If you’re looking at opening a new bank account or move your existing accounts to a new bank, regional banks are something that might have come up on your radar.
These types of banks have some advantages over other types of banks. There also are several things that you need to look out for to ensure that your experience remains a positive one.
This article will explain what regional banks are, what they offer, and look at some of the top regional banks available today.
5 Best Regional Banks of 2021
Here’s a list of the top 5 regional banks available across the country.
Bancorp South (not to be confused with US Bancorp) is a southern bank that first started operating out of a hardware store in 1876.
While they started servicing Tupelo customers, they grew through several mergers and acquisitions, extending their reach to what it is today.
Through their personal banking arm, they offer many deposit accounts, including checking and savings accounts.
They also provide loans, credit cards, and wealth management services. Bancorp South also offers its customers online banking as well as mobile banking.
BBVA USA is a regional bank with a strong presence in the south. They are considered one of the best regional banks, and their accounts regularly feature in lists of best bank accounts.
The bank services both individual customers and small businesses as well as commercial entities. They also offer global wealth services to help customers reach their goals.
BBVA offers several checking and savings accounts on the personal banking side, including free checking accounts. Other products and services on offer include credit cards, loans, mortgages, and investments.
BBVA also offers many special programs designed for students, medical professionals, military and law enforcement personnel, students, and several other special benefits and perks.
Fifth Third Bank
Fifth Third Bank is a regional bank servicing Midwestern and Eastern clients.
In March of 2020, Fifth Third Bank was sued by a federal regulator for alleged fraudulent activity in which bank employees opened unauthorized accounts to meet their sales target. In February 2021, the bank also settled the high ATM fees it charged customers.
That aside, the bank services individuals, businesses, and corporations. Their Momentum Banking account comes with no hidden fees, fraud protection and even allows you to get access to your pay. However, this is against a fee.
Fifth Third also offers loans and mortgages, investment options, as well as insurance.
PNC is a regional bank with a presence in some 21 different states, making it one of the larger regional banks.
Just like other banks, they serve several different customers with many innovative products and services. They recently acquired BBVA USA, which we covered earlier in this article.
While they offer traditional bank accounts such as checking accounts and savings accounts, they also have Virtual Wallet, which combines tools for managing your money with a checking and savings account. They also offer banking services for students and military personnel with special packages available.
Their website also features an extensive learning section, with many topics available to help visitors learn more about personal finance.
Headquarters: North Carolina
Truist Bank is the product of a merger between two banks – BB&T and SunTrust. The bank operates in 15 states and Washington, DC.
At the moment, you cannot open an account directly with Truist – instead, you will need to go either through BB&T or SunTrust.
Once the merger completes and systems undergo consolidation, any account held with these two banks will become a Truist account.
While most of the bank’s products and services are still under wraps, the bank has started releasing information about what we can expect, including Truist Momentum – a financial wellness program that employers can offer to their employees.
The program is offered at cost and has already seen some positive results.
Other Top Regional Banks Reviewed
What Is A Regional Bank?
A regional bank is, for all intents and purposes, a bank. In most cases, the only difference is that they operate in a specific area and do not service customers nationwide.
Regional banks sit between community banks and national banks. While the term national bank technically means any bank that operates within a regulatory structure, it can also mean a bank with operations, such as branches and ATMs across the nation.
Regional banks, on the other hand, while they are technically speaking national banks, only service select areas that can range from a few counties to a handful of states. In a way, their business model is similar to that of credit unions.
As regional banks are bigger than community banks, they tend to offer a wider selection of products and services. Yet, they are still able to provide a more personalized service, which is something that the big banks often lack.
The term big banks can be pretty confusing since most banks are rather big. However, some banks, such as the Big Four banks, can be considerably bigger. These include:
- Wells Fargo: California Headquarters
- Bank of America: North Carolina Headquarters
- Citi: New York Headquarters
- JP Morgan Chase: New York Headquarters
They have branches and ATMs across the entire US, unlike regional banks who tend only to service specific areas.
What Products Do Regional Banks Offer?
In most cases, you’ll find all of the products and services typically offered by the bigger banks.
However, this is a generalization since nothing binds regional banks from providing one service and not the other. Regional banks can also vary a lot in size, which can limit what they offer.
You should find many different deposit accounts, including:
Most regional banks, especially the bigger ones, will also offer debit cards, credit cards, loans, mortgages, and other financial products and services.
Features of Regional Banks
As we discussed, regional banks have many, if not all, of the features and banking services you find at any other bank.
It is still important to check if the bank has all of the features and perks you need.
Here are some things to keep in mind when looking at regional banks to open your bank account.
- Branches: Regional banks tend to have a limited number of branches located in a relatively small area. If you’re planning on visiting a branch, check beforehand whether it’s open or not due to coronavirus restrictions.
- Mobile App: A mobile banking app, much like internet banking, allows you to carry out many banking tasks from the comfort of your own home. If you’re particularly opposed to having to visit a branch, you’ll need to make sure that the app caters to your needs.
- FDIC Insurance: While regional banks are unlikely to fail, it is not impossible either. Having FDIC insurance will make sure you are covered should the worst happen.
- ATM Networks: ATM networks are an important feature if you withdraw cash regularly. Make sure the bank’s network services the area you visit most to avoid paying unnecessary ATM fees.
- Interest Rates: Like other financial institutions, regional banks offer interest rates on their savings accounts, with rates varying from one bank to the next.
Regional Bank Fees
While smaller banks tend to have more advantageous fees, this will not be the case in every situation.
Fees and costs are very fluid,d and while banks do their best to remain competitive, being cheaper is not always going to be the winning formula for banks.
Nobody likes to pay fees, but you’re more than likely to get extra services and perks for those fees you pay. You have to be careful of paying fees for services and perks that you do not need.
Because of this, the secret is first to understand your financial situation and your goals and aspirations, then find the bank that can help you now and in the future, at the least cost possible.
Finding one that fits the bill might not be the easiest of tasks. There’s no secret formula as everyone’s needs and goals are different.
But regional banks are a good place to start looking, as they sit mid-way between the smaller banks and the bigger banks.
Going through them will help you understand if you need something more advanced or if a local community bank is your answer.
Potential Regional Bank Fees
- Monthly Fees: Just like other banks, regional banks can charge fees unless you meet some requirements to avoid the checking account fees, such as keeping an average balance or making several deposits.
- Overdraft Fees: Overdraft fees tend to be some of the most expensive bank fees around, with some banks offering overdraft protection to help you limit how much you end up paying should you overdraw your account.
- ATM Fees: ATM fees are a particular concern with regional banks since these tend to have a more limited presence, which is why a number of them partner up with nationwide ATM networks to allow you for more fee-free withdrawals
These are not the only fees regional banks have, but they tend to be very common and somewhat unavoidable. That’s why you need to plan to ensure that you don’t pay more fees than strictly necessary.
If you already have a bank account, go through the statement to see which fees weigh you down the most. Make a list of them to find the regional bank that offers these fees for lower costs.
Regional Banks In The Stock Market
If you’re not ready to open a bank account with a regional bank yet but like the idea, you can also invest in them by purchasing stocks in the SPDR S&P Regional Banking ETF (Ticker: KRE).
This ETF tracks many regional bank stocks, included in the S&P Regional Banks Select Industry Index.
Regional Banks FAQs
What is considered a regional bank?
A regional bank is a bank that operates within a limited geographical area. This area’s size will vary from one regional bank to another, with some banks being much bigger than others.
How many regional banks are there in the US?
There are over 19,000 regional banks in the US; however, this depends on which definition of regional banks you use. This statistic includes banks that have assets under management totaling between $50 billion and $500 billion.
What are the four types of banks?
The four types of banks are:
- Central Banks
- Retail Banks
- Investment Banks
- Regional Banks
While there can become overlap between these types (for example, all regional banks are commercial banks but not all commercial banks are retail banks), others, such as Central Banks, serve a very specific purpose.
In this case, Central Banks manage all of the other banks that fall within their jurisdiction.