Different Types of Banking with Definitions

Learn of the many different types of banks, including corporate, international, offshore, retail and more that serve customers the world over.

Listing of the Different Banking Types:

While there may be some degree of similarity in services, their functions are markedly different. See some of the prominent ones in the financial system banks listed below. Follow a link below to learn more about the common types of bank account.

Corporate Banks:

Corporate banking has to do with the providing of products and service to corporate clients, separate from retail services. These banking institutions offer their clients special services such as wealth management as well as private banking.

International Banking:

International banks (also called overseas or foreign banks) have their headquarters in one country but conduct much of their business in other parts of the world.

Merchant Banking:

Merchant banks deal with the trading of shares issues by companies, such as initial public offering.

Offshore Banking:

This type of banking involves the holding of accounts for companies that conduct business outside of the country where the bank is registered. Offshore banks do not offer checking accounts, savings accounts, loan or other deposit accounts in the country where they operate.

Retail Banking:

Retail banks offer different banking accounts and banking services personally and directly to their customers. These include credit and debit cards, loans, savings accounts, and more. You can also open a checking account at one of these banks. They attract money by the interest rates they apply to account balances. Retail banks are usually private sector entities. Some pay higher interest rates on savings accounts than do others. Other services of a retail bank include personal loans, business loans, safe deposit boxes, credit cards and certificates of deposit cds. The credit union is one competition that these banks face because of the high interest they pay on a savings account. One can also get a debit card from a credit union.

Other Types of Banks

Commercial Banks:

Commercial banks involves the acceptance of deposits, the making of loans, as well as bill finance, investment management and more. Today, these banks give credit cards, savings and checking accounts as well as financial services to their customers. Some of these banks also serve as foreign exchange banks. They, like other types of financial institutions including credit unions, provide online banking services to customers.

Investment Banks:

Investment banks handle securities business for their customers for which they receive commissions. These banks give a wide range of services to customers. These include investment advice to various types of bank customer They also provide assistance and advice on money management and cash flows for small and medium industrial and manufacturing companies. An investment bank does not normally open checking and savings accounts or give home loans and credit card.

Other financial institutions include trustee savings banks, national banks, central banks and credit unions. There are also cooperative banks, development banks and reserve bank. These simply accept deposits of private individuals and pay interest on them. Others are overseas and foreign banks. Overseas banks have head offices in their home countries but conduct much of their business transactions in other parts of the world. Additionally, there are consortium banks whose share capital is owned by several other banks, often in various parts of the world. Their purpose is to serve the needs of the multi-national customer. Each financial institution, including the commercial bank, operating in the banking system do so usually under the oversight of the central bank. Those that operate in the UK come under the supervision of the Central Bank of England. There is also the federal reserve in the United States with its own regulations.

General Banking Functions

Banking is concerned with the acceptance of money on deposit and the use of that money to offer other services to customers. Banks provide short and long term personal, government and business finance through credit. Banking also involves the investing of money in a variety of ways. These bank accounts and services produce an income to the bank concerned. Some other functions of banks have been listed above, however you can read more details on the respective pages. You will find all of them here at ymhbanking.com. Just follow a link to learn more.

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