Retail Banking Categories Retail banking refers to the type of bank activity that deals directly with consumers instead of corporations or other banking institutions. The services offered by the various types of retail banks may include savings, checking, mortgages, personal loans, debit cards, and credit cards.

A Commercial Bank may either fall into any of its two definitions:

  • a type of bank that is not an investment bank.
  • a bank or a bank division that generally does business regarding deposits and loans from conglomerates or large businesses. This is the department of banking that is regarded as the most successful. The Community Bank is one that is locally operated as a financial institution that allows employees to decide on matters regarding the services they offer to customers and to their partners.

A Community Development Bank is a controlled bank that offers financial services and credit to citizens who are ‘financially under-served’. The purpose of this type of retail bank is to produce economic advancements, especially in locations with low-to-moderate income. Shorebank, with headquarters based in the Chicago neighborhood, is the largest and oldest community development bank.

A Postal Savings Bank is essentially a bank in a post office. This system of banking was initially implemented in postal offices to make available a method of saving money to depositors without access to banks. This also encourages poor people to save. Great Britain was the first country to offer this setup in the year 1861.

Private Bank

A Private Bank primarily services individuals with a net worth of more than 2 million dollars in managing their assets. This has somehow changed, however, since some private banks are now open to private investors with a lower net worth of $250,000. In essence, this type of retail banking renders to clients a more personal service with regard to wealth management, savings, inheritance, and tax planning.

An Offshore Bank is a bank situated outside the country where the depositor resides, usually in areas having low taxation and not-so-strict regulations. The majority of Offshore Banks operate as Private Banks. An Offshore Bank provides numerous financial and legal advantages which include greater privacy, less (or possibly none at all) tax, ease of access to deposits, and the defense against local political or financial insecurity.

Savings Bank

A Savings Bank primarily serves clients who wish to open a savings account but may also perform other functions. This type of financial institution holds its roots in Europe during the 18th – 19th century.

A Building society is also a form of retail banking, owned by its members to whom it offers banking services such as mortgage lending. The first Building society was founded in Birmingham during the year 1774. Landesbanken refers to the group of state-owned banks in Germany.

An Ethical Bank concerns itself with the social and environmental effects of investments and loans. Its priority is a transparent operation and only engages in investments that are regarded as socially-responsible.

The Islamic Bank is a financial institution whose activities conform with the Sharia (the Islamic Law and its application to improve the Islamic economy.