What the Big Bank Challenge is

The Big Bank Challenge is a social media trend where people move money out of large national banks and into smaller banks or credit unions, usually over a set period like a week or a month. The goal is to shift deposits away from major institutions—typically the largest banks by assets—and toward community banks, regional banks, or credit unions that operate differently.

The challenge does not involve closing your account or moving all your money permanently. Most people who participate open a new account at a smaller institution, move some or all of their deposits there, and keep the account open for at least the challenge period. Some people keep the smaller bank account afterward; others move their money back.

The trend gained attention in 2023 after several bank failures and periods of financial instability, when people began questioning whether their money was safer at smaller institutions. It has resurged at various points since, usually tied to news about bank mergers, interest rates, or concerns about how large banks operate.

Key Takeaways

  • The Big Bank Challenge is a social movement to move deposits from large national banks to smaller banks or credit unions, usually for a defined period.
  • Deposits at banks and credit unions insured by the FDIC or NCUA are protected up to $250,000 per account holder per institution, regardless of bank size.
  • Smaller banks and credit unions often offer higher savings rates and lower fees, but may have fewer branches or ATMs than large national banks.
  • Moving money between banks is free and takes one to three business days through standard transfer methods; you do not need to close your existing account.
  • The challenge has no official rules or organizers—it is a voluntary social media movement, not a coordinated financial campaign.

Why people participate in the Big Bank Challenge

People join the challenge for different reasons. Some distrust large banks after high-profile failures or mergers. Others want to move their money to institutions they see as more community-focused or less profit-driven. Some are motivated by practical reasons: smaller banks and credit unions often pay higher interest on savings accounts and charge lower fees on checking accounts.

The social media aspect matters too. The challenge spreads through posts and videos where people announce they are moving their money and encourage others to do the same. This creates a sense of collective action, even though each person's decision is independent.

A few participants are motivated by the idea that moving deposits affects bank lending and business practices. The logic is that if enough people move money, large banks will have fewer deposits to lend and may change their policies. Whether this actually happens at scale is debated among economists.

How deposit insurance works regardless of bank size

One common misconception is that money is safer at smaller banks. In reality, deposit protection is the same. The FDIC (Federal Deposit Insurance Corporation) insures deposits at banks up to $250,000 per depositor per institution. The NCUA (National Credit Union Administration) provides the same coverage at credit unions.

This means your money is protected equally at a large national bank and a small community bank, as long as both are FDIC or NCUA insured. You can check whether a bank or credit union is insured by searching the FDIC's BankFind tool or the NCUA's credit union locator on their websites.

The $250,000 limit applies per account holder per bank. If you have $200,000 in a checking account and $100,000 in a savings account at the same bank, only $250,000 is covered. If you move the $100,000 to a different bank, both amounts are now fully covered.

Practical differences between large and small banks

While deposit safety is equal, large and small banks do differ in other ways that matter to daily banking. Large national banks typically have thousands of branches and ATMs nationwide, making it easy to deposit checks, withdraw cash, or speak to a person in person. Small banks and credit unions usually have far fewer locations, which can be inconvenient if you travel or live in a rural area.

Fees and interest rates often favor smaller institutions. Community banks and credit unions frequently offer higher interest rates on savings accounts and money market accounts, and lower fees on checking accounts, overdrafts, and transfers. Large banks often charge monthly maintenance fees, overdraft fees of $30 to $35 per incident, and pay minimal interest on savings.

Customer service models differ too. Large banks rely heavily on phone lines, chat, and apps. Smaller banks and credit unions may offer more personal relationships with loan officers or account managers, though their phone lines can be slower during peak hours. Credit unions are member-owned, which means profits are returned to members rather than paid to shareholders.

How to move money between banks

Moving money from one bank to another is free and straightforward. The most common method is an ACH transfer (Automated Clearing House), which moves money electronically between accounts. You initiate this through your current bank's website or app by providing the new bank's routing number and your new account number. The transfer typically takes one to three business days.

You can also write a check to yourself, deposit it at the new bank, and wait for it to clear—usually three to five business days. Some banks offer wire transfers, which are faster (same day or next day) but may charge a fee of $15 to $30.

You do not need to close your old account to move money. Many people keep both accounts open: the old one for bills or direct deposits that are hard to change, and the new one as their primary account. You can close the old account later if you want, or keep it as a backup.

What happens to your old bank account

If you move money to a new bank as part of the challenge, your old account remains open unless you close it. You can still use it to receive deposits, pay bills, or access cash. Some people leave a small balance in the old account in case a payment bounces or a company tries to charge a fee they did not expect.

If you want to close the account, contact your bank and ask about their closure process. Most banks will close an account with a zero or near-zero balance immediately. If there is still money in the account, you will need to transfer it out first. Some banks charge a fee to close an account early (usually within a year of opening), though this is less common now.

Closing an account has a small impact on your credit score because it reduces your available credit and changes the average age of your accounts. The impact is usually minor and temporary, but if you are planning to apply for a loan soon, you may want to wait.

Choosing a smaller bank or credit union

If you want to participate in the challenge, start by deciding what matters to you: higher interest rates, lower fees, local presence, or a specific mission. Then search for banks and credit unions in your area or online that match those priorities.

Check whether the institution is FDIC or NCUA insured before opening an account. Look at the fee structure: monthly maintenance fees, overdraft fees, ATM fees, and transfer fees. Compare interest rates on savings and money market accounts using sites like Bankrate or DepositAccounts, which list rates from hundreds of institutions.

Read reviews on sites like Trustpilot or the Better Business Bureau, but remember that people are more likely to leave reviews when they are angry. A bank with a 3.5-star rating may be perfectly fine. Open an account online or in person, and set up a transfer from your old bank once the new account is active.

Frequently Asked Questions

Is my money safer at a small bank than a big bank?

No. Both are insured by the FDIC or NCUA up to $250,000 per account holder per institution. Safety depends on whether the bank is insured, not its size. You can verify insurance status on the FDIC's BankFind tool or the NCUA's credit union locator.

How long does it take to move money between banks?

An ACH transfer takes one to three business days. A wire transfer is faster (same day or next day) but usually costs $15 to $30. A check deposit takes three to five business days. You do not need to close your old account to move money.

Will closing my bank account hurt my credit?

Closing a checking account has minimal impact on credit because checking accounts do not appear on your credit report. Closing a savings account or money market account also has no direct impact. The small effect comes from reduced available credit if you close a credit card, not a bank account.

Can I keep both accounts open?

Yes. Many people keep their old account open for direct deposits or automatic payments while using the new account as their primary account. You can close the old account later or keep it as a backup. Some banks charge a fee to close an account within the first year, so check your account agreement.

What if I move my money and then want to move it back?

You can move money back to your original bank or to a different bank at any time using the same ACH transfer process. There is no penalty for moving money between banks. Some people use the challenge as a trial period to see if they prefer the smaller bank before deciding to stay.