8 Common Types of Banks You Can Save Your Money

When we talk about money, the institution that generally comes in our mind is a bank. Banks accepts deposits for our savings accounts. They also offer a wide variety of loans and other financial services. Thus, there are 8 common types of banks that provide different services to consumers, businesses and large corporations.

Retail Banks

Retail banks are commonly known as consumer banks. They provide services to individual consumers rather than companies, corporations, and other banks. They handle savings and checking accounts. They also offer personal loans, home loans, auto loans, debit and credit cards, mortgages and other transactional accounts, among others. Retail banks are usually situated at areas with a greater number of people.

Commercial Banks

A commercial bank is a type of financial institution that focuses on business customers. They provide services such as accepting deposits, granting business loans and offering basic investment products. They also offer lockbox services, payment and transaction processing and foreign exchange.

Investment Banks

An investment bank is a specific division in banking that focuses on helping businesses work in financial markets. If a business wants to sell debts to investors or go public, they will seek the help of investment banks. They are also related to the creation of capital for companies, governments, and other entities.

Central Banks

Also called as a reserve bank, a central bank is an institution that manages a state’s currency, interest rate, and money supply. They oversee the commercial banking system in respective states and countries. They also serve as a last resort to various banks experiencing a financial crisis.

Credit Unions

A credit union is similar to a bank in terms of services – savings, loans and other transactions. However, it is a member-owned financial cooperative and is democratically controlled and operated by the members. They also provide credits at promising interest rates and other financial services to its members. As a not-for-profit organization, their services vary according to the size of the union and the financial capacity of the members.

Online Banks

From the word online, this bank operates on the internet which means they have no physical bank with a personal banker or teller. Online banks allow you to pay bills, transfer funds and apply for loans with very competitive interest rates. However, there are disadvantages as you may be prone to phishing and other internet frauds.

Mutual Banks

This type of bank is similar to a credit union as it is operated by its members. They also offer similar services with retail banks. On the other hand, profits after deductions are shared among the members which allow them to grow their capitals.

Savings and Loan Banks

These banks are less prevalent, however, they are still important. They are banks solely created for savings or for loan programs or both. Basically, their core system it to take the savings from its members and offer it as a loan to others.

If you want to save money, go to the nearest bank and become a member. Banks can offer you a wide variety of services.