Ohio is the Best State for Banking and Illinois is the Worst, According to New MoneyRates.com Survey

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Ohio tops MoneyRates.com’s list of the best states for banking, earning the spot through high customer-satisfaction marks and zero bank failures in 2012. Illinois earns the distinction of the worst state for banking, due to low satisfaction ratings from its bank customers and one of the highest rates of bank failures in the nation.

While customers often cannot see a bank failure coming, what they can judge is customer service. Drastic cost cutting at a distressed bank can lead to poor customer service, and poor service can also cause a bank to lose business.

A new MoneyRates.com analysis reveals consumers in Ohio experienced the best banking conditions in the nation in 2012, while Illinois bank customers had it worse than those in any other state. Ohioans enjoyed one of the highest levels of customer satisfaction and zero bank failures. Illinois residents suffered through eight bank failures – nearly one-sixth of the U.S. total – and one of the lowest customer-satisfaction scores in the nation.

Ohio’s customer-satisfaction score was the fifth-best in the nation, and with 232 FDIC-insured institutions operating in the state, the absence of bank failures was notable. The state also earned points as the home of Nationwide Bank, one of the top banks for money market account rates in MoneyRates.com’s latest America’s Best Rates Survey.

Kentucky placed second in the survey, posting zero bank failures in 2012 plus the country’s sixth-highest customer-satisfaction marks. Similarly, Louisiana garnered third place with no failures and very high satisfaction ratings from the state’s bank customers.

Illinois earned its worst-state ranking by posting the seventh-highest rate of bank failures and the tenth-worst customer-satisfaction score in the nation. South Carolina and Oklahoma were the second and third worst states for banking, with both posting below-average scores for bank failures and customer satisfaction.

The survey results show banking conditions are far worse in some states than others. In 2012, 43 of the 51 bank failures were concentrated in just nine states. But for consumers in states that fared poorly in this survey, finding a better bank isn’t necessarily a matter of moving, according to Richard Barrington, senior financial analyst for MoneyRates.com.

“For people who live in some of the weaker states for banking, the answer may be to look at regional or national banks based in other states that make products available in your area,” Barrington says.

Recent rate and fee surveys from MoneyRates.com indicate that online banks generally offer lower fees and higher interest rates than brick-and-mortar banks. Because online banks are usually accessible to consumers in all states, they may also offer an option for customers who have struggled to find a suitable bank in their area.

Barrington says that customers who have found declining customer service at their local branch may also want to watch their bank’s financial health.

“While customers often cannot see a bank failure coming, what they can judge is customer service,” Barrington says. “Sometimes, this can go hand-in-hand with the financial health of a bank – drastic cost cutting at a distressed bank can lead to poor customer service, and poor service can also cause a bank to lose business. In any case, banking is a very competitive business, with lots of options for customers, so there is no need to put up with sub-par service from your bank.”

For the full details on the survey, please see MoneyRates.com’s best and worst states for banking.

MoneyRates.com's best and worst states for banking is based on bank-failure data from the Federal Deposit Insurance Corporation (FDIC), exclusive bank customer-satisfaction rankings from Toluna and the results of MoneyRates.com’s America’s Best Rates surveys. In the case of ties, the number of banks in the state, which indicates the number of choices available to that state’s consumers, is used as a tiebreaker.

About MoneyRates.com
MoneyRates.com has been a leading source of information on bank rates, personal finance, savings accounts and investing since 1999. The site seeks to provide the highest rates on certificates of deposit, money market accounts and high-yield savings accounts. MoneyRates.com is owned and operated by QuinStreet, Inc. (NASDAQ: QNST), one of the largest Internet marketing and media companies in the world. QuinStreet is committed to providing consumers and businesses with the information they need to research, find and select the products, services and brands that best meet their needs. The company is a leader in ethical marketing practices. For more information, please visit QuinStreet.com.

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