Retail banking, also known as consumer banking or personal banking, is the provision of services by a

bank A bank is a financial institution that accepts Deposit account, deposits from the public and creates a demand deposit while simultaneously making loans. Lending activities can be directly performed by the bank or indirectly through capital m ...

to the

general public In public relations and communication science, publics are groups of individual people, and the public (a.k.a. the general public) is the totality of such groupings. This is a different concept to the sociological concept of the ''Öffentlichkei ...

, rather than to companies, corporations or other banks, which are often described as

wholesale banking Wholesale banking is the provision of services by banks to larger customers or organizations such as mortgage brokers, large corporate clients, mid-sized companies, real estate developers and investors, international trade finance businesses, ...

(corporate banking). Banking services which are regarded as retail include provision of

savings Wealth is the abundance of valuable financial assets or physical possessions which can be converted into a form that can be used for transactions. This includes the core meaning as held in the originating Old English word , which is from an ...

and

transactional account A transaction account (also called a checking account, cheque account, chequing account, current account, demand deposit account, or share account at credit unions) is a deposit account or bank account held at a bank or other financial instituti ...

mortgages A mortgage loan or simply mortgage (), in civil law jurisdictions known also as a hypothec loan, is a loan used either by purchasers of real property to raise funds to buy real estate, or by existing property owners to raise funds for any pur ...

personal loan In finance, unsecured debt refers to any type of debt or general obligation that is not protected by a guarantor, or collateralized by a lien on specific assets of the borrower in the case of a bankruptcy or liquidation or failure to meet the te ...

debit card A debit card, also known as a check card or bank card, is a payment card that can be used in place of cash to make purchases. The card usually consists of the bank's name, a card number, the cardholder's name, and an expiration date, on either ...

s, and credit cards. Retail banking is also distinguished from

investment banking Investment banking is an advisory-based financial service for institutional investors, corporations, governments, and similar clients. Traditionally associated with corporate finance, such a bank might assist in raising financial capital by und ...

or commercial banking. It may also refer to a division or department of a bank which deals with individual customers. In the U.S., the term ''

commercial bank A commercial bank is a financial institution that accepts deposits from the public and gives loans for the purposes of consumption and investment to make a profit. It can also refer to a bank or a division of a larger bank that deals with whol ...

'' is used for a ''normal'' bank to distinguish it from an

investment bank Investment is traditionally defined as the "commitment of resources into something expected to gain value over time". If an investment involves money, then it can be defined as a "commitment of money to receive more money later". From a broade ...

. After the

Great Depression The Great Depression was a severe global economic downturn from 1929 to 1939. The period was characterized by high rates of unemployment and poverty, drastic reductions in industrial production and international trade, and widespread bank and ...

, the Glass–Steagall Act restricted normal banks to banking activities, and investment banks to

capital market A capital market is a financial market in which long-term debt (over a year) or equity-backed securities are bought and sold, in contrast to a money market where short-term debt is bought and sold. Capital markets channel the wealth of savers ...

activities. That distinction was repealed in the 1990s. Commercial bank can also refer to a bank or a division of a bank that deals mostly with deposits and loans from corporations or large businesses, as opposed to individual members of the public (retail banking).

Products

Typical banking services offered by retail banks include: *

Transactional account A transaction account (also called a checking account, cheque account, chequing account, current account, demand deposit account, or share account at credit unions) is a deposit account or bank account held at a bank or other financial instituti ...

s **

Checking account A transaction account (also called a checking account, cheque account, chequing account, current account, demand deposit account, or share account at credit unions) is a deposit account or bank account held at a bank or other financial instituti ...

s (

American English American English, sometimes called United States English or U.S. English, is the set of variety (linguistics), varieties of the English language native to the United States. English is the Languages of the United States, most widely spoken lang ...

) ** Current accounts (

British English British English is the set of Variety (linguistics), varieties of the English language native to the United Kingdom, especially Great Britain. More narrowly, it can refer specifically to the English language in England, or, more broadly, to ...

) *

Savings account A savings account is a bank account at a retail banking, retail bank. Common features include a limited number of withdrawals, a lack of cheque and linked debit card facilities, limited transfer options and the inability to be overdrawn. Traditi ...

s *

Debit card A debit card, also known as a check card or bank card, is a payment card that can be used in place of cash to make purchases. The card usually consists of the bank's name, a card number, the cardholder's name, and an expiration date, on either ...

s *

ATM card An ATM card is a dedicated payment card card issued by a financial institution (i.e. a bank) which enables a customer to access their financial accounts via its and others' automated teller machines (ATMs) and, in some countries, to make approve ...

s * Credit cards *

Traveler's cheque A traveller's cheque is a medium of exchange that can be used in place of the currency of a country. Each cheque is denominated in a preprinted fixed, round, amount of one of a number of major world currencies; it has two panels for a signat ...

s *

Mortgage A mortgage loan or simply mortgage (), in civil law (legal system), civil law jurisdictions known also as a hypothec loan, is a loan used either by purchasers of real property to raise funds to buy real estate, or by existing property owners t ...

s *

Home equity loan A home equity loan is a type of loan in which the borrowers use the equity of their home as collateral. The loan amount is determined by the value of the property, and the value of the property is determined by an appraiser from the lending in ...

s *

Personal loan In finance, unsecured debt refers to any type of debt or general obligation that is not protected by a guarantor, or collateralized by a lien on specific assets of the borrower in the case of a bankruptcy or liquidation or failure to meet the te ...

s *

Certificates of deposit A certificate of deposit (CD) is a time deposit sold by banks, thrift institutions, and credit unions in the United States. CDs typically differ from savings accounts because the CD has a specific, fixed term before money can be withdrawn with ...

Term deposit A time deposit or term deposit (also known as a certificate of deposit in the United States, and as a guaranteed investment certificate in Canada) is a deposit in a financial institution with a specific maturity date or a period to maturity, co ...

s In some countries, such as the U.S., retail bank services also include more specialised accounts, such as: *

Sweep account A sweep account is an account set up at a bank or other financial institution where the funds are automatically managed between a primary cash account and secondary investment accounts. Function A sweep account combines two or more accounts ...

s *

Money market account A money market account (MMA) or money market deposit account (MMDA) is a deposit account that pays interest based on current interest rates in the money markets. The interest rates paid are generally higher than those of savings accounts and tra ...

s *

Individual Retirement Account An individual retirement account (IRA) in the United States is a form of pension provided by many financial institutions that provides tax advantages for retirement savings. It is a trust that holds investment assets purchased with a taxpayer's ...

s (IRA's)

Sub-types of retail banks

* Community development bank are regulated banks that provide financial services and credit to underserved markets or populations. *

Private bank Private banks are banks owned by either the individual or a general partner(s) with limited partner(s). Private banks are not incorporated. In any such case, creditors can look to both the "entirety of the bank's assets" as well as the entire ...

s manage the assets of

high-net-worth individual In the financial services industry, a high-net-worth individual (HNWI) is a person who maintains liquid assets at or above a certain threshold. Typically the criterion is that the person's financial assets (excluding their primary residence) are ...

s. *

Offshore bank An offshore bank is a bank that is operated and regulated under international banking license (often called offshore license), which usually prohibits the bank from establishing any business activities in the jurisdiction of establishment. Due to ...

s are banks located in jurisdictions with low taxation and regulation. Many offshore banks are essentially private banks. *

Savings bank A savings bank is a financial institution that is not run on a profit-maximizing basis, and whose original or primary purpose is collecting deposits on savings accounts that are invested on a low-risk basis and receive interest. Savings banks ha ...

s accept

deposits. * Postal savings banks are savings banks associated with national postal systems.

References

* Tiwari, Rajnish and Buse, Stephan (2006)
The German Banking Sector: Competition, Consolidation and Contentment
Hamburg University of Technology (TU Hamburg-Harburg) * Brunner, A., Decressin, J. / Hardy, D. / Kudela, B. (2004): Germanys Three-Pillar Banking System – Cross-Country Perspectives in Europe, Occasional Paper, International Monetary Fund, Washington DC 2004. {{DEFAULTSORT:Retail Banking Banking Scottish inventions Service retailing

Products

Sub-types of retail banks

See also

References