Worst States for Banking Now
MoneyRates recently evaluated critical factors to assess current banking conditions, and established an updated list of U.S. states where banking conditions are especially favorable and unfavorable today. Items that were carefully assessed included:
- Breadth of choice — the number of banks based in each state, according to the FDIC
- Attrition rate — the number of 2017 bank failures in each state, according to the FDIC, as a percentage of the number of banks
- Customer satisfaction — based on an average of ratings from JD Power for major banks with branches available in each state
- Access to top rates — according to where there are branches of banks that made the MoneyRates lists of best savings and money market accounts for 2018.
In our study, each state’s rank was determined in the four categories above, and an average of those rankings led to an overall rating of banking conditions. MoneyRates identified the best and worst U.S. states to bank in for 2018. Our review of the states with the best banking conditions can be found in our article, “Best states for banking.” Below is an analysis of why certain states fell to the bottom of our list.
Worst states for banking – 2018
1. Utah
Utah is one of the few states to experience a bank failure last year; and, with a relatively small base of local banks, this is an even worse sign — the state also had one of the ten worst average overall satisfaction scores for major banks with branches in the state.
2. Alaska
As you might expect, there aren’t a lot of banking choices in Alaska. The state has the lowest number of locally based banks. Also, based on the J.D. Power overall satisfaction scores, Alaskans aren’t very happy with the choices they have of major banks with branches in the state.
3. New Jersey
This state is around the middle of the pack for the number of choices but still was one of the few states to experience a bank failure last year. Also, customer satisfaction with major banks doing business in the state ranked in the bottom ten.
4. Wyoming
Though it experienced no bank failures last year, Wyoming was below the median in every other category in this survey.
5. (tie) Vermont
Vermont offers few locally based choices, and major banks with branches in the state had a low average score for customer satisfaction.
5. (tie) Rhode Island
Since it’s such a small state, it should be no surprise that Rhode Island has the third-fewest locally based banks, but low customer satisfaction with major banks doing business in the state is a negative for the banking environment.
7. Montana
Low customer satisfaction was the biggest problem this survey found with banking in Montana.
8. Wisconsin
This was one of the few states to experience a bank failure last year and despite a relatively large number of locally based banks, none of the banks with top savings or money market accounts for 2018 is based in or has branches in the state.
9. North Dakota
Having one of the ten worst average customer satisfaction scores is the primary reason the banking environment of this state ranks in the bottom ten overall.
10. Michigan
This state was dragged down by the second-lowest average customer satisfaction score.
Our article on the best states for banking provides a view of how all states stacked up in our ranking. If your state is among those with unfavorable banking conditions, consider exploring online banks that may provide the features that are important to you.
