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May 31, 2013

Historical Echoes: How to Choose a Bank, Past and Present

Amy Farber

In May 1953, an article from Kiplinger’s Changing Times titled “No, All
Banks Are Not Alike
” advised, “You want a bank that is safe,
convenient, pleasant to visit; one that offers all the regular banking services
and makes reasonable charges for them; one that is well managed and competently
staffed, and whose officers and tellers are friendly and willing to advise you
on your major financial problems.” It also recommends considering whether the officers of the bank participate in civic affairs and whether the bank provides tours for children.


    
There is a suggestion that switching one’s bank can have miraculous
therapeutic effects:

Are you irritable in the morning,
worried about money, apt to snap at your kids when they want 50 cents for a
school lunch? If so, why not try a
change of banks? It has done wonders for
others. One man changed to a new bank
and immediately lost symptoms of insecurity and depression he had for
years. Seems he had been nursing a
subconscious fear that the tellers were always about to bawl him out for
letting his checking account balance fall below $300.

    
There is an emphasis, too, on how “the feeling” separates a good
bank from a bad one:

Smith walks into his bank and it gives
him a big boost. He may catch the eye of
a vice president and get a nod, which gives him the feeling that he is among
friends and could confidently ask for financial advice and even help. Jones walks into his bank and immediately
there creeps over him the chilled feeling a peasant gets when he walks into the
Kremlin.

    
In present-day discussions about choosing a bank, which can be
gathered from various websites, such references disappear. Discussions about what to look for become
more complicated, and more prosaic, but, as in 1953, there is always a
discussion about fees.

    
Smartmoney.com, in its 2011 article “How to
Choose a Bank
,” advises thorough comparison of fees,
interest, and penalties, shopping around online and off, clearing up any uncertainties
with customer service, and resisting the dazzle of promotions, among other
points.

    
For its part, the Wall
Street Journal
‘s “How to
Select a Checking Account
” urges consumers not to necessarily set up a
checking account with the bank with which one already has a credit card or
other account, and to look carefully at fees.

Disclaimer
The views expressed in this post are those of the author and do not necessarily reflect the position of the Federal Reserve Bank of New York or the Federal Reserve System. Any errors or omissions are the responsibility of the author.


Amy Farber is a research librarian in the Federal Reserve
Bank of New York’s Research and Statistics Group.

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