Commercial banking provides financial services to various clients, including small-to-medium-sized organizations and customers. They offer everyday banking services to consumers, like mobile banking or opening a credit card, as well as loans and lines of credit to businesses. Commercial banks profit from service fees and interest and are operated by tellers, sales teams, and branch managers. While commercial banks have historically operated from physical branches, some now function exclusively online.
What are commercial banking services and products?
While not all-inclusive, here’s a summary of how consumers and small-to-mid businesses can benefit from commercial banks.
- Asset protection like safe deposit boxes: A secured container or box held in a bank vault for safe-keeping items like personal paperwork, collectibles, or heirlooms.
- Savings account: A financial product primarily used to accumulate money and house an emergency fund while typically earning a modest interest amount.
- Checking account: A transaction account that allows for deposits and withdrawals and used for paying bills and making purchases.
- Credit cards: A bank-issued card that allows one to make purchases but differs from a debit card in that it offers a revolving line of credit.
- Investment opportunities like CDs: A savings account that holds a fixed amount of funds for a set time period and comes with an interest rate that’s typically higher than that of a traditional savings account.
What’s the difference between commercial and retail banking?
While commercial and retail banks offer similar services, they’re distinguished by the terms they provide and their clients. Commercial banking clientele typically receives differing interest rates compared to an everyday consumer. And while commercial banks serve both consumers and businesses, retail banks exclusively serve individuals. Additionally, though many financial institutions offer both retail and commercial banking, these operating teams are typically separate.