There are different types of banks for different lines of business. They are called or referred to with different names. Some of these banks sometimes can function as several types of banks.
Let us go over the different type of banks to understand better how each one function:
- Retail bank.It provides basic banking services like checking and savings accounts, cash deposits, safe deposit boxes, mortgages, car loans, and credit cards to the general public. Often this type of bank also functions as a commercial bank.
- Commercial bank. It handles the banking needs of businesses. Some of the services rendered by commercial banks are basic accounts, loans for capital purchases, credit lines, payment and transaction processing and foreign exchange.
- Central bank.It handles the banking activities of all banks. The major function of a central bank is to conduct monetary policy, supervise and regulate financial institutions and companies and provide services that other banks render.
- Online bank. This is newest type of bank. Transactions like opening accounts, fund transfers, online bill payments, payment for online purchases, applying for loans, do purchases using debit cards and checking balances and credit balances of credit cards are done through the Internet.
- Savings and loans bank. This type of bank makes it possible for depositors to acquire homeownership and focuses on home mortgage. It encourages people to save money.
With the different types of bank, there is one that can serve the depositor’s requirements. These banks cater to the financial needs and requirements of businesses and individuals.