Banks have existed in our societies for a long time and they safeguard money and provide loans, credit and payment services to its customers. They may also offer products of investment and insurance. These functions can be used to make distinctions of the different types of banks available.

Commercial banks receive deposits which are repayable in demand, from individual co-operations and firms in any industry. They invest this deposits in short term loans that for commercial business to enable the bank keep its assets in liquid. It handles basic banking requirements such as basic accounts, lending money for capital and real purchases as well as foreign exchange among other transactions.

Investment banks on the other hand give help to investors to enable them access investment markets. It helps companies acquire funds and offer a wide range of information and advice on the transactions that can be carried out by the company.

Central Banks act as a country’s monetary and financial supplier as it has a stable monetary and financial policy that help make the economy progress. They also supervise other banks and various financial institutions to deter them from acting irresponsibly. Their functions vary from country to country and are mostly owned by the state thus making their policies subject to interference from it.

On line banks are banks that are exclusively on line. They offer great flexibility and a wide range of choice by providing competitive rates since they do not have overheads and expenses associated with other types of banks. They carry out all the necessary banking transactions and payment services.

Though most of these banks exist separately, the line of distinction has been blurred over the years as many banking institutions, apart from the Central Bank, are now free to take on more sectors and engage in different kinds of activities thus you may find an investment bank offering both investment and commercial services.

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