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Beware of Local Banks

Many local banks have high fees and very low deposit interest rates. Here's one example from a Brownsville Texas reporter who compared his local banks with online banks. His conclusion: "Brownsville's banks all stink"

The reporter randomly picked three local banks. The rates of the savings accounts ranged from 0.35% to 0.50%, and all had minimum balance requirements, lots of fees, and other restrictions. The banks included International Bank of Commerce, Laredo National Bank, and Texas State Bank.

The reporter then looked at some online banks like HSBC and ING Direct. Of course with rates as high as 3.75% and no minimum balance requirements, it was easy for him to see the advantage of online banking. He concluded:

Normally I'm all for supporting local businesses, but until our local banks develop a better business model and actually serve customers decently, my advice is to vote with your feet - and your dollars - and earn about 10 times the APY online