Differentiating Financial Institutions: Commercial, Investment, and Online Banking
Classified in Economy
Written on in 
English with a size of 2.33 KB
Understanding the Different Types of Banks
Executive Summary
When you think of a bank, the first thing that comes to mind might be the place that holds your checking or savings account. However, there are several different types of banks, all serving different needs. While many of these banks may not be widely known, each plays a very important role in daily financial operations. The banking system, for instance, is a group or network of institutions responsible for operating payment systems, managing loans and deposits, and facilitating investments.
Introduction
This report will look at the following types of financial institutions:
- Commercial Banks
- Credit Unions
- Investment Banks
- Online Banks
- Offshore Banks
Findings: Detailed Bank Types
Commercial Banks
At a Commercial Bank, you can open a checking or savings account, apply for a car or home loan, transfer money, or pay bills. A commercial bank is a financial institution that accepts deposits, offers checking account services, makes various loans, and manages savings accounts.
Credit Unions
Credit Unions are similar to banks, but they are not-for-profit organizations owned by their members. These credit institutions are created, owned, and operated by their participants.
Investment Banks
Investment banks help businesses work within financial markets. If a business wants to go public or sell debt to investors, they will often utilize an investment bank.
Online Banks
Online banking allows users to conduct financial transactions via the internet. Online banks offer customers services typically found at a physical branch, including deposits, transfers, and online bill payments.
Offshore Banks
Offshore banking refers to a location outside of one's national boundaries. This structure often takes advantage of more favorable conditions in a foreign country, such as lower wage requirements or looser regulations, which can result in significant cost savings for the business.
Conclusion
All types of banks are necessary, although some types are utilized more frequently than others. In addition, the role of online banks is having an increasing impact on the financial landscape.