilitating.

Step three: find, research, and purchase a property

This part of the BRRRR method, as you might expect, is the most complicated and involves the most work. Just as when purchasing any real estate, you need to identify possible candidates, perform due diligence, make an offer, and finally close the deal with the seller.

Step four: renovate the property

Before you begin to rent the property, you have to bring it up to an acceptable market standard, which includes fixing any code violations, installing or updating appliances, and adding amenities that will attract renters. Try to choose investments that cannot be damaged by tenants, then use low-cost but serviceable items for things like cabinets and doors.

Step five: find tenants

It’s essential that you perform due diligence on your tenants and that you charge a fair market price. Being a good landlord can be time-consuming, so you might consider hiring a property management company and subtracting this from your monthly profits, which is a common strategy for those who regularly use the BRRRR method.

Step six: refinance the property

After you’ve built up some equity and have a steady revenue with renters, it’s time to move on to the next step of the process, which is refinancing so that you can prepare for your next acquisition. Work with a mortgage broker or lender to get the property appraised at its new market value, then get a cash-out refinance mortgage to give you the funds for another property. Both the rental income and the appreciation will help you qualify for better terms than your initial investment, meaning that you save in the long run.

Step seven: repeat the process

With cash in hand, you can now start over by buying a new property, taking the same steps as you did for this first one. Over time, you can build up a sizable portfolio of profit-generating profits; should you need to downsize, you can sell off one of the properties while still maintaining the income from the others.

As with any investment, the BRRRR method is not without its risks

It’s important to note that this method of investing requires a great deal of research and risk: it’s a hands-on strategy that can pay off big, but it’s vulnerable to economic downturns and issues with the individual properties you choose to invest in. You should try this strategy when you have a bit of cushion rather than starting on a shoestring budget; it’s also best if you familiarize yourself with the real estate industry first so that you can identify promising properties and negotiate with sellers to get a good deal. Overall, this is a highly effective blueprint for the right investor, one which has been utilized by thousands of highly successful businessmen. With research and careful consideration, you can develop a hearty portfolio that will continue to generate income for years.

The post How to Invest in Real Estate With the BRRRR Method (Step-by-Step Guide) appeared first on Balancing Everything.

In this article, you will learn more about how users can maximize Cash App: one of the most popular peer-to-peer payment services in the market today.

Cash App’s Banking Partners

In collaboration with Sutton Bank and Lincoln Savings Bank, Cash App facilitates its users’ transactions through them. Depending on your location, it uses the routing numbers of one of these two banks.

Sutton Bank

Sutton Bank is a Financial institution in Ohio, United States. It is one of the country’s oldest banks that enables Cash App to offer prepaid debit cards.

This bank also makes the Cash App Visa prepaid card possible. This allows users to buy and withdraw money, as long as the account has enough funds. It is a virtual card but there’s an option to avail of the physical card. It’s similar to the virtual option as it contains a 16-digit account number. 

The card’s credit limit depends on how much money is available in your Cash App account. You are not allowed to exceed the funds through individual or series transactions. 

Suppose you want to check your transaction history for the prepaid card. In that case, you’ll need to use your Cash App account. Sutton Bank is not responsible for providing you with these details. 

Lincoln Savings Bank

Lincoln Savings Bank was founded in 1902 and is based in Iowa. Although the bank primarily serves customers through its physical branches, it also provides many online services. Cash App uses this bank for its direct deposit feature. 

Cash App and Lincoln Savings Bank began their partnership in 2018. This allows the mobile application to expand its banking service offerings. Without a banking partner, there wouldn’t be a Cash App as it doesn’t have a banking license.

You do not need to create an account with Lincoln Savings Bank to use Cash App to receive direct payment deposits. Through the app, you will be instantly issued a bank account. The app will also provide the routing information needed for direct deposit.

For direct deposits, here are the details:

• Lincoln Savings Bank
• 508 Main, PO Box E
• Reinbeck, IA 50669
• Member FDIC

Cash App Direct Deposit Account & Routing Numbers

Enable Direct Deposits to regularly and automatically deposit your paycheck to your Cash App using your account and routing number or by getting a direct deposit form.

To use your account and routing number:

• Tap the Money tab on your Cash App home screen
• Tap the routing and account number below your balance
• Use the options to copy your account and routing numbers
• Provide the account and routing number when prompted for a bank account during direct deposit setup

To get a direct deposit form:

• Tap the Money tab on your Cash App home screen
• Tap Direct Deposit
• Select Get Direct Deposit Form
• Fill out your employer information, the amount you would like to be deposited from each paycheck, and provide your signature
• Select Email Form and enter the recipient address before tapping send

Your completed direct deposit form can be viewed at any time by tapping “Get Direct Deposit Form” from the “Money tab” and selecting “View Previous Form.”

With the cash App direct transfer, you can get up to $25,000 every direct deposit and up to $50,000 in 24 hours.

Bottom Line

Linking your bank account to different third-party finance apps does make some wonders: hassle-free payment, more convenience when transferring funds, and in some cases, some banks waive monthly maintenance fees when you connect to another account. So might as well give it a try.

FAQs

Can I use Cash App Pay in my country?

Yes, you can. But only if you reside in the United States or the United Kingdom. The payment app only allows you to transfer money from one US or UK bank account to another, meaning both the sender and the recipient must have US or UK bank accounts.

Does Lincoln Savings Bank own Cash App?

No. Lincoln Savings Bank only provides banking services to the app’s users. Cash App is owned by Block Inc, formerly known as Square Inc.

Why is Cash App not considered a bank account?

Because it is not a deposit account at a chartered financial institution, Cash App is not considered a typical bank account. It is instead a payment software that allows users to save money, transmit payments, and access extra financial services such as the Cash Card.

Does Cash App Have a Debit Card?

The Cash Card is the Cash App’s debit card. It functions similarly to any other bank-issued debit card and is accepted everywhere Visa is accepted.

Is there any limit to how much I can send and receive on my account?

Cash App allows you to transfer up to $250 in each seven-day period and receive up to $1,000 in any thirty-day period. You can raise these restrictions by validating your identification with your full name, date of birth, and the last four digits of your Social Security Number.

Sources:

• Bankrate 
• ZDNET
• INSIDER
• TOP MOBILE BANKS
• FindABetterBank
• Cash App
• The Healthy Journal
• SuttonBank
• MARKET REALIST

The post What Bank Does Cash App Use? appeared first on Balancing Everything.

If you are looking for the safest banks in the U.S. to deposit your money, then this article is for you. Here you’ll gain insight into the safety features of the following banks: 

• U.S. Bank
• Bank of America
• JPMorgan Chase
• PNC Bank
• Citibank
• Wells Fargo
• Capital One 

7 Banks And Their Security Features

These seven banks share some tight security features with each other and a few have their own unique safeguards. Let’s start with the largest bank on the list.

JPMorgan Chase

Chase has been in the banking game for the longest time. Founded 224 years ago in September 1799, it has $3.7 trillion in assets as of 2022, over 4,700 branches, and more than 16,000 ATMs. 

Security features include:

• Transaction alerts for suspicious activity
• Two-factor authentication.
• Controlled access to your information by third-party websites

Publication giant, Global Finance, ranked Chase in the top 10 safest banks in the country in 2022. They have put up better safeguards after a massive data breach affecting 76 million households in 2014. Included in these safeguards are a $250 million yearly investment in cybersecurity and the employment of 1,000 personnel to oversee its systems.

Bank of America

This bank is the second-largest in assets worth over $3 trillion. It has over 3,800 branches and 16,000 ATMs. Its Advantage Plus Banking has several security features including:

• Fraud monitoring
• Total Security Monitoring®
• Online and Mobile Security Guarantee

With Total Security Monitoring, Bank of America provides you with account custom alerts, debit card controls, and safe mobile deposits. With online and mobile security, you are never liable for unauthorized transactions as long as you report them immediately.

Wells Fargo

Wells Fargo has headquarters in San Francisco and New York City with a vast banking system. It operates well over 4,900 branches and 12,000 ATMs. As of 2022, it has $1.9 trillion in assets. 

Like Chase, Wells Fargo has a standard yet solid two-factor authentication and transaction alerts. They also allow you to:

• Turn your cards and digital numbers on and off
• View recurring payments
• Control third-party access to financial statements

One feature unique to Wells Fargo is the biometric sign-on and voice verification, which are very secure ways to confirm your identity. 

Citibank

Despite having formed only in 1998 after a merger between Citicorp and Traveler’s Group, the multinational investment and financial services bank, Citigroup is one of the big four banks in the country. Citibank is its consumer-facing bank.

With over 70,000 ATMs, more than 700 branches nationwide, and even more abroad, Citigroup has $2.381 trillion in assets in 2022.

Just like other banks, its security is reliable. They offer these features:

• Customer liability protection
• Account alerts
• Turn cards on/off
• Have two-factor authentication
• Data encryption

PNC Bank

PNC is another bank with a long history starting in 1852. Its headquarters are in Pittsburgh, PA, operating over 2,600 branches and 9,000 ATMs. Its assets are at $559 billion.

Like other banks, it uses data encryption to safeguard your banking information. Other safeguards are:

• Security questions
• Two-factor authentication
• Customer reporting of suspicious activity

PNC also offers a variety of resources for safe banking practices.

U.S. Bank

Also referred to as U.S. Bancorp, it provides a set of identity authentication features many customers rely on: 

• One-time passcodes
• Biometrics
• Visual patterns

Just like other banks, they use data encryption. They also allow you to report suspicious activity and provide valuable resources to prevent fraud. U.S. Bank is the fifth-largest in the country, with over 2,000 branches, more than 4,800 ATMs, and a record $601 billion in assets. 

Capital One

A newer bank formed in 1994, Capital One has grown significantly, with $455.2 billion in assets as of 2022. Because it is an online-only bank, it only operates 299 physical branches. Yet, one should be aware of its online system. You can safely do a lot using its mobile app. And there are more than 70,000 ATMs ready to serve you.

Capital One’s security features include the following:

• Account alerts and monitoring
• Turning your card on and off
• Two-factor authentication
• Setting up virtual cards to avoid using your real numbers online

These security details will help you choose which bank to flock to. 

Another two critical parameters are whether or not the FDIC insures your bank and if they refund your money when there’s a breach.

FDIC-insured and Money-Back Guarantee  

The FDIC will protect your money in case something happens to the bank. Your deposits of up to $250,000 are safe.

Next, check if the bank will refund your money if someone accesses your account without your consent and if they will return it immediately. Here’s how each bank performs using those standards.

Bank	FDIC-insured	Money Guaranteed Against Unauthorized Access	Next Day Cash Reimbursement
U.S. Bank
Bank of America
JPMorgan Chase
PNC Bank
Citibank
Wells Fargo
Capital One

Your money will be insured if you store it in any of the banks listed, but Bank of America and Chase are the only ones that will reimburse your money overnight when you promptly report unauthorized access. 

Another factor to consider is the size of the bank. Larger banks are generally more secure because they are older and have more experience dealing with financial crises and other difficulties. When compared to smaller ones, the government is more likely to assist them in times of need.

Also, larger banks have more resources, sources of income, significant reserves, and options when recovering from a loss. As such, you can rely on the “big four” banks: Chase, Bank of America, Wells Fargo, and Citibank. But it’s also safe to bank with the others on the list.

Final Thoughts

Overall, data on bank safety is not widely available in the country. Bank personnel will be suspicious if you ask them a lot of questions. The parameters we’ve used here could help you decide on the bank for you. Still, take some time to see what other customers are saying about the bank you have in mind. Sites like Better Business Bureau, Trustpilot, and others can help you. 

FAQs 

Are national banks safer than local/smaller banks?

It’s not a general rule that national or bigger banks are safer. Regardless of size, if your bank has a formidable security system, it determines how secure it is. 

What other security features does my bank offer?

One neat technology you will commonly see now is the EMV chips on debit and credit cards. These little gold or silver chips are safer than the black magnetic strips at the back of cards.  

What else should I consider when choosing the safest bank for me?

Consider a bank’s customer service. Banks that are easy to contact at any time of the day are a good sign that they can take good care of you and your finances. 

Sources:

• NOMAD CAPITALIST
• usbank
• PennState
• Fair Shake
• CreditDonkey
• CreditDonkey
• the ascent
• mybanktracker
• mybanktracker
• The Guardian

The post The 7 Safest Banks in the U.S. appeared first on Balancing Everything.

In this article, you’ll discover how Venmo appears on a bank statement and what to do with unknown transactions. 

What Do Venmo Transactions Look Like in A Bank Statement?

Venmo allows you to pay and request money from people you know. You won’t have a hard time seeing which transactions are Venmo ones in your bank statement, but note that not all will appear in it. 

If you use your Venmo account, which includes a transaction via your bank account, that will usually show up on your bank statement. But if you only used the app without using your linked bank account, it will not reflect on your bank statement.

The bank will label “Venmo” only those transfers or payments you made within the app which dealt with your bank account. They won’t include the names involved in the transaction since it needs to uphold the security and privacy of your Venmo transactions. 

Here’s a sample scenario to understand which transactions will reflect on your bank: 

Scenario: You buy coffee and pastries worth $10:

a) You want to pay for it using your Venmo wallet, but it only has $7.

b) You transfer cash from your bank account to your Venmo. 

c) Then you pay for what you bought using your Venmo wallet. 

d) You will see this transaction in your bank statement later on.

This process is straightforward and will appear in your bank statement since your bank is involved in the transaction. If you have $10 in your Venmo wallet, you can quickly pay using the app, and your bank will not record it since it is not involved.

There’s another scenario where a Venmo transaction will show up in your bank statement even if you don’t have an account with Venmo at all. Let’s see it below. 

Steps To Determine Unknown Venmo Transactions

Following the steps below will help you resolve these unanticipated transactions.

1. Verify Transactions

Verify that the transaction isn’t from any of the individuals below:

• a family member
• a close friend
• other members of the household

They might have had permission to use your financial accounts to transact via Venmo.

2. Contact Your Bank

If you’re sure the transaction is unauthorized, most likely, someone has opened an account in Venmo using your personal and financial information. There are a few things that you can do: 

• Change your online banking and financial services passwords

• File a dispute
• Request a new card number or bank account number

Your bank usually provides these services to you.

3. Allow Your Bank To Guide You

Have your bank walk you through the dispute process so that you won’t find it hard to get your funds back. Just make sure to understand what is going on and what your bank and Venmo will require of you. The steps are:

• The bank will file a claim with Venmo for the amount you lost
• They will reimburse you for your loss

Please work closely with your bank; they are your best contact in this situation. It’s the only way to secure your financial information.

Final Thoughts

Some complexities can involve monitoring and managing your Venmo activities, especially if you detect unauthorized activity. But overall, how those activities will appear on your bank statement will be pretty straightforward if your money and personal information are safe and secure.

FAQs 

Can I know who used my information on Venmo?

Unfortunately, Venmo won’t be able to reach that far to see who made the breach. Due to their privacy policy, they can only provide information related to your account. 

How Can I See My Transactions on Venmo?

It’s easy to see this list by looking for the transaction history or statement on the Venmo app. Then select the single-person icon and go to the “You” tab. You’ll see your whole history there, which you can download as a CSV file.

On the other hand, if you are using the website, sign in using your email address and password. You can view your transactions by selecting “Statement” under the menu below your profile picture. 

I Want To File A Case Against The Person Who Used My Information. How Can I Do That?

To pursue further action on a user who did not have the authority to use your information, you can file a police report and have law enforcement contact Venmo. Once Venmo receives the vital documentation, they will cooperate through the appropriate channels and follow through on the necessary actions.

Sources:

• VenmoGuide
• Venmo
• FRUGAL REALITY
• BANK CIF NUMBER

The post How Does Venmo Appear on Bank Statements? appeared first on Balancing Everything.

In this article, let’s look at the biggest banking institutions in the world that are ranked based on their total assets.

Industrial & Commercial Bank of China (ICBC): The World’s Largest Bank

• Revenue: $208.1B
• Net Income: $55.34B
• Market Cap: $173.9B

The largest bank in the world is ICBC, a Beijing-based financial institution. It was established on January 1, 1998. Industrial & Commercial Bank of China has developed into the top large listed bank in the world, possessing an excellent customer base, an overall business structure, strong innovation capabilities, and market competitiveness.

With a total asset of $5.54 trillion, the Industrial & Commercial Bank of China bagged first place in the world’s largest bank. This financial institution gives assistance to the following services: 

• Credit Cards
• Loans
• Business Financing
• Money management services for businesses and high-net-worth individuals

ICBC earned a revenue of $208 billion in 2022. This is $81.21 billion higher than the second largest bank, which is China Construction Bank.

Who Comes Next: Five Largest Banks After ICBC

Over the years, banks outside of the west have grown and have impacted the global economy. Here are the current largest banks in the world after ICBC:

China Construction Bank

• Revenue: $126.79B
• Net Income: $48.49B
• Market Cap: $148.5B

State-owned bank, China Construction Bank ranked second with a total asset of $4.76 trillion. With a comprehensive range of financial services, this bank provides three principal business segments: corporate banking, personal banking, and treasury operations.

The bank offers a range of financial products and services to corporations, government offices, and financial institutions, which consists of:

• Trade Financing
• Corporate Loans
• Agency Services
• Deposit-taking and Wealth Management Services
• Financial Consulting and Advisory Services
• Cash Management Services
• Custody Services and Guarantee Services
• Remittance and Settlement Services.

It represents inter-bank money market transactions, repurchase and resale transactions, investments in debt securities, and trade of derivatives and foreign currency.

This financial institution intends to strengthen its relationship with its corporate customers by focusing on industry leaders in strategic industries such as power, telecommunications, oil and gas, and infrastructures.

Agricultural Bank of China

Revenue: $202B

Net Income: $31.12B

Market Cap: $104.85B

Founded on July 10, 1951, and based in Beijing, China, the Agricultural Bank of China is the world’s third-largest bank by assets, having $4.6 trillion as its total asset and $202 billion as its total revenue.

ABC commits to vigorously developing green finance and firmly supporting sustainable development. It aims to have a critical step toward achieving the goals of “peak carbon dioxide emissions and carbon neutrality.” Thus, building modernization in the harmonious coexistence of humans and nature with the power of finance.

To be more specific, it is a bank that offers:

• Personal Banking
• Business Banking
• Investment Banking
• Cash
• Wealth Management
• Custody Payment
• Settlement Services
• Foreign Exchange Trading
• Financial Market Solutions
• Private Banking
• E-banking Products and Services
• Agro-business Banking

This financial institution also helps with things like deposits, financing, credit facilities, payments, settlements, cash management, trading, and investing. In addition to retail and commercial banking, ABC provides a full suite of financial services tailored specifically to the needs of the agricultural industry.

Bank of China

Revenue: $83.27B

Net Income: $22.64B

Market Cap: $125.71B

Bank of China has a total asset of $4.21 trillion among the largest China-based banks. It has been the sole bank specializing in foreign exchange transactions.

As China’s most globalized and integrated bank, it has a global service network with institutions across the Chinese mainland and 57 countries and regions.

It exhibits its high experience in hosting and undertaking large-scale events as it has been a banking partner of the following:

• 2008 Beijing Olympic Games
• Paralympic Games
• 2022 Beijing Winter Olympic Games
• Winter Paralympic Games
• Canton Fair and Shanghai Fair

As for its business segments, the Bank of China provides aid in personal banking, corporate banking, and bank cards.

This bank is also at the forefront of the Chinese government’s efforts to internationalize the yuan. Economically, it broadens the market in which they can engage by eliminating the need to convert currencies and suffer the associated transaction expenses. Companies can borrow in overseas markets without being exposed to exchange rate risk, perhaps allowing them to find cheaper capital.

JPMorgan Chase & Co.

Revenue: $123.42B

Net Income: $37.07B

Market Cap: $381.6B

With a history that traces its roots to New York City in 1799, JPMorgan Chase & Co. is in fifth place with a total asset of $3.74 trillion.

It is a leader in investment banking, commercial banking, financial transaction processing, and asset management. It serves millions of customers, predominantly in the U.S. and many of the world’s most prominent corporate, institutional, and government clients globally.

Its investment banking portfolio comprises banking solutions for a broad range of corporations, institutions, and governments, including mergers and acquisitions, capital raising, and risk management.

This financial organization provides financing, leasing, dealer floorplan, commercial banking, and treasury services. They also offer strategies across all asset classes, including equity, fixed income, alternatives, money market, ETFs, and multi-asset solutions.

The company aims to close the racial wealth gap and promote economic inclusion in the United States. Thus, more prospects for homeownership, more access to affordable housing, small business growth, and improved financial health for Black, Hispanic, and Latino populations across the country.

Mitsubishi UFJ Financial Group, Inc. (MUFG)

Revenue: $45.25B

Net Income: $10.06B

Market Cap: $81.57B

Settled in Tokyo, Japan, in April 2001, Mitsubishi UFJ Financial Group, Inc. is ranked sixth with a total asset of $2.98 trillion.

Serving major Japanese corporations seeking to expand globally, this business group provides loans, settlements, forex, and other services to help customers grow in their corporate value.

Mitsubishi UFJ Financial Group, Inc. provides various financial products and services to help clients reach their goals: transaction banking, loan syndication, structured finance, working capital solutions, and other services.

This financial institution provides cash management, trade finance, and ISO 20022 adoption and migration services for cross-border payments. It also provides syndication loans, cross-border syndicated loans, and samurai loans as services.

This business group has extensive networks in the United States and Southeast Asia. It also provides financial services to local SMEs and people in other countries through its partner banks, such as:

• MUFG Union Bank in the United States
• Krungsri (Bank of Ayudhya) in Thailand
• Bank Danamon in Indonesia

Bottom Line

ICBC rose to the top because of its aggressive strategies and large market reach. It has about 5 million corporate customers and 443 million individual customers. The bank also extensively expands to a wider horizon with 17,000 domestic and 399 overseas branches.

But despite the ranks, these banks provide a fundamental role in the world economy: make the money flow where it’s needed as it helps every company hire people, invest, and create an impact on economic development.

Sources:

• forbes
• INSIDER MONKEY
• UN environment programme finance initiative
• FORTUNE
• S&P Global
• China Construction Bank
• statista
• YCHARTS
• YCHARTS
• BANK OF CHINA
• statista
• Bankrate
• YCHARTS
• macrotrends
• macrotrends
• Global Ranking
• macrotrends
• macrotrends
• YCHARTS
• MUFG
• MUFG
• China Construction Bank
• NIKKEI Asia

The post Top 6 Largest Banks in the World appeared first on Balancing Everything.

If you’re looking for a bank to open a trust account,  this article will help you discover the best banks you and your beneficiaries can count on.

What Is Trust Account: A Brief Run-through

You can transfer legal title to a third party if you wish your children to inherit your possessions and assets. That’s how a trust account works.

• You (Grantor) –  the one who owns the properties, funds, and other assets
• Children (Beneficiaries) – the ones who will inherit the grantor’s possessions 
• Third-Party (Trustee) – someone else who is held responsible for managing the inheritance

It is an estate-planning tool that assists you in managing your assets throughout your lifetime and beyond. It allows you to create detailed instructions or specific conditions on how and when to distribute everything you worked so hard to fulfill.

Best Banks For Trust Funds

You might be afraid to set up an account for fear of getting lost, but it all makes a difference when the right banks get your back.

Below are the best banks to entrust your assets and funds.

Bank of America

Administration Fee: 0.45% and 1.40%

Minimum Balance: $20,000

Bank of America is the USA’s largest provider of personal trust services. Its approach in achieving a high customer satisfaction rate is to help them with the following:

• transfer wealth
• fulfill philanthropic goals
• minimize wealth transfer taxes
• maintain privacy
• protect assets
• provide ongoing management of its client’s affairs

The minimum investment required is negotiable. Plus, they offer a range of trust types which includes:

• charitable trusts
• revocable
• irrevocable
• private

If you name Bank of America as a trustee, the minimum account balance is $20,000, plus between 2% and 3% in fees.

The administration costs vary depending on the type of account you open, but they are typically between 0.45% and 1.40%.

Because of their thousands of ATMs and financial centers, you may find a Bank of America branch almost anywhere in the United States.

JP Morgan

Administration Fee: 1.45%

Minimum Balance: no minimum balance required

JPMorgan distinguishes itself by not requiring a minimum deposit. In comparison, Bank of America has a minimum of up to $600,000, and Wells Fargo has a minimum of $1,000,000.

The expenses associated with opening a trust account with JPMorgan are expected to limit access to people with significant wealth.

They provide revocable and irrevocable trusts and charge a minimum yearly administration cost of $15,000 per trust, as well as, a tiered advising fee beginning at 1.45% for the first $250,000 placed.

Ally

Administration Fee: XX

Minimum Balance: no minimum balance required

If you’re looking for an alternative to a large, traditional bank? I recommend using an online bank like Ally.

One significant advantage of using an online bank is that they frequently have reduced fees due to decreased overhead costs.

Ally allows you to start a checking, savings, money market, or CD trust account by following the simple steps on their user-friendly website. Revocable or irrevocable trusts are available. They do not provide accounts for corporate or business trusts.

Existing Ally members can easily convert their existing accounts to trust accounts by completing the Trust Conversion Request Form on their website.

Contact Ally customer service through live chat or phone at any time. This can be a welcome difference if you’ve dealt with other online banks that make it tough to contact a live person.

Alliant Credit Union

Administration Fee: XX

Minimum Balance: no minimum balance required

Alliant Credit Union is undoubtedly one of the top choices for those who prefer credit unions to banks for their financial needs.

Their impressive list of four separate trust account options includes:

• A high-yield savings account.
• A supplemental savings account.
• A high-rate checking account.
• C.D.s

Alliant Credit Union trust accounts do not accept credit or debit cards, and they do not accept IRAs, loans, or mortgages.

Wells Fargo

Administration Fee: XX

Minimum Balance: $1,000,000

Customers can open individual and corporate trustee accounts with Wells Fargo. Combining the two account types is the best answer for you.

Wells Fargo also offers Special Needs Trusts and Legacy Trusts.

Legacy trusts help future generations in your family and provide you some say over how the trust is utilized after you’re gone. Legacy trusts are sometimes known as Dynasty trusts.

Special Needs trusts are expressly intended to assist in caring for a person with special needs or a handicap.

With over 4,900 branches across the United States, Wells Fargo is difficult to beat regarding accessibility if you’re considering getting a trust account.

Types Of Trust Accounts

When you want to set up an account, knowing what kinds of trust accounts are available in the market is essential. Below are the six types of trust to consider:

Revocable Trust

As the name suggests, a revocable trust can be revoked by the grantor at any time during their lifetime. It is a will substitute, which means that the title of the assets in the trust is transferred the way the donor wants his help to be handled.

Since it’s still under your ownership, it can still be subject to estate tax.

Irrevocable Trust

Like a revocable trust, the grantor can decide how he wants his assets handled. The only difference between the two is that while a revocable trust can be revoked, an irrevocable trust cannot. Once the decision is made, it’s final. They last for your entire lifetime and after you’ve passed.

By removing assets from your ownership into the trust, you can help protect them from estate tax.

Funded Trust

Funded trust has assets put into it by the trustor during their lifetime. The trustor will deposit funds into a funded trust while they’re still alive.

Unfunded Trust

Unfunded trusts can become funded upon the trustor’s death or remain unfunded. An unfunded trust only requires that a trust agreement be made but doesn’t require any funding. Somebody may fund an unfunded trust upon the trustor’s death, but it may also remain unfunded.

Living Trust

Living Trust holds a trustor’s assets while they’re still alive and makes it easier to distribute them after they’ve passed away. It can be revocable or irrevocable, also known as an “inter-vivos.”

Testamentary Trust

A testamentary trust, or will trust, benefits the beneficiary after the trustor has passed away. These are often part of a person’s last will. They are always irrevocable.

Bottom Line

A trust account gives you and your assets legal protection to ensure they will be granted according to your wishes. It also helps you save your properties and funds from creditors.

Sources:

• Vanguard
• CreditDonkey
• Cornell Law School
• MetLife
• Investopedia

The post Trusted Banks for Trust Accounts: A Comprehensive Guide appeared first on Balancing Everything.

You can keep essential documents, expensive jewelry, and other valuables in safe deposit boxes. But how much do they cost? 

The Cost of Safety Deposit Boxes

The average cost of the smallest-size deposit box is about $60 a year. The prices vary according to the size, location, and relationship with your bank. Some banks have discounts, too, depending on the type of account.

The common sizes of boxes in inches are:

• 3” x 5”
• 5” x 5”
• 3” x 10”
• 5” x 10”
• 10” x 10”

Here are the annual prices according to size and per bank:  

Note: There are discounts for Citibank account holders: the bank will waive an annual fee of up to $125 for clients in the Citigold or Citi Priority Account Package. Safe deposit boxes valued over $125 will have a 50% discount.

Overall you have many options, but you could choose the bank where you already have an account or open another one elsewhere.

Getting your box opened without your key is another thing to consider when deciding where to have your safety deposit box. 

The Cost of Losing Your Deposit Box Key

Don’t lose your key since, usually, it is the only copy your bank has for security purposes. You can order a replacement key, but a locksmith needs to drill into your safety box if you’ve lost both the original and replacement keys.

Replacement keys and drilling charges are added costs. Fees differ as well across banks. Let’s see them here.

Chase Bank allows you to pay a key deposit covering the cost of your replacement key. You must surrender your contract for the safe deposit box before returning it.

As of last year, Chase is no longer offering new leases on deposit boxes. The boxes are taking up too much square footage in a bank, and fewer and fewer people need them. Also, training staff on how to operate this type of storage takes time and money, making it costly to operate overall. 

Also, take note of how late payments add to the equation.

Paying Late Fees

For how your landlord might penalize you for a late payment on your rent, and your bank will charge you if it has been more than 30 or 60 days past your payment due date. The different banks’ charges range from $5 to $10. Check your bank for their rules on late payment charges. 

The Bottom Line

Select the best size and price of the safe deposit box and your distance to the bank branch. You can choose the one most fitting for you and your items; ask the bank for their complete guidelines.

A safe deposit box is a great way to secure physical items too valuable to lose. Still, consider a digital safety deposit box for more sensitive files.

FAQs 

Is there a no-cost safe deposit box?

Some banking institutions offer a free small box for premium account holders, such as Bank of America Platinum or Platinum Honors and Chase’s Premier Plus Checking. You may check your specific bank to see if they offer this. 

What should and shouldn’t I put in a safety deposit box?

You can put in original versions of birth certificates, car titles, property deeds, marriage and divorce documents, etc. Valuable items such as heirlooms, card and coin collections, and expensive jewelry are also accepted.

Refrain from putting in passports, cash, driver’s license, safe deposit keys, and other forms of ID since these are items you need to access immediately when required. Banks prohibit dangerous items such as guns as well. 

Are safe deposit boxes safe?

They are not 100% safe if the contents are not insured. Neither your bank nor the Federal Deposit Insurance Corporation or FDIC insures them. There are no safeguards if your items get stolen or destroyed. It’s best to have a private insurer safeguard them inside the bank.

Sources:

• Trustworthy
• First NATIONAL BANK
• First Quarter Finance
• First Quarter Finance
• Citi
• THE ESTATE PLANNING &LEGACY LAW CENTER
• AARP

The post How Much Do Safe Deposit Boxes Cost? appeared first on Balancing Everything.

In this article, you’ll learn the key distinction between Islamic banking vs. conventional banking.

A Brief History of Islamic Banking & Conventional Banking

Banking can be traced back to ancient civilizations, such as the Babylonians, who used clay tablets as receipts for deposits and loans. During the Middle Ages, Italian merchants, such as the Medici family, began to use bills of exchange to transfer money over long distances.

Through this, the banking concept evolved and paved the way for modern banking today. Here is a brief history of Islamic Banking and Conventional Banking.

Islamic Banking and Its Roots

Islamic banking originated from Islam’s beliefs and has evolved alongside conventional systems. Its history is deeply rooted in religious beliefs and ethical values, making it a unique and important approach that continues to improve. Here are the roots of banking in Islam, Islamic banking after World War II, and their banking in the modern day.

Roots 

• 610 AD – Islam was founded by the Prophet Muhammad
• 610 AD- 632 AD – The Quran was widely disseminated and after Prophet Muhammad’s death Muslims developed financial transactions based on Islamic Principles
• 750 AD – The Abbasid caliphate took control of the Arabian peninsula and Islamic financial practices became more widespread
• 1100 AD – Islamic merchants developed the concept of sakk or financial certificates to act as certificate of deposits across long distances. 
• 1500 AD – The Ottomans developed a system based on Islamic principles and these included the modern murabahah financing system.

Post World War II

• 1963 – The Mit Ghamr Savings Bank in Egypt became the first modern Islamic bank that offers interest-fee financial services to its clients
• 1975 – The Islamic Development Bank was established and became the first multilateral financial institution based on Islamic Principles
• 1977: The Dubai Islamic Bank was founded, becoming the first modern commercial Islamic bank.

Modern Day

• 1980s: Islamic finance began to spread beyond the Middle East, with the establishment of Islamic financial institutions in Malaysia, Pakistan, and other countries.
• 2000s: Islamic finance continued to grow, with the establishment of new Islamic financial institutions and the development of new financial products, such as sukuk, or Islamic bonds.
• 2010s: Islamic finance became more integrated into the global financial system, with the participation of major international banks in Islamic finance and the development of Islamic finance regulations in countries such as the UK and Luxembourg.

Conventional Banking in Ancient and Modern Times

Banking has existed for centuries, with evidence of banking activities dating back to ancient times. With this, it continues to change, improve, and adapt to the needs of modern society. Here is a brief history of banking in ancient, late medieval, early modern, and modern-day eras.

Ancient Times

• 2000 BC: The first known banks in the world were the temples of ancient Babylon, where deposits were made of grain and other commodities.
• 1400 BC: The Ancient Egyptians began using gold and silver deposits for storage and safekeeping.
• 700 BC: The Greeks established a banking system based on the exchange of coins.
• 32 AD: The Roman Empire developed a complex banking system, which included the issuing of bills of exchange and the development of money lending practices.
• 1161 AD: The Knights Templar established a banking system throughout Europe, including the issuance of letters of credit.

Late Medieval Times

• 1400s: The Medici family of Florence, Italy, established one of the earliest modern banks, which became a model for other banks in Europe.
• 1694: The Bank of England was established, becoming the first modern central bank.

Early Modern Era

• 1861: The first national banking system was established in the United States.
• 1913: The Federal Reserve System was established in the United States, becoming the central banking system for the country.
• 1950s: The development of electronic banking began, including the introduction of credit cards and automatic teller machines (ATMs).

Modern Day

• 1990s: The widespread adoption of the internet led to the development of online banking services.
• 2000s: The global financial crisis of 2008 led to major changes in the banking industry, including increased regulation and oversight.
• 2010s: The growth of mobile technology led to the development of mobile banking, allowing customers to access their accounts and conduct transactions through their smartphones.

What Is Islamic Banking?

Islamic banking is based on the principles of the Quran and the Sunnah (the traditions of the Prophet Muhammad). It encourages Muslims to use their money in a way that aligns with their faith, so they can help others and avoid any immoral activity. Islamic banks must adhere to strict ethical guidelines set by their regulators to be considered Islamic banks.

Islamic Banking uses profit-sharing, loans with no interest, and other financial services based on Islamic Sharia law’s tenets. Islamic banks are designed to promote financial transactions, primarily focusing on charity and community development.

Islamic banks offer various financial services, including loans, investments, and insurance products. They also operate in many other countries worldwide where they are regulated differently than in Saudi Arabia or Egypt, where they were founded.

What Is Conventional Banking?

The conventional banking system is the type of banking that we know today. A bank is a financial institution that focuses on officialized distribution, collection of client deposits, making loans, accepting checking services, and offering various financial products for the client’s gain. Banks earn profit through interest from loans taken by other clients. 

There are different types of banks for different needs and services, such as commercial, retail, and investment banks. Each bank is regulated within the ruling of a country, state, or city. 

The Differences Between Islamic Banking & Conventional Banking

These are some differences between Islamic banking from conventional banking:

Points of Comparison	Islamic Bank	Conventional Banking
Interest
Risky Trade
Negotiable instruments
Sharia Laws

Interest

Islamic banks prohibit interest-bearing loans. Instead, it is paid by profit sharing or equity. Conventional banks earn profit by letting their borrowers pay interest on loans and fees such as late and bounced check fees.

Trade

Islamic banks do not engage in speculation (Gharar) or trade. They only invest in real estate, businesses, and other commodities that are considered halal (permissible). Conventional banks can engage in these activities since they do not receive any profit from them (or any other profitable activity).

Negotiable Instruments

Islamic banks do not issue negotiable instruments such as checks or money orders; instead, they accept payments via cash or check deposits made directly into accounts at the bank itself (rather than through third parties). Accepts and issues checks or money orders and check deposits from third-party banks.

Sharia Laws

Islamic banking uses principles of Islamic jurisprudence to regulate the relationship between lenders and borrowers and between borrowers themselves. Conventional banking doesn’t use Sharia law principles.

An Islamic bank’s goal is to promote economic development by providing financing for businesses that would otherwise be unable to access it through conventional banks due to their conservative approach toward financial products such as mortgages and personal loans.

A conventional bank aims to promote economic development through deposits, loans, and applying interest for its products.

What are the Financial Instruments Used in Both Types Of Banks?

There are many differences between Islamic Banking and Conventional Banking. Despite the two types focusing on saving money, earning money, and safeguarding investments, The main difference between Islamic banking and conventional banking is that Islamic banks are the financial instruments they use.

Points of Comparison	Islamic Banking	Conventional Banking
Mudarabah (Business Partnership)
Murabahah (Business Capital Financing).
Investments with Interest
Ijarah (Reant or Lease)
Musharakah (Joint Ventures)
Salam (Supplication of Goods)
Sukuk – securities
Istisna – Manufacturing, construction, and installations
Equity

Frequently Asked Questions

What is the advantage of Islamic Banking?

Islamic Banking ensures financial inclusions. Every client and business has access to affordable financial services and products.

What is the advantage of Conventional Banking?

More opportunities for investment and a wide variety of financial products with no limitations on the products or means used.

What are the risks involved in Islamic Banking?

Infrastructure, financial engineering, product offering, and Shari’ah audit.

What is the basis of Islamic Banking and Conventional Banking?

Islamic banking is based on the Quran and how they apply to business dealings. These regulations governing business dealings in Islamic banking are known as fiqh al-muamalat.

Conventional banking is based on the Agent of Trust, Agent of Development

Agent of Service by channeling capital exchange of money to loans and savings.

Conclusion: Recognizing Differences

Islamic Banking and conventional banking follow different philosophies. Islamic banking is founded on profit and loss sharing, risk sharing, financing, and loans without collateral or interest. It forbids investments that are not aligned with Shariah laws. Conversely, conventional banking relies on interest-based transactions, product or form assets, less risk, and collateral on loans.

Both banking systems benefit their clients, businesses, and customers. It aims to promote economic growth and stabilize economies by providing a safe space for clients. These principles, however different, help them grow individually.

Sources:

• Davies, L. (n.d.). Chronology of Monetary History 9,000 – 1 BC. University of Exeter. Retrieved March 7, 2023, from http://projects.exeter.ac.uk/RDavies/arian/amser/chrono1.html
• Gordon, J. (2022, April 18). Islamic Banking – Explained. The Business Professor. Retrieved March 7, 2023, from https://thebusinessprofessor.com/banking-lending-credit-industry/islamic-banking-definition
• How Banking Works, Types of Banks, and How To Choose the Best Bank for You. (n.d.). Investopedia. Retrieved March 7, 2023, from https://www.investopedia.com/terms/b/bank.asp
• Islamic Banking vs. Conventional Banking. (n.d.). Islamic Economics & Finance. Retrieved March 7, 2023, from https://islamiceconomics.net/islamic-banking-vs-conventional-banking/
• Islamic Financial Instruments – Shariah Contacts. (2022, November 17). AIMS UK. Retrieved March 7, 2023, from https://aims.education/study-online/islamic-financial-instruments/
• ISSUES AND CHALLENGES OF RISK MANAGEMENT IN ISLAMIC BANKS. (2022, June 20). jised. Retrieved March 7, 2023, from http://www.jised.com/PDF/JISED-2022-45-06-09.pdf
• Tarver, E., & Kvilhaug, S. (n.d.). Islamic Banking and Finance Definition: History and Example. Investopedia. Retrieved March 7, 2023, from https://www.investopedia.com/terms/i/islamicbanking.asp#toc-history-of-islamic-banking

The post Islamic Banking vs Conventional Banking: Understanding the Difference appeared first on Balancing Everything.

So hop on in and learn about credit unions and banks, their differences and benefits, and which one is for you.

Credit Union vs. Banks: Side-by-side Comparison

Which is better, credit union or bank? The answer is both, depending on your needs. Credit unions and banks are similar in offering personal loans, checking accounts, savings accounts, CDs, and more. However, there are pros and cons between them that can help you decide which is right for you.

Credit Unions

A credit union is a collection of people who share a “common bond” based on:

• Residence
• Work
• Employment
• Organization

Their members, not shareholders, manage credit unions. They are not-for-profit organizations that exist to serve the needs of their members. They allow their members to manage their finances by putting their resources to work for them.

Every credit union is owned by those who use it for borrowing and saving. Each credit union works by members pooling their savings and lending to one another at a fair and reasonable interest rate.

In a Credit Union, there is no need to show proof of profit as its goal is to help people save and earn money within the organization. Each credit union member also has a say in how the union is run. 

Since Credit Unions are non-profit institutions. They offer a wide variety of beneficial choices for their members. They often have:

• Lower to no monthly fees
• Little to no minimum required balances
• Lower interest rates on savings and loans
• Insured and secured deposits
• More opportunities for loans
• Easier access to loans and services
• Personalized customer service
• Anyone can be a member

In addition, federal taxes are typically not applied to unions, and some credit unions even get financial support from the associations they are linked with. As a result, credit unions are free from the pressure of turning a profit for their stockholders. This exemption helps the credit union keep its fees small and accessible to its members.

Cons of Credit Unions

Despite the many pros of being a credit union member, it also has cons. Since credit unions focus on delivering more to their members, they tend to have the following:

• Outdated technology
• Limited digital or online banking opportunities
• Limited financial products
• Fewer branches
• Limited membership through “field of membership“

They also have limited locations and tend to have fewer branches. One credit union may differ from another in a different state. This makes transferring from one credit union to another difficult.

Same with their ATM locations, but some Credit Unions have CO-OP branches with other ATM networks, which makes deposits and withdrawals easier. Credit Unions also limit their members, and each union has specific member eligibility depending on the area or locale.

Bank

A bank is a financial institution subject to federal, state, or joint regulation. Its primary responsibilities are to accept deposits and issue loans. They also offer other services such as Individual Retirement Accounts, Certificates of Deposits, currency exchange, and safety deposit boxes. Each bank has its tailored services depending on your account and the type of bank.

Banks control the movement of money between individuals and businesses, whether physical or online. More specifically, banks provide deposit accounts and safe cash storage spaces. 

Banks lend to other people or companies using the funds in deposit accounts. In exchange, borrowers pay interest on those loans to the bank. The initial deposit account holder then receives a portion of that interest back as interest.

Banks’ primary sources of income are the interest on loans and the fees they charge their clients.

Pros of Banks

As for-profit institutions, banks offer a variety of sophisticated financial opportunities to their clients, such as:

• Diverse investment options
• A wider range of financial products and services
• Easily accessible locations and branches – international and local
• Financial literacy and education
• Credit Card and significant loan options
• Mobile banking
• No “field of membership”
• More financial benefits when you access their products.

Banks also have the technology to cater to various interests and customers through convenient applications, easy access to your money, and services that adapt to real-time.

Cons of Banks

Due to its structure and uniformity, applying for a bank account is generally perceived as the ideal way of saving money. Banks are run by investors rather than members, making their commands more specified. Banks tend to have:

• Highers fees (monthly, yearly, bi-annually, quarterly)
• Higher interest rates on loans, investments, and other products
• Strict application and inflexible rules

Banks may have fewer cons, but these cons help the bank improve its input to the general public and fund more opportunities to widen its financial growth.

The Difference Between Credit Unions and Banks

Credit unions and banks are two equally different financial establishments. One of the main differences between Credit Unions and Banks is that Credit Unions are not-for-profit institutions that focus on the needs of their members. At the same time, banks are generally for-profit institutions focusing on their customers’ interests and investors.

Credit Unions distribute profits among their members through memberships and loans within members, and banks earn profit through interest. This gives bank clients to explore more options for their banking experience and ensure investors of their investments.

Bottom Line: Making the Right Choice Between a Credit Union or a Bank

With all the details stated above, there is no right or wrong decision when it comes to choosing which institution is for you. The decision of which to pick is a personal one. You have to ask yourself which financial aspect you value the most. 

Whether or not you value certain aspects of banks, such as convenience and access, credit unions, with their more personal approach to handling money, choosing one that’s best for you will depend on your financial situation and your long-term money goals.

Frequently Asked Questions

Is it better to use a bank or credit union?

If you value in-house customer service and lower interest fees, choose Credit Unions. If you prefer more financial opportunities and easy access to your money, choose Banks.

Is credit unions safer than banks?

Credit Unions are insured by the National Credit Union Association (NCUA), which manages the National Credit Union Share Insurance Fund. Banks are insured by the Federal Deposit Insurance Corporation.

Can your savings grow in Credit Unions?

You receive compensation from credit unions for maintaining your funds and account. It gives out money known as a dividend, which is the same as bank interest.

What is the most significant benefit of using banks over credit unions?

Convenience and easy access no matter the location.

How does your savings grow in banks?

Banks use compounding interest to grow your funds.

What are the usual rates of Credit Unions and banks?

As of December 2022, the National Average Rate of a regular savings account (2.5k) is 14 for credit unions and .22 for banks. 

National rates still vary depending on the account and product.

Sources: 

• Credit Union and Bank Rates 2022 Q4. (2023, January 10). NCUA. Retrieved March 7, 2023, from https://ncua.gov/analysis/cuso-economic-data/credit-union-bank-rates/credit-union-and-bank-rates-2022-q4
• Credit Union vs. Bank: Pros and Cons. (2022, July 14). MoneyWise. Retrieved March 7, 2023, from https://moneywise.com/banking/banking-basics/credit-union-vs-bank
• What Is A Bank And How Does It Work? (2022, March 31). Forbes. Retrieved March 7, 2023, from https://www.forbes.com/advisor/banking/how-do-banks-work/
• What is Interest Rate and How Does It Work? (2020, January 2). CIMB Bank PH. Retrieved March 7, 2023, from https://www.cimbbank.com.ph/en/financial-literacy-articles/financial-essentials/what-is-interest-rate-and-how-does-it-work.html

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