BANK: Types

EIGHT TYPES OF BANKS – PLUS 1

A general understanding of these bank types is suggested for any medical professional prior to launching a self-directed [ME, Inc] medical practice, clinic, guided investment strategy, personal financial plan or wealth building portfolio effort; etc.

Definition of Retail Bank

A retail bank is a typical small mass-market financial institution in which individual customers use local branches; usually of larger commercial banks. Services include savings and checking accounts, mortgages, personal loans, debit/credit cards and certificates of deposit (CDs).

Definition of Commercial Bank

A commercial bank is financial institution that provides services, such as accepting deposits, giving business loans and auto loans, mortgage lending, and basic investment products like savings accounts and certificates of deposit. The traditional commercial bank is a brick and mortar institution with tellers, safe deposit boxes, vaults and ATM, etc.

However, some commercial banks do not have any physical branches and require consumers to complete all transactions by phone or Internet. In exchange, they generally pay higher interest rates on investments and deposits, and charge lower fees.

Definition of Investment Bank

Investment banking activities are different than those of retail and commercial banks. They include underwriting securities, acting as an intermediary between an issuer of securities and the investing public, facilitating mergers, acquisitions and other corporate reorganizations. They may also acting as a broker for institutional clients.

Definition of Central Bank

A central bank is a financial institution given privileged control over the production and distribution of money and credit for a nation or a group of nations. In modern economies, the central bank is usually responsible for the formulation of monetary policy and the regulation of member banks.

Central banks are inherently non-market-based or even anti-competitive institutions. Although some are nationalized, many central banks are not government agencies, and so are often touted as being politically independent. However, even if a central bank is not legally owned by the government, its privileges are established and protected by law.

Definition of Credit Union

A credit union is a type of financial cooperative that provides traditional banking services. Ranging in size from small, volunteer-only operations to large entities with thousands of participants spanning the country, credit unions can be formed by large corporations, organizations, and other entities for their employees and members. Credit unions are created, owned, and operated by their members. As such, they are not-for-profit enterprises that are accorded tax-exempt status.

Definition of Online Bank

An online bank is a financial institution that lets you fully manage your deposit accounts via a website, mobile device or app. Most banking services can usually be handled online — including transferring funds and depositing checks. You may choose an online bank to get a better interest rate and reduce your account fees. Oftentimes, these banks have fewer overhead costs, which allows them to give back some of these savings to their customers in the form of higher annual percentage yield [APYs[ and lower fees.

Some online banks even partner with brick-and-mortar financial institutions or offer ATM deposit access if you prefer to make transfers in person. However, some online banks offer limited account options and services. That means you may have to choose another bank to open a separate account or manage your money altogether.

Definition of Mutual Bank

A mutual bank is a bank that is owned by its customers, who are also referred to as members. Mutual banks offer the same types of products and services as traditional retail banks, such as transaction accounts, savings accounts, home loans and credit cards. They are typically community-focused.

Mutual banks are also known as customer-owned banks. Unlike traditional banks where profits are paid to shareholders, customer-owned bank profits are used to benefit customers. This may be seen through better rates and fees – socially responsible lending and customer service – according to the Customer-Owned Banking Association which represents the sector. Mutual banks may also include credit unions and building societies.

Definition of Savings and Loan Association

A savings and loan association (S&L) is a financial institution typically owned and overseen by its customers or shareholders. Because of this “pool” structure, savings and loan associations are able to offer mortgages and other types of financial products to customers who might otherwise not have access to them. They are often locally based, and by law required to dedicate the majority of their lending to financing residential properties. Savings and loan associations are also known as savings associations, savings banks, thrifts or thrift institutions.

PLUS ONE: An investment bank is an intermediary in complex financial transactions usually when a healthcare startup company prepares for its launch of an initial public offering (IPO) or when a hospital, clinic, ambulatory center or medical corporation merges with a competitor.

MORE: investment-banking

D. E. Marcinko & Associates understands the personal and business decision that involves weighing many different banking types. When looking at banking options, consider important factors like location, preference for in-person or online banking, interest rates, fees and the variety of services available.

And, for physicians who need more complex investment banking solutions like Partner Buy-In, Refinancing / Debt Consolidation, Mergers and Acquisitions, Expansion / Relocation, Equipment, Venture Capital and Commercial Real Estate Financing etc; we can assist.

HOW MAY WE SERVE YOU?

Contact: MarcinkoAdvisors@outlook.com

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