What is a community bank? – Councilor Forbes


If you are trying to decide where to bank, there are a few key perks and benefits that a community bank can offer.

Better interest rates

Community banks may be able to offer you better interest rates on financial products compared to a large national bank. For example, some of the best CD rates and the best high yield savings accounts can be found in what one might define as community banks.


If you’ve had a bad banking experience, aren’t banked or underbanked, or have struggled to get credit from major banks, consider a community bank.

Because these banks focus on personal relationships in local communities, they tend to have less structured standards when approving loans. You might find that community banks offer a bit more flexibility to work with you, compared to a larger bank with more stringent lending standards.

Personal attention

You may find that a community bank is more customer-oriented, offering more personalized service than a large bank. If you want to do your banking in a place that knows you and is closely linked to your community, you can have a more personalized experience at a community bank.

Working with a community bank can also give you a better customer experience. The 2019 Small Business Credit Survey, a collaboration of the 12 Federal Reserve Banks, found that 79% of small business owners who applied for credit from a small bank were satisfied with the customer experience, against only 67% of candidates in the big banks. Some of the best checking accounts for the customer experience come from what you might define as community banks.

Community investment

Some community banks are also referred to as Community Development Financial Institutions, or CDFIs, which have a special mission to help provide economic opportunities and create financial self-sufficiency for underserved communities. CDFIs can be community banks or credit unions, and there are 1,000 CDFIs across the country. To find a CDFI near you, visit CDFI Fund website.


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