Aside from the banks that serve the public, there are commercial banks with about four different types of banks under that category. They are national and state chartered banks, trust companies, stock savings banks, and industrial banks. There are a number of other types of banks that are still considered banking institutions even though their services and clientele differ markedly.
There are mutual savings banks, savings and loan associations, mortgage companies, finance companies, insurance companies, credit agencies, credit unions, securities brokers and dealers, and investment bankers. There are also international banks, which don’t interest us here.
The commercial banks obviously tend to deal with corporations as well as small businesses. They offer a wide range of services similar to personal banking services but on a larger scale. Loans for businesses are a big part of all commercial banking.
Although many of the types of banks listed above used to be quite specialized, there is a tendency, with mergers and acquisitions, for these institutions to offer many more services and products under the same umbrella. For example, when we bought our new car, we didn’t get a loan from a bank but from a financial institution owned by the car company itself.
The tendency seems to be away from specialization and more toward expansion of products and services under one roof, or at least under one company. The smart shopper will do their homework and not necessarily take care of all of their banking needs under one bank or type of bank. If you want a savings account, find the one that pays the best interest, possibly online. If you want a checking account, look for an account that is free and pays interest on balances over a certain amount or pays interest on any amount. Want to make a loan? Compare many different companies for the best rates. Looking for a CD? There are sites that allow you to compare the rates at many different banks, both online and off.
Don’t feel that you have to be loyal to your bank or credit union. Shop around for the best products and services and look for the best returns on your hard-earned money.