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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 ''Öffentlic ...
, rather than to companies, corporations or other banks, which are often described as wholesale 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 I ...
and transactional accounts,
mortgages A mortgage loan or simply mortgage (), in civil law jurisdicions 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 ...
, personal loans, debit cards, and
credit card A credit card is a payment card issued to users (cardholders) to enable the cardholder to pay a merchant for goods and services based on the cardholder's accrued debt (i.e., promise to the card issuer to pay them for the amounts plus the ...
s. Retail banking is also distinguished from investment banking or
commercial banking A commercial bank is a financial institution which accepts deposits from the public and gives loans for the purposes of consumption and investment to make profit. It can also refer to a bank, or a division of a large bank, which deals with c ...
. 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 which accepts deposits from the public and gives loans for the purposes of consumption and investment to make profit. It can also refer to a bank, or a division of a large bank, which deals with ...
is used for a ''normal'' bank to distinguish it from an
investment bank Investment is the dedication of money to purchase of an asset to attain an increase in value over a period of time. Investment requires a sacrifice of some present asset, such as time, money, or effort. In finance, the purpose of investing i ...
. After the
Great Depression The Great Depression (19291939) was an economic shock that impacted most countries across the world. It was a period of economic depression that became evident after a major fall in stock prices in the United States. The economic contagio ...
, the Glass–Steagall Act restricted normal banks to banking activities, and investment banks to capital market 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 accounts ** Checking accounts (
American English American English, sometimes called United States English or U.S. English, is the set of varieties of the English language native to the United States. English is the most widely spoken language in the United States and in most circumstances ...
) ** Current accounts (
British English British English (BrE, en-GB, or BE) is, according to Oxford Dictionaries, "English as used in Great Britain, as distinct from that used elsewhere". More narrowly, it can refer specifically to the English language in England, or, more broadl ...
) * Savings accounts * Debit cards * ATM cards *
Credit card A credit card is a payment card issued to users (cardholders) to enable the cardholder to pay a merchant for goods and services based on the cardholder's accrued debt (i.e., promise to the card issuer to pay them for the amounts plus the ...
s * Traveler's cheques *
Mortgage A mortgage loan or simply mortgage (), in civil law jurisdicions 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 ...
s * Home equity loans * Personal loans * Certificates of deposit/ Term deposits 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 at ...
s * Money market accounts * Individual Retirement Accounts (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 banks manage the assets of
high-net-worth individual High-net-worth individual (HNWI) is a term used by some segments of the financial services industry to designate persons whose investible wealth (assets such as stocks and bonds) exceeds a given amount. Typically, these individuals are defi ...
s. * Offshore banks are banks located in jurisdictions with low taxation and regulation. Many offshore banks are essentially private banks. * Savings banks accept
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 I ...
deposits. * Postal savings banks are savings banks associated with national postal systems.


See also

* Banking institution *
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 ...


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