Tips from Chamber Member BOOKKEEPING EXPRESS Local Is Better — The Advantages of Local Financial Institutions The benefits of local financial institutions over online banking Local is the hottest trend of the moment. The best restaurants use local ingredients, the best bars feature local music and the best galleries display local art. It turns out that local is also an important concept when it comes to how you manage your finances. Although online bank accounts offer some advantages, in many ways they can’t compete with local financial institutions. Customer Service About guide Justin Pritchard, CFP, MBA, MS, cautions that customer service can be the biggest drawback of using an online bank. “One reason to hesitate about online banking is that you may have trouble with customer service,” states Pritchard.“With a brick-and-mortar bank, you’ll likely have some familiarity with the staff, and at a small credit union, the staff might even know you well.” Forming Relationships At a local institution, you can get to know the staff and they can get to know you, your preferences, and your specific financial situation. It is human nature to work harder to satisfy people that you know rather than complete strangers, and a local financial institution makes the most of this tendency. Not only is it beneficial that the staff become acquainted with you, but it is also important that you are able to get to know them. When you become familiar with the way that individual staff members work, you know whom you would like to work with each time you arrive at your bank or credit union. When working with an online bank, you won’t know whom you will be working with, or whether they will be helpful and patient, until they pick up the call. Resolving Issues While some people prefer to do business quickly and avoid personal interaction, if you like to discuss potential issues and options in person, then a local financial institution is your best bet. “If there is a mistake somewhere, a face-to-face discussion may be the most effective way to make progress when things are confusing. You won’t have to wait on hold and deal with an ‘escalation’ process. Everybody can sit down together and figure things out,” says Pritchard. Opening an Account Most people think of online transactions as being quicker than those in the brick-and-mortar world, but that is not always the case when opening an account at an online financial institution. At a local bank or credit union, you can typically utilize your account right after you stop in and open it. Before you can begin using an online account, however, it is usually necessary to fill out an online application and sometimes mail in an additional paper form that includes your signature and then wait to hear back. Using Your Account Just as opening an online account can be slower than opening one at a local bank or credit union, making deposits and using money can also be more cumbersome. Waiting for your check deposit to arrive by mail obviously takes longer than simply depositing it at a brick-and-mortar location, which can delay the start of earning interest on the amount. Furthermore, if you need to pay someone quickly with cleared funds, you won’t be able to use a cashier’s check with an online bank. Instead, you must hope the recipient will accept a wire transfer. Everyone occasionally encounters issues with the Internet, whether it is in the form of losing Internet access, having computer difficulty or finding that a specific website is temporarily down. While these problems are an annoyance in mundane, day-to-day activities, they can be more serious if they create a barrier to using your account. “A technical glitch could cause the bank’s website to go off-line for a period of time, possibly resulting in problems for you and your business. For example, you may need immediate funds after normal banking hours to make a payment or emergency business purchase,” says Chris Joseph for the Houston Chronicle, Small Business.
Posted on: Tue, 02 Sep 2014 19:34:57 +0000
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