Types of banks

When you think of what a bank is, you probably have a fairly simplistic view. In fact, it’s the kind of opinion the majority of people have about banks. But did you know there are different types of banks ? Did you know that banks do more than just store your money away? There is certainly a lot more to think about when considering banking for your needs, whether you’re looking for personal or business banking solutions. Choosing a type of bank that’s right for you is crucial if you want to make the most of your money. With that in mind, this guide should help you understand the basics and give you an overview of what you should be looking for. Read on to find out more. Are There Different Types of Banks and Different Types of Accounts? Banks and other financial organizations come in all shapes and sizes and provide a wide range of services. The key to finding the right bank for your money is to know how various banks are organized and how they serve the community. The fact that there are a number of different kinds of banks for you to choose from, and then, within those banks, there are different accounts you can opt for means that no matter how you want to manage your money, there will be a solution for you. How Do Banks Work? In addition to deposit and withdrawal services, banks provide currency exchange, foreign exchange trading, and wealth management services. The monies placed by the clients are used to give loans. So, banks serve as middlemen between depositors and ...

A bank is a bank no matter where you go, right? Not quite. On the surface, they may all look the same, but there are some important differences you should know about before opening a bank account. Read on to learn more about different kinds of banks, plus the most important questions to ask before choosing one. What are the different types of banks? 1. Retail banks 2. Credit unions 3. Online/mobile banks These are the most common types of banks that offer the standard checking and savings accounts. Now, let’s go into a little more detail about the differences between each type of bank. Retail banks Retail banks are the ones with which most consumers are familiar, like Bank of America, Wells Fargo, or Chase. Their customers are the general public, and almost anyone can go to a retail bank and sign up for either a Besides offering basic accounts, retail banks also offer additional services such as loans, credit cards, and investment solutions. Banks belonging to a chain usually have branches located across the entire United States. However, there are also local or community banks that may only have a branch or two, but they are much more focused on the needs of the community which they serve. Retail banks are typically open Monday through Friday, though some are also open on Saturdays for their customers’ convenience. All banks are closed on national holidays. Services are mostly available in English; however, some banks may offer services in other languages such as Spanish,...

At its most basic level, a bank is a place to safely keep your money. But beyond the basics, banks usually offer a wide range of products and services designed to make managing your money a bit easier. From car loans to credit cards, there are plenty of banking services you may need at different stages of life. And with digital options, you can access many of them right from your phone or laptop. Below is a review of financial topics that may help you learn banking basics. There’s also a glossary of terms at the end. Why should I put my money in a bank? Keeping large sums of money at home can be risky. Even though the odds may be small, there’s always the chance of loss, theft or even a natural disaster. When you deposit money in a bank that’s insured by the Dealing with cash for everyday expenses can be a bit cumbersome. Besides that, a bank account allows you to track your expenses in a single place, which can be helpful if you’re monitoring a budget or building a savings account. Paying bills online can also simplify the process (as opposed to buying stamps and mailing checks). Another consideration? Interest. Cash hidden in the cookie jar or under the mattress can’t multiply. But an account that earns interest pays you just for keeping your money there. Rates of interest vary from bank to bank, and from account to account, so you may want to shop around before deciding where to stash your cash. Here’s more info on ways you can bank and services that are offered: Ways t...

Under the umbrella of banking and finance, the industry has commercial banks—which are consumer facing like Bank of America—as well as central banks—the government entities that regulate the industry and manage monetary policy. What are Central Banks? Central banks handle the money supply for a single country or series of countries. They control interest rates and the flow of currency. The independent institutions work to prevent inflation and strive to keep the unemployment rate low. In the U.S., the central bank is known as the Federal Reserve System or “the Fed.” It was established by Congress in 1913 in order to ensure the safety and soundness of the nation’s banking and finance system. The European Union has a similar organization, the European Central Bank, which oversees banking and finance for 19 countries. What are Commercial Banks? A commercial bank is a financial institution such as Bank of America or Chase that provides banking services to the general public and businesses. Commercial banks offer products such as checking and savings accounts, credit cards and business loans. These financial institutions make money by charging interest on services like credits cards and loans. On the flip side, when an individual places money in a savings account, they are effectively lending money to the bank and can earn interest on their money. How Do Central and Commercial Banks Engage With Each Other? While the central banks oversee the industry, consumers most commonly en...

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You’re our first priority. Every time. We believe everyone should be able to make financial decisions with confidence. And while our site doesn’t feature every company or financial product available on the market, we’re proud that the guidance we offer, the information we provide and the tools we create are objective, independent, straightforward — and free. So how do we make money? Our partners compensate us. This may influence which products we review and write about (and where those products appear on the site), but it in no way affects our recommendations or advice, which are grounded in thousands of hours of research. Our partners cannot pay us to guarantee favorable reviews of their products or services. Spencer Tierney is a consumer banking writer at NerdWallet. He has covered personal finance since 2013, with a focus on certificates of deposit and other banking-related topics. His work has been featured by The Washington Post, USA Today, The Associated Press and the Los Angeles Times, among others. He is based in Berkeley, California. Yuliya Goldshteyn is a banking editor at NerdWallet. She previously worked as an editor, a writer and a research analyst in industries ranging from health care to market research. She earned a bachelor's degree in history from the University of California, Berkeley and a master's degree in social sciences from the University of Chicago, with a focus on Soviet cultural history. She is based in Portland, Oregon. To operate, a bank has t...

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Bank accounts offer convenience, safety and security for your money. Whether you bank online or prefer a traditional bank or credit union, there are numerous account options from which to choose. Different types of bank accounts can serve different purposes, depending on your needs. Some allow you to spend or pay bills, while others are designed for short- or long-term savings. The most common types of bank accounts include: • Checking accounts • Savings accounts • Money market accounts (MMAs) • Certificate of deposit accounts (CDs) Understanding how the different types of bank accounts compare can make it easier to decide where to keep your money. Checking Account Basics A Here are some of the key features of checking accounts in general: • Designed to hold funds you plan to spend or use to pay bills • Typically come with a debit card for making purchases or cash withdrawals • May come with paper checks as well • Can be linked to other types of bank accounts, including savings accounts It’s important to note that checking accounts aren’t all alike in terms of the features or benefits they offer. Banks can offer multiple • Kids or teen checking • Student checking • Senior checking • Interest checking • Rewards checking A basic checking account is generally the most common option you’ll find. With a basic checking account, you may be able to spend using a debit card, pay bills online or via paper check and transfer funds to or from linked accounts. Basic or standard checkin...

Types of Banks There are different types of banks and personal banking services providers you may want to review before making a decision on where to put your money. Digital Banks Digital banking and online banking providers are taking over the more traditional banking. These banks, which are not always banks per se, offer the same services as a traditional bank but they have no branches or offices and everything is done online or through your mobile app. Even if they are no traditional banks, they usually hold your money in an insured and regulated account that is held at an FDIC-insured bank. So you can get the benefits of managing your finances from anywhere and the peace of mind of your money being regulated and insured. Ethical Banks There is a banking trend in the last few years where people are choosing to bank or purchase, or basically spend their money where their values are. These ethical companies or banks usually support a cause like helping the environment, or will not use your money to fund initiatives that go against the cause they support. This does not mean they are not interested in making a profit, however they won’t do it at the cost of their principles. Types of Bank Accounts​ There are different types of bank accounts you need to understand before opting for the best solution for you. 1. Checking Accounts​ A certificate deposit (or CD) Account is a type of savings account, federally insured. This means this type of account is “risk-free” since the mon...