Commercial Bank: Definition, Types, and Services

What is a Commercial Bank?

A commercial bank is a type of financial institution that provides various banking services to individuals, businesses, and organizations. These banks accept deposits, offer loans, and provide other financial products and services. They play a crucial role in the financial system by facilitating the flow of funds between depositors and borrowers.

Types of Commercial Banks

There are different types of commercial banks, each with its focus and target customer base:

1. National Banks

These banks are chartered and regulated by the federal government. They typically have a large branch network and offer a wide range of financial services.

2. State Banks

These banks are chartered and regulated by individual state governments. They primarily operate within a specific state and may offer services tailored to the local economy.

3. Regional Banks

Regional banks have a presence in multiple states within a specific region of the country. They focus on providing financial services to businesses and individuals in their operating areas.

4. Community Banks

Community banks are smaller institutions that serve specific communities. They often have a strong focus on personal relationships and provide banking services tailored to local needs.

Services Offered by Commercial Banks

Commercial banks offer a comprehensive range of services, including:

Deposit Accounts: Savings accounts, checking accounts, and money market accounts
Loans: Personal loans, business loans, mortgages, and lines of credit
Investments: Brokerage services, mutual funds, and other investment products
Cash Management Services: Cash flow management, payroll processing, and merchant services
Online Banking: Access to banking services through websites and mobile apps