Looking to open a new checking account? Need help investing? There’s a bank for that. Read on to learn more about five common bank types and find one that will work for your needs.
What are they? Also known as consumer banks, retail banks are probably what comes to mind when you think of a typical bank. They offer their services to the general public, which include bank accounts, loans, credit cards, debit cards, ATMs, and wire transfers. Retail banks have brick and mortar locations as well as online services.
Good for: Personal banking
Examples: PNC, Chase, Citibank
What are they? Credit Unions function similarly to a retail or commercial bank, but they are not-for-profit institutions, meaning they are managed by members or customers. Credit Unions serve people affiliated with certain groups, whether that’s people living in a specific region, military veterans, etc. While they offer similar services to a retail bank, the fees tend to be much lower.
Good for: Lower-income personal or business banking
Examples: Teachers Federal Credit Union, Navy Federal Credit Union
What are they? Online banks are banks without a physical location. They offer similar services to retail banks (bank accounts, credit cards, debit cards, and loans) and typically have lower fees.
Good for: Convenient personal banking
Examples: Ally Bank, Charles Schwab
What are they? Commercial or corporate banks are tailored to business clients, both small and large. These banks offer additional financial services, like cash management, commercial real estate, and trade finance.
Good for: Business banking
Examples: Bank of America, Wells Fargo (these banks often also act as retail banks)
What are they? Investment banks help manage the trade of stocks, securities and bonds between companies and investors. They also act as advisors and financial intermediaries, playing a role in mergers and acquisitions. They also manage investment portfolios for business and individuals.
Good for: Publicly traded companies and individual investors
Examples: Morgan Stanley, Goldman Sachs