What is a Retail Bank? Products and Services Offered

A retail bank is a bank that works with consumers, offering basic banking services like checking accounts, savings accounts, loans, and more.

Retail Banking Services

Retail banks also known as consumer banking handle financial needs for everyday spending as well as life events like buying a home. Local community banks and credit unions offer many of the same services as the big banks. Online-only banks are also an option, especially for keeping fees to a minimum.

This allows customers to withdraw, deposit money, and speak directly with a banker about loan products or other needs. In addition, retail banking services are provided at ATMs, as well as through mobile and online banking platforms.

Below are some services listed below:

• Checking accounts: Many retail banks have several types of checking accounts, ranging from basic checking to interest-bearing checking accounts designed for customers with high balances
• Savings accounts: like checking accounts, savings accounts come in several varieties, they pay slightly more, with a few restrictions on how often you can spend the money
• Debit/ATM cards
• Credit cards
• Money orders/certified checks
• Wire transfers
• Mortgages (purchase and refinancing) and home equity loans
• Auto loans
• Personal loans
• Certificate of deposit (CD): Pay more than savings accounts, but usually requires you to leave your money untouched for at least several months to avoid early withdrawal penalties.
• Safe deposit boxes: Allows you to keep small valuables safe within the bank’s walls
• Banking products designed specifically for college students

Cost of Banking

Banks exist to make a profit, and credit unions also need to bring in revenue to stay in business. The most basic way banks earn money is to make loans with customer deposits and charge a higher interest rate on those loans.

For example, banks earn overdraft fees when you spend more money than you have available, and they charge fees to print cashier’s checks or send wire transfers for customers.

Other Types of Banks

In addition to retail banking, there are other major types of banking. This can be confusing because some banks work in several markets: they are retail banks, and commercial banks, and investment banks.

• Investment banking: Investment banks provide services to corporations, governments, and individuals. These services include raising financial capital by underwriting debt or equity issuance’s, and assisting in mergers and acquisitions.
• Commercial banking: Commercial banking refers to financial services provided to the corporate or institutional world. Many of the products offered by commercial banks are similar to those offered by retail banks, such as savings and checking accounts, but commercial banks may also offer things like foreign trade services, treasury management services, merchant services like credit card processing and gift cards, and more.
• Private banking: Similar to retail banking, private banking refers to banking and financial services provided to high-net-worth individuals. Private bankers provide financial and wealth management services on a much more personal level than traditional retail banks, which is why it can be considered a separate type of banking.

Author’s Verdict

Overall, retail banks are meant to help consumers with all their financial needs. In general retail banks can prove beneficial just be sure to understand your own financial needs in order to choose the right bank and account for you!

Also be sure to check out our own lists of bank promotions and CD tables!