How Raisin partners with community banks and credit unions to provide higher APYs
Key takeaways
Community banks often offer higher APYs because they lack the expensive national branch networks of "big-box" banks, passing those operational savings directly to you.
Through Raisin, community banks can access a national pool of depositors to fund local lending, like small business loans and mortgages, without the cost of physical expansion.
Many Raisin partners are Community Development Financial Institutions (CDFIs) or Minority Depository Institutions (MDIs), meaning your high-yield savings specifically support underserved communities.
If you look at the interest rates offered by the nation’s largest banks, you might notice a frustrating trend: despite their size, their savings rates are often among the lowest in the country. Conversely, smaller, local institutions frequently offer significantly higher Annual Percentage Yields (APYs).
This creates a paradox for many savers. You want the security and technology of a large platform, but you want the rates of a community bank. Raisin solves this by acting as the digital bridge, bringing the competitive rates of local institutions to a national audience. But why can these smaller banks afford to pay you more in the first place?
The overhead gap: Why "big" doesn't mean "better" for rates
Traditional national banks maintain thousands of physical branches, massive advertising budgets, and tens of thousands of employees. These "legacy costs" are immense. To remain profitable while maintaining this infrastructure, large banks often keep their deposit rates low. Because they have high brand recognition, they don't feel the need to compete on price (APY) to attract customers.
Community banks and credit unions operate on a different math. Most have only a handful of branches and local staff. By partnering with Raisin, they can bypass the need for a national marketing department or a branch on every corner. They use the Raisin marketplace as a "digital branch," allowing them to offer market-leading rates because their cost of acquiring your deposit is significantly lower than that of a traditional bank.
How the Raisin marketplace levels the playing field
For a community bank in Oklahoma or a credit union in New York, finding new depositors used to be limited by geography. If they needed to raise capital to fund local mortgages or small business loans, they could only ask the people in their immediate town.
Targeted liquidity and local lending
When a bank joins the Raisin network, they gain instant access to savers nationwide. This allows them to source "targeted liquidity." If a bank needs to grow its lending portfolio, it can offer a competitive APY on the Raisin marketplace to attract the exact amount of funding it needs.
This is a win-win: the bank gets the capital it needs to support its local community, and you get access to top-rated high-yield savings accounts that you would otherwise may never have found.
Mission-driven saving: CDFIs and minority-owned banks
One of the most unique aspects of the Raisin partner network is the inclusion of mission-driven institutions. We partner with many Community Development Financial Institutions (CDFIs) and Minority Depository Institutions (MDIs), such as Ponce Bank and City First Bank.
CDFIs are certified by the U.S. Treasury to provide affordable financial services to low-income and underserved communities.
MDIs are institutions where a majority of the voting stock is owned by minority individuals or that primarily serve minority communities.
When you save with these partners through Raisin, your money isn't just sitting in a vault. It is being put to work in "under-banked" areas, helping to fund affordable housing, community facilities, and diverse small businesses. You earn a high return while knowing your deposits are fueling social and economic equity.
Is my money safe in a small community bank?
A common misconception is that a bank is only as safe as its brand name is famous. In the United States, safety is determined by federal regulation and insurance, not institutional size.
Every bank partner on the Raisin platform is a member of the FDIC, and every credit union partner is insured by the NCUA. This means your deposits are protected by the full faith and credit of the U.S. government up to $250,000 per depositor, per institution, subject to certain conditions. Whether the bank has one branch or one thousand, your protection is identical. Raisin’s secure banking technology ensures that your connection to these institutions is encrypted and managed with institutional-grade security.
Comparing the experience: Big bank vs. Raisin partner
Feature | Raisin Partner | Large National Bank |
Average APY | As high as 3.95% | 0.41% national average |
Overhead Cost | Low (Local or digital focused) | High (Thousands of branches) |
Community Impact | Direct local reinvestment | Global/corporate focus |
Safety | FDIC or NCUA Insured | FDIC Insured |
Bottom line
The higher APYs found on the Raisin marketplace aren't a marketing gimmick — they are the result of a more efficient banking ecosystem. By removing the middleman costs of physical branches and national advertising, community banks can afford to pay you more for your deposits.
Through Raisin, you can support these local, mission-driven institutions and enjoy the financial benefits of their lean business models, all while keeping your funds 100% federally insured.
Frequently asked questions
Why do small banks pay more interest than large banks?
Small banks often pay more interest because they have lower operating expenses. They don't have to maintain massive national branch networks or multi-million dollar advertising campaigns. To compete for deposits with "megabanks," they may use platforms like Raisin to offer higher rates directly to consumers, passing their operational savings on to the saver.
What is a Community Development Financial Institution (CDFI)?
A CDFI is a financial institution that has been certified by the U.S. Department of the Treasury to serve low-income and underserved communities. These institutions have a primary mission of promoting community development. Saving with a CDFI allows you to earn a competitive return while supporting economic growth in areas that have historically had limited access to traditional banking services.
How does my deposit at a community bank help the local economy?
Community banks are the lifeblood of local economies. Unlike national banks that might use deposits for global investments, community banks primarily use their deposits to fund local loans. This includes mortgages for families in their area, small business loans for local entrepreneurs, and agricultural loans for local farmers.
Are community banks as secure as national banks like Chase or Bank of America?
Yes. From a depositor's perspective, a community bank is just as secure as a national bank because they are both governed by the same federal insurance standards. As long as the institution is a member of the FDIC (for banks) or insured by the NCUA (for credit unions), your money is protected up to $250,000 per institution, regardless of how large or small the bank is.
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The above article is intended to provide generalized financial information designed to educate a broad segment of the public; it does not give personalized tax, investment, legal, or other business and professional advice. Before taking any action, you should always seek the assistance of a professional who knows your particular situation for advice on taxes, your investments, the law, or any other business and professional matters that affect you and/or your business.
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*APY means Annual Percentage Yield. APY is accurate as of April 29, 2026. Interest rate and APY may change after initial deposit depending on the terms of the specific product selected. Minimum opening deposit is $1.00.
Raisin is not an FDIC-insured bank, and FDIC deposit insurance only covers the failure of an insured bank.
Raisin is not an NCUA-insured credit union. NCUA deposit insurance only covers the failure of an insured credit union.
Raisin does not hold any customer funds. Customer funds are held in various custodial deposit accounts. Each customer authorizes the Custodial Bank to hold the customer’s funds in such accounts, in a custodial capacity, in order to effectuate the customer’s deposits to and withdrawals from the various bank and credit union products that the customer requests through Raisin.com. The Custodial Bank does not establish the terms of the bank or credit union products and provides no advice to customers about bank or credit union products offered by the applicable bank or credit union through Raisin.com. Each customer also authorizes the Service Bank to move funds among the various banks and credit unions at the customer’s request. First International Bank & Trust (FIBT), Member FDIC, is the Service Bank. Bell Bank and Starion Bank, each Member FDIC, are the Custodial Banks.
†Based on $250,000 in FDIC or NCUA insurance coverage per insurable category of ownership at each partner bank or credit union on the Raisin platform (each a "Product Bank"), when aggregated with all other deposits held by you at such Product Bank and in the same insurable category. Deposits made through Raisin will be eligible to receive deposit insurance from the FDIC or the NCUA (each a "Deposit Insurer") in accordance with and up to the maximum amount permitted by law at each Product Bank. Raisin is not a bank or credit union and does not hold any customer funds. Funds are held at FDIC-insured banks and NCUA-insured credit unions. Deposit insurance covers the failure of an insured bank or credit union. Certain conditions must be satisfied for pass through deposit insurance coverage to apply. Customers may choose to deposit funds with identically registered accounts at different Product Banks on the Raisin platform to be eligible for Deposit Insurer coverage up to $10 million for individual accounts and $20 million for joint accounts when at least 40 Product Banks are utilized. Please be aware, however, that any deposits you have at a Product Bank, whether through the Raisin platform or outside the Raisin platform, that you may hold in the same capacity (such as in an individual capacity or joint capacity) count toward the applicable Deposit Insurer's deposit insurance maximum amount, and any such amounts that you hold in the same capacity at a Product Bank that exceed the maximum insurance coverage by the applicable Deposit Insurer will not be insured. For more information on FDIC deposit insurance, please see here. For more information on the NCUA share insurance fund, please see here. You are solely responsible for monitoring the amount of funds you have on deposit at each a Product Bank, whether through the Raisin platform or outside the Raisin platform, to confirm that the deposits you hold in the same capacity at each Product Bank do not exceed the maximum deposit insurance coverage provided by the applicable Deposit Insurer.