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Get your knowledge up: Learn about different types of banks

Get your knowledge up: Learn about different types of banks
By Karan Kapoor


The first image of a bank that comes in everyone’s mind is where we put our hard-earned money as deposits, and from where we can take loans, and credit for our financial needs. But there are various other distinct types of banks, each with distinct features. 
There is a chance that you might have heard about some of these, and some might feel alien. 
These different banks are made for the special needs of the people, but all these should be known to every person, so they get to choose what is best for them. 
There are a lot of banks that are in multiple fields in order to gain more profit and account holders, you might see some names popping more commonly because they have varied their services. 
Retail bank 
Most of the people are familiar with it. Your savings accounts and checking are the basic functions of a retail bank, with the main focus on the general public as customers. 
These are the banks, found in abundance in your location. They also offer loans and credit facilities to the general masses. 
Here are some examples: Bank of China, JP Morgan Chase, Bank of America and Wells Fargo
Commercial Banks 
This is the bank, primarily focusing on the business customer. Businesses need basic facilities, like checking, but they also need some complex services. Services like overdraft, various extra lines of credit to control the cash flow, and foreign exchange services, to spread the business. These focus on how to help small or large businesses. 
Investment Banks 
These are the banks that allow businesses to raise capital through financial markets. They help any business to go public or help them to invest in the financial markets. These are the type of banks that advise corporations mergers and business acquisitions. 
Goldman Sachs, Morgan Stanley and Credit Suisse, BofA Merrill Lynch are some top listers in the Investment banking world.
Private Banks 
They focus exclusively on potentially wealthy and richer clients. The customers are usually with a net worth of $1 Million. Their major service is to help their customers in managing their wealth, provision of tax advice, and formation of trusts for tax exemption if leaving money for their next of kin. 
UBS, Merrill LynchCitibank, Wells Fargo private are some private bank options in the world. 
Central Banks 
These are the monetary policymakers of an economy. They help in advising the government to make policies, regulate other banks in a country and also aid the government in loans, and financial aid. They also help in controlling inflation. 
The Federal Reserve is the Central Bank of the USA. Bank Negara Malaysia regulates Malaysia's economy. European Central Bank controls the European Union’s economy. Bank of Japan, controls Japan. 
Credit Unions 
These are not-for-profit financial organizations owned by their clients. Their services are identical to that of retail banks. Their main aspect is that it is member exclusive, a person has to be eligible for the norms of the credit union, to open an account here. 
For more difference between Credit Union and Retail Banks, click here
Online Banks 
These banks have no physical location and, as their name suggests they work only on an online platform. They have no teller, no personal banker, simply no physical touch of banking. Many other banks also have online banking, but online-only banks are different, in the way they offer a more competitive range of savings accounts and free checking facilities. 
Ally Bank, Discover Bank, Schwab Bank and, nbkc Bank are few of the top listers in the list of Online-banks. 
Mutual Banks
These are very similar to Credit Unions, they also provide similar services, but the rules are more rigid here. The Mutual Banks are member-only banks, within a single community, or people of similar interests. 
Savings and Loans 
These banks are at a decline as similar services are provided by other types of banks, yet they have been an integral part of the economy. They try to help homeownership mainstream, using savings deposits to subsidize home credits.

These are various types of banks in this world, but the question is to which one is the best for you. You have to select yourself, which bank is suitable for you and fulfil your needs.