Banks Are Closing Local Branches. Here’s What That Means for You

Some of the largest banks in the country have been closing their consumer bank branches by the dozens. Over 1,000 branches were closed this year alone by the likes of U.S. Bank, Chase, Wells Fargo, and Bank of America.

Closing branches mean customers now have to drive farther and farther to reach in-person banking services. This isn't ideal for happy customers, but banks are thinking more about their bottom lines than their community presence.

Branches are expensive and used less and less

Opening and running bank branches isn't cheap. If you're building from scratch, then you're looking at a huge investment that includes everything from the cost of real estate to building materials to construction crews. 

Even if you're renting space, most banks require fairly decent-sized buildings and specialized equipment (most offices don't come with giant safes). Size is money. After all that, you still need to staff the place -- you can't have a bank branch without tellers.

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Product	APY	Min. to Earn
American Express® High Yield Savings Member FDIC. APY 3.80% Rate info 3.80% annual percentage yield as of December 27, 2024. Terms apply. Min. to earn $0 Open Account for American Express® High Yield Savings On American Express's Secure Website. Member FDIC.	3.80% Rate info 3.80% annual percentage yield as of December 27, 2024. Terms apply.	$0	Open Account for American Express® High Yield Savings On American Express's Secure Website.
Capital One 360 Performance Savings Member FDIC. APY 3.80% Rate info See Capital One website for most up-to-date rates. Advertised Annual Percentage Yield (APY) is variable and accurate as of Dec. 6, 2024. Rates are subject to change at any time before or after account opening. Min. to earn $0 Open Account for Capital One 360 Performance Savings On Capital One's Secure Website. Member FDIC.	3.80% Rate info See Capital One website for most up-to-date rates. Advertised Annual Percentage Yield (APY) is variable and accurate as of Dec. 6, 2024. Rates are subject to change at any time before or after account opening.	$0	Open Account for Capital One 360 Performance Savings On Capital One's Secure Website.
Western Alliance Bank High-Yield Savings Premier Member FDIC. APY 4.46% Rate info The annual percentage yield (APY) is accurate as of November 7, 2024 and subject to change at the Bank’s discretion. Refer to product’s website for latest APY rate. Minimum deposit required to open an account is $500 and a minimum balance of $0.01 is required to earn the advertised APY. Min. to earn $500 to open, $0.01 for max APY Open Account for Western Alliance Bank High-Yield Savings Premier On Western Alliance Bank's Secure Website. Member FDIC.	4.46% Rate info The annual percentage yield (APY) is accurate as of November 7, 2024 and subject to change at the Bank’s discretion. Refer to product’s website for latest APY rate. Minimum deposit required to open an account is $500 and a minimum balance of $0.01 is required to earn the advertised APY.	$500 to open, $0.01 for max APY	Open Account for Western Alliance Bank High-Yield Savings Premier On Western Alliance Bank's Secure Website.

All in all, estimates suggest operating a bank branch location can cost at least $360,000 a year at the low end. If your branch is located in an expensive area, that could easily reach the millions.

And for what? How many people actually go to the bank in person these days?

Most people already do their banking online

The vast majority of us do our everyday banking online, either through a web browser or mobile banking app. One Forbes survey found that 78% of people prefer online banking over banking in-person.

I'm one of the people who prefers banking online. There are a ton of reasons why online banking is better, and not just for the convenience.

Opening an account is easy and fast

The last time I had to open a bank account in person it took nearly 30 minutes. I have no idea why, either, because the last time I opened a bank account online, it only took five minutes. And I did it from the sofa, in my pajamas.

I even earned a few hundred bucks for my efforts. Check out our top picks for banks with new account bonuses worth up to $300.

You can check account balances from anywhere

I've been on the type of budget that meant I needed to check my bank account balance regularly to be sure I didn't overdraft. Even now, I like to check my accounts at least weekly to be sure everything looks like I expect it to look.

No matter the reason, I have up-to-date data on my finances in my pocket at all times. And that is awesome.

You can use your phone to deposit checks

One of my favorite things about mobile banking apps is mobile check deposits. I can use my bank's mobile app and the camera on my smartphone to take pictures of paper checks and deposit them from home. This turns a 20-minute errand into a two-minute task. 

Online-only banks have better numbers

If you're like me and don't do much in-person banking anyway, then you may want to consider joining an online-only bank. They don't have all that overhead we talked about, and some of that saved money gets passed on to you through lower fees and higher savings rates.

Indeed, many of our favorite savings accounts are from online-only banks thanks to the high APYs (annual percentage yield). The higher the APY, the more you earn on your deposits.

Check out our list of top-rated high-yield savings accounts to see current APYs.

Try credit unions if you love in-person banking

If you're still not sold on online banking, or just really prefer having a nearby branch in case things go wrong, consider joining a local credit union. The nature of credit unions means they don't put profits over customer satisfaction. If anyone's going to keep branches open in the face of online banking popularity, it's probably credit unions.