Retail banking is also referred to as customer banking. It is the supply of services by a bank to the common public, instead of companies, corporations or other Banks. These type of banking is also described as wholesale banking.
Banks which are considered as retail provides the services of savings, personal loans, debit cards and credit cards. Retail banking is totally different from investment banking and commercial banking. It may also be as a division or department of the bank which directly deals with the individual customers.
In the United States, the term commercial banking is used as a normal form to differentiate it with investment banking. After the great depression caused by the war, the Glass- Steagall act restricted those commercial banks to perform their banking activities. And the investment Banks were bounded to charming the capital market activities.
Commercial banks are also the bank or division of a bank that mostly deals with the deposits and loans from corporations and large businesses, as averse to the individual members of public (retail banking).
Retail banking services offered by banks include:
- Transactional accounts
- Savings accounts
- Debit cards
- ATM cards
- Credit cards
- Travellers cheques
- Home equity loans
- Personal loans
- Government-insured debit instrument/term deposits
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In certain countries, such as United States retail banking provides more specialized accounts like,
- Sweep accounts
- Money market accounts
- Individual retirement accounts (IRA’s)
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Sub details of retail banks:
- The community development bank is the balanced banks that provide financial services and credit to improvised markets or population
- The private bank controls the assets of high net worth individuals.
- An offshore bank is the banks discovered in jurisdictions with low taxation and pronouncement. Many offshore banks are you essentially private banks.
- Savings banks accept only the savings accounts.
- Postal saving banks are also the savings banks associated additionally with the national postal systems.