What are the different types of banks ?

Banks as we know them are just for depositing money and then withdrawing it, or we think banks are for making loans. However, there are different types of banks and they have different charges and different fields of action. Follow the guide to know all about different kinds of banks.

Commercial Banks

Commercial banks are also called retail banks. This is the type of bank that is in front of the singular people or persons.  In other words, these are the banks where we all have our bank accounts and savings accounts. Among commercial banks, there are different types of banks: traditional banks, online banks and mobile banks.

In addition, there are also deposit-only banks that do not offer any services other than deposits.

Business and investment banks

These institutions deal with corporate finance. They accompany large companies by offering various banking services such as strategic and financial monitoring. This is the kind of bank that deals with large companies and their business. Here, the stakes are enormous.

The investment banking business is focused on the capital markets. They buy and sell stocks, bonds or derivatives in the financial markets. They can also release funds for startups, and they can handle foreign exchange transactions.

Central Banks

As you know, central banks are the banks of banks. Most countries are attached to a central bank.   As a result, these central banks govern the world economy. They are in charge of currency creation.

In addition, central banks also set the policy rate for the economy.  This policy rate is nothing more than the rate at which ordinary banks make loans to the latter. Therefore, this rate has an influence on all other interest rates, such as home loans and consumer loans.

There are many kinds of banks that have different charges. These different financial institutions are governed by the bank of banks.