Bank Size Matters...In a Bad Way?

At least that is the finding of the Forrester Group, a prominent research firm that recently conducted a survey of 4,500 bank customers, and found that bigger banks received the lowest marks. It is worth noting that low rates paid on CDs, money market accounts, and savings accounts was named by certain customers as a prime reason for this widespread displeasure with the larger banks.

The survey simply asked whether or not bank customers agree with this statement:

"My financial provider does what's best for me, not just its own bottom line."

The bigger banks did not fare well under this spotlight. Among Bank of America customers, 33 percent of respondents agreed with the statement. Credit union customers, by contrast, reported a 70 percent agreement with the statement. HSBC finished last place, with only 16 percent positivity.

Although there are a variety of reasons why people may not enjoy dealing with a large bank, there can be no doubt that the meager interest rates paid by big banks on CDs, money market accounts, and savings accounts is a definite factor. Proprietary MoneyRates.com data supports this notion that smaller banks and credit unions are having success pulling in new customers by paying higher interest rates on deposits.

Another segment of the banking industry that is capitalizing on the potential of higher interest investment accounts is the online savings account banks. ING Direct is perceived as the leader of this crew, and enjoyed a 64 percent approval rating in the Forrester survey.

The ability of people to search for the highest interest savings accounts online is key in this respect.