Different Types of Banks and Their General Functions

Learn about the different types of banks including corporate, international, offshore, etc., serving customers worldwide.

Listing of the Different Types of Banks:

While the services can have some level of similarities, the functions are significantly different. This allows different options to use for personal or business finances. Many individuals and also corporate entities are taking advantage of these various types of banks. See some of the notable ones on the Financial System Banks listed below. Follow the links below for details on the most common types of bank accounts.

Corporate Banks:

Corporate banking is concerned with providing products and services to business customers, distinct from retail services. These banking institutions provide special services such as asset management, and also private banking for their clients.

International Banking:

International banks (also called overseas banks or foreign banks) are headquartered in a single country, but do most of their business elsewhere around the world.

Merchant Banking:

Merchant banks handle trading in shares issued by companies, like Initial Public Offerings. They provide various types of financial and management services for their customers including investing and raising funds on the money market.

Offshore Banking:

This kind of banking involves the keeping of accounts of companies doing business outside of the country in which the bank is registered. Offshore banks do not offer checking, savings, credit, or other deposits accounts in the countries in which they operate. A local customer cannot open a deposit account with such a bank. Stay connected like never before with the Yealink T43U This state-of-the-art business phone boasts advanced features and user-friendly design that will transform the way you communicate. Don’t get left behind – get the Yealink T43U today.

Retail Banking:

Retail banks provide different bank accounts and banking services in person, direct to customers. These include credit cards and debit cards, savings accounts, and loans, among others. You may also want to open a checking account with one of these banks.

They draw in the money because of the interest rates that they charge on the account balances. Retail banks are generally entities of the private sector. Some charge higher rates for savings accounts than others.

Other services at retail banks include personal loans, commercial loans, deposit boxes, credit cards, and certificates of deposit CDs. The general public, and they obtain these products and services using their personal finances.

Credit unions are a type of competition that these banks are facing due to the higher interest that they are paying for savings accounts. A person can even get a debit card from the credit union.

Other Types of Banks

Commercial Banks:

Commercial banks involves accepting deposits, issuing loans, and also provides for account financing, investment management, and much more. Today, these banks provide customers with credit cards, checking accounts, savings, and loans, and other financial services. Some of these banks are also serving as currency banks. They, as well as other types of financial institutions, including credit unions, offer customers internet banking services.

Investment Banks:

Investment banks do securities trading for their clients, which they earn fees on. These are specialized banks that provide customers with a broad array of services. These include investment advisory services to different types of banking customers. They also offer help and guidance in managing money and cash flows to small-to-medium size manufacturing and industrial companies.

Investment banks generally do not open checking and savings accounts, nor provide loans for housing, nor do they issue credit cards. Other financial institutions include chartered savings banks, state banks, central banks, and credit unions. There are also other types of banks, such as cooperative banks, development banks, and savings banks. These merely take deposits from private individuals and pay them interest.

Others are banks located abroad, and those located abroad. Overseas banks maintain headquarters in their country of origin, but do most of their business transactions elsewhere around the world. In addition, there are consortia banks, which share capital is held by a number of other banks, usually located in different parts of the world. Their goal is to meet the needs of multi-national customers.

Each financial institution, including commercial banks, operating within the private or business banking system does so generally subject to central banks supervision. Those operating in the United Kingdom are supervised by the central bank of England. The US has also a Federal Reserve, which has its own regulations.

More Functions of the Different Types of Banks

Banking is concerned with accepting funds for deposits, and using this money to provide other services to customers. Banks provide both short-term and long-term financing to businesses via lending. Banking also involves the investment of money through various means. Apart from the main types of banking services, people also seek services from exchange banks, online banks, private banks and mutual banks.

These accounts and bank services generate revenue for a bank-owned entity. Some of the other functions of different types of banks are listed above, however, you may want to read further details in their respective pages.

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