Types of Banking

Commercial banking refers to the processing of checks as well as other types of transactions involving cash deposits and transfers. Different kinds of business banking services available include: loans. Business loans are an ordinary banking service generally offered, and they come in various shapes and sizes. Some common types of commercial loans that most banks offer include:

Personal loans. Personal loans are mainly sought by people who need money to invest for their own personal use. Many banks provide such loans, but there are some private banks that only provide specific kinds of personal loans, such as mortgages, car loans, etc. In any case, if you need to obtain a personal loan, you should do your research before deciding on the bank to get it from.

Business bank accounts. Business bank accounts are usually for larger businesses, and not for individuals. Such services may include banking services such as the handling of finances, managing accounts payable and receivable, and so on.

Debit and credit cards. A debit card is a pre-paid card that can be used like a regular card, but is not associated with any particular bank account. A credit card is a plastic or electronic card that is used like a credit card but is usually associated with a specific credit company. The main advantage of a debit card over a credit card is that it is impossible to go overdrawn. Some banks provide both debit and credit services, but others only offer one or the other.

Central bank. There are two main parts to a financial institution. The first part is the board of directors, who decide which activities are undertaken by the institution, and which ones are financed through interest. The central bank is in charge of the overall supervision of the institution and decides what actions should be taken to keep it in control.

The second part consists of the staff of the institution, who manage the day to day activities. Banks employ people to perform all of the necessary tasks to conduct the institution in the manner in which it is meant to operate. These people include employees such as tellers, accountants, forex managers, reserve agents, bankers, marketing managers, risk managers, and security personnel. They perform a variety of different jobs, and they act as the eyes and ears of the central bank.

Commercial banks and investment banks. The purpose of commercial banks and investment banks is to lend money and provide other financial services to businesses, corporations, and individual consumers. The activities of commercial banks and investment banks include the lending of loans to individuals and businesses, the purchase of securities, and the underwriting of various transactions. These services are provided through trading activities, and the activities are carried out at various locations. There are sometimes separate offices and branches where these activities take place.

Savings banks. The main function of savings banks is to lend money to consumers, but it also offers a variety of other financial services to consumers. As far as the services offered by these banks are concerned, they usually focus on credit and debit card accounts, checking accounts, loans, and money market accounts. Many of these banks also specialize in the business sector, and they conduct specific types of transactions for small businesses. Finally, there are different types of banks which are completely international, and they deal with transactions that are conducted across various countries.

Credit unions. Credit unions are mutual, co-operative societies, and they make loans to its members rather than selling them products of other financial institutions. In most cases, a credit union member is allowed to use his or her own deposit to make loans to other members. However, different credit unions operate in different ways, and there is no central board that governs them.

Lending institutions. There are two kinds of financial institutions: those that lend money and those that lend their products (such as credit unions). A common characteristic of both kinds of institutions is that they make loans to people who apply and are approved for them. Lending institutions can be either public or private.

Loan associations. Unlike savings and credit unions, loan associations do not lend money. Instead, they distribute loans among their members. They have better borrowing power than the other financial institutions, and many people prefer to get loans from loan associations instead of from banks or savings and loans.