Types of Banks

It is impossible for one bank to provide all the resources necessary to meet the various diverse needs and complexities of the banking world. Therefore, there are many different types of banks throughout the world that specialize in certain functions and on meeting the needs of various customers.

Banks can be categorized according to the services they provide and the type of customers they serve.

Commercial Banks

Commercial banks act as an intermediary between depositors and borrowers. Commercial banks raise funds from depositors and lend those same funds to borrowers.

Commercial banks also provide financial services to businesses including bank accounts, credit and debit cards, deposits and loans and secured and unsecured loans.

Commercial banks also compete with investment banks in money market operations, bond underwriting and offer financial advice.

Examples of Commercial Banks

Retail Banks

Retail banks are the ones that we are more familiar with. These banks are the ones you visit for your day to day banking needs. They are located downtown and provide basic banking services to individual customers. You can rent a safety deposit box, open checking and savings accounts, apply for a mortgage, or request a bank loan to purchase a car perhaps.

Examples of Commercial Banks

Investment Banks

Investment banks are primarily engaged in the financial markets. They are financial institutions that help individuals, companies or governments raise capital by underwriting or acting as an agent in the issuance of securities. They may offer financial advice to companies involved in mergers and acquisitions as well as other financial services such as foreign exchange, commodities and equity securities.

Examples of Investment Banks

Cooperative Banks

Cooperative banks provide cheap credit to their members and are governed by the provisions of State Cooperative Societies Act. A cooperative bank holds deposits, makes loans and provides other financial services to cooperatives and member-owned organizations.


Credit Unions

Credit Unions are a viable alternative to regular banks. A credit union operates as a member owned financial cooperative offering competitive interest rates to its members. Most offer similar financial services as the regular banks and you can choose to bank online, in branch, or by telephone using your member card. Credit Unions are more community based and their objective is to serve their members rather than being driven by profits. Bank cards can be used at any credit union ATM across the country without additional charges.

Top Ten Credit Unions
Top Ten Credit Unions
Vancity Navy Federal Credit Union
Coast Capital Savings State Employees Credit Union
Servus Credit Union Pentagon Federal Credit Union
Meridian Credit Union Boeing Employees Credit Union
First West Credit Union SchoolsFirst Federal Credit Union
Conexus Credit Union The Golden 1 Credit Union
Steinbach Credit Union Alliant Credit Union
Assiniboine Credit Union Security Service Federal Credit Union
Cambrian Credit Union Star One Credit Union
First Calgary Financial First Technology Federal Credit Union

Specialized Banks

Specialized banks offer financial aid to industries, foreign trade, and large turnkey projects that require specialized needs. Some examples of specialized banks include industrial banks, import-export banks, agricultural banks, real estate banks and foreign exchange banks.

Internet Only Banks or Direct Banks

Internet only banks or direct banks are a good alternative to bricks and mortar banks as their low overhead allows them to offer higher interest rates and lower, or no banking fees which make them an attractive option. You still need to do your research though, to make sure you are dealing with a reputable company. Below are a few internet only banks that you might consider.


Central Banks

Central banks play an important role in the economy of the country. They are the banks that regulate and supervise the banking industry. Central Banks are responsible for setting official interest rates, implementing monetary policy and providing banking services to the government and other banks.

Piggy Bank

Piggy banks have been around for generations as a tool to teach kids about the importance of saving money. Piggy banks make great gifts and heirlooms and are often given as christening or birthday gifts.

Online Banking Resources:

Advantages of Internet Banking

Online Banking Security