Real Estate News, Reviews and Investment
Article: types of lenders, their roles and services, and your loan options.
All banks receive and store money for their clients and lend it to other people for a fee. However the size and range of services offered varies enormously, and includes commercial and investment banks as well as central and private banks.
While the two primary types of banks are commercial banks (where you have your current or checking account) and investment banks (which focus solely on longer term investment portfolios), there are also government-run central banks as well the highly specialised services of private banks for the ultra wealthy.
Commercial or retail banks
These are the banks which have branches in primary business centres and retail streets and which offer everyday services including current accounts, savings accounts and credit or debit cards.
Commercial banks will usually:
Services offered by commercial banks
While different commercial banks offer a diverse range of services, these will usually include some or all of the following:
Unlike commercial banks, investment banks don’t provide the typical, everyday services. Their focus is on higher-level services for individuals, companies and governments and transactions will usually involve a sizable amount of money.
Investment banks will usually:
Services offered by investment banks
Many investment banks specialize but their services may include:
Other types of banks
While commercial and investment banks are the most common, there are other types of banks and many other financial institutions including credit unions, mortgage brokers and cooperative societies.
Run or backed by the government, a country’s central bank will have a wide range of responsibilities but will not deal directly with private or business accounts. A central bank may:
Private banks manage the money of high-worth individuals, millionaires or billionaires. They typically provide a high level of personalized service and may manage all aspects of a client’s finances, including both personal and investment banking, as well as property investments and other financial assets. As they deal with wealthy individuals, privacy and excellent service are usually considered critically important and many private banks are selective about their clientele.