2011 Credit Union Checking Study
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Banking at credit unions, community banks

Though smaller banks tend to charge lower fees than big banks, this isn't always the case. "Do a comparison of different fees and interest rates," says Patricia Seaman, spokeswoman for the Denver-based National Endowment for Financial Education. "You shouldn't assume one institution is higher or lower than another."

More personal customer service

Small banks and credit unions pride themselves on excellent customer service, Susswein says. They make a point of getting to know their customers.

"The big banks may offer speed and convenience," Susswein says. "The credit unions and community banks make up for it in service and typically more personal attention."

Fewer branches and ATMs

Unlike a big national bank, a community bank or credit union won't have branch locations and ATMs all over the country.

Credit union and community bank branches will be limited to a small geographic area. And you'll have fewer options should you need to visit a branch. Make sure there's a branch close to where you live or work. The same goes for automated teller machine locations.

With far fewer ATMs at your disposal, you may be tempted to use another financial institution's ATM. If you must withdraw money from another bank's ATM, you could face an average fee of $2.22 for your withdrawal, according to Bankrate's 2009 Checking Study.

To avoid fees, stick to the ATM network provided by your community bank or credit union. The Co-Op Network, a group of more than 1,400 credit unions, provides surcharge-free ATM access at more than 25,000 locations nationwide.

Limited customer service hours

Unlike a big national bank, small community banks and credit unions may not provide a 24-hour, seven-days-a-week customer call center. You also may need to limit your in-branch banking to weekdays.

"Customer service may not be available on weekends or after 5 p.m. during the week," Consumer Action's Susswein says.

Fewer bells and whistles

Big banks have the edge when it comes to providing the latest online and mobile banking choices to customers, banking consultant Clarson says.

Study a community bank or credit union's online banking options carefully. You'll want to know if the community bank or credit union gives you the option of paying bills online. If so, are there fees? And does it offer mobile banking?

Susswein also says to ask if the credit union or community bank processes payments for bills paid online the same day. She recommends picking a small financial institution based on your banking needs.

"To make a good choice requires homework," she says.

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