You want a bank that offers the retail banking products you need. Here are 15 of the most popular retail banking products today. Banks provide a wide range of services to individuals and businesses. Some of the most common services offered by banks retail banks include:
Savings Accounts
A savings account is a type of bank account that allows individuals to save money and earn interest on their deposits. Savings accounts are a safe and convenient way to save money, and they are typically offered by commercial banks and credit unions.
Unlike checking accounts, which are intended for everyday transactions, savings accounts are designed for long-term savings. As a result, they often have higher interest rates than checking accounts and may have restrictions on the number of transactions that can be made each month.
One of the key benefits of a savings account is that it allows individuals to earn interest on their deposits. The interest rate on a savings account is the amount the bank pays the account holder to keep their money in the report. Interest rates on savings accounts can vary depending on the bank and the type of account, but they are typically higher than the rates on checking accounts.
A savings account is valuable for saving money and earning interest on your deposits. By choosing the correct savings account and managing your money wisely, you can take control of your financial future and achieve your savings goals.
Recurring deposit account
A recurring deposit (RD) account is a type of savings account that allows individuals to save a fixed amount each month. Unlike a traditional savings account, where the amount deposited can vary, a recurring deposit account requires the account holder to deposit a fixed amount each month.
One of the key advantages of a recurring deposit account is that it allows individuals to save money regularly, even if they don’t have a large amount of money to deposit at once. By setting aside a fixed amount of money each month, individuals can build their savings over time and achieve their financial goals.
To open a recurring deposit account, individuals must typically make a minimum initial deposit and agree to make regular monthly deposits for a certain period, such as six months or one year. The terms and conditions of a recurring deposit account can vary depending on the bank, so it’s important to carefully review the terms and conditions before opening an account.
Overall, a recurring deposit account is a valuable savings tool for individuals who want to save money regularly and earn a higher interest rate on their deposits. Individuals can take control of their financial future and achieve their savings goals by committing to a regular savings plan.
Fixed deposit account
A fixed deposit (FD) account allows individuals to save money for a specific period and earn a higher interest rate on their deposits. Unlike a traditional savings account, where the amount deposited and the interest rate can vary, a fixed deposit account requires the account holder to deposit a fixed amount of money for a specific period, such as six months or one year.
One of the key advantages of a fixed deposit account is that it offers a higher interest rate than a traditional savings account. This is because the bank can rely on fixed deposits to fund its operations and offer a higher rate of return as a result. The interest rate on a fixed deposit account is typically higher than the rate on a savings account and may be higher than on other types of investments, such as stocks or bonds.
To open a fixed deposit account, individuals must typically make a minimum initial deposit and agree to keep the money in the budget for a certain period. The terms and conditions of a fixed deposit account can vary depending on the bank, so it’s important to carefully review the terms and conditions before opening an account.
Overall, a fixed deposit account is a valuable savings tool for individuals who want to save money for a specific period and earn a higher interest rate on their deposits. Individuals can take control of their financial future and achieve their savings goals by committing to a fixed savings plan.
Individual retirement account
An individual retirement account (IRA) is an investment account designed to help individuals save for retirement. IRAs are a popular way to save for retirement because they offer certain tax advantages. There are several different types of IRAs, including traditional and Roth IRAs. Traditional IRAs allow individuals to make contributions with pre-tax dollars, and the money in the account grows tax-deferred until it is withdrawn in retirement. On the other hand, Roth IRAs allow individuals to make contributions with after-tax dollars, and the money in the account grows tax-free. Withdrawals from a Roth IRA in retirement are tax-free if certain conditions are met.
Money market account
A money market account is a type of bank account that offers higher interest rates than a traditional savings account. Money market accounts are similar to savings because they are a safe and liquid place to store your money. However, money market accounts often have higher minimum balance requirements and may offer limited check-writing or debit card access.
The higher interest rates on money market accounts are possible because they typically require you to keep a higher balance and may also limit the number of transactions you can make each month. Money market accounts can be a good option for individuals looking to earn more interest on their savings while still having easy access to their funds.
Some money market accounts may also offer check-writing capabilities and debit card access, although these features may be subject to certain restrictions. Money market accounts are insured by the Federal Deposit Insurance Corporation (FDIC), so your funds are safe and secure.
Certificate of deposit
A certificate of deposit (CD) is a savings account that offers a fixed interest rate and a fixed maturity term. CDs are a low-risk savings option that allows individuals to earn a higher interest rate on their money than they would with a traditional savings account. CDs are typically issued by banks and other financial institutions.
When you open a CD, you agree to deposit a certain amount of money into the account for a set period, known as the term of the CD. The duration can range from a few months to several years, and the longer the term, the higher the interest rate is typical. At the end of the time, you can withdraw your money and the interest you have earned or renew the CD for another time. CDs are a good option for individuals looking for a safe and reliable way to make a higher interest rate on their savings.
One of the main advantages of a CD is that it offers a fixed interest rate, which means you will know exactly how much money you will earn from your savings. CDs are also a low-risk investment option because they are FDIC-insured, so your money is safe and secure.
Credit card
A credit card is a payment card that allows individuals to borrow money from a bank or other financial institution to make purchases or withdraw cash. Credit cards are a convenient and widely accepted payment method, and they can be used at millions of locations around the world. When you use a credit card to make a purchase, the money is borrowed from the bank or financial institution that issued the card.
You are then responsible for repaying the borrowed money and any interest and fees that may be charged. Credit cards typically have a credit limit, the maximum amount of money you can borrow at any given time. You can usually pay off your credit card balance in full each month, or you can make minimum payments and carry a balance from month to month, accruing interest. Credit cards can be a valuable financial tool, but it is essential to use them responsibly to avoid debt.
Debit card
A debit card is a type of payment card that is linked to your checking or savings account. When you use a debit card to make a purchase, the money is automatically withdrawn from your account. Debit cards are a convenient and widely accepted payment method, and they can be used at millions of locations around the world. Debit cards differ from credit cards because they do not allow you to borrow money from the bank.
Instead, you can only use a debit card to make purchases or withdraw cash if you have sufficient funds. Debit cards also typically do not offer the same rewards programs or other benefits as credit cards. However, using a debit card can help you avoid debt and make it easier to manage your spending and stick to a budget.
Some advantages of debit cards include convenience, security, and avoiding debt. Debit cards are a convenient way to pay for purchases because they are widely accepted and allow you to make purchases online or in person. Debit cards also offer added security because you are not required to carry large amounts of cash, and if your card is lost or stolen, you can usually have it replaced.
Mutual fund
A mutual fund is a type of investment that pools money from many investors and uses the money to buy a diversified portfolio of stocks, bonds, or other securities. Professional money managers manage mutual funds using the pooled money to purchase various assets according to the fund’s investment objective. This allows investors to benefit from money managers’ expertise and diversify their investments without having to buy and manage individual securities themselves.
Mutual funds can be a good option for individuals looking to invest in the stock market but do not have a lot of money to invest or do not want to manage their own investments. Mutual funds offer a convenient and relatively low-risk way to invest in a diversified portfolio.
Mortgage
A mortgage is a loan that individuals can use to purchase a home. When you take out a mortgage, you borrow a large sum from a bank or other financial institution and agree to repay the loan over a set period, typically 15 or 30 years. The money you borrow is used to buy the home, and the property serves as collateral for the loan.
This means that if you are unable to make your mortgage payments, the lender has the right to foreclose on the property and sell it to recover the money you borrowed. Mortgages typically have a fixed interest rate, which means the interest rate and monthly payments remain the same for the entire term of the loan. Mortgages can be a good option for individuals looking to buy a home but do not have the cash to pay for it upfront.
Some of the advantages of taking out a mortgage include the ability to buy a home, potential tax benefits, and the ability to build equity. One of the main advantages of a mortgage is that it allows individuals to buy a home without paying the total purchase price upfront.
Personal Loan
A personal loan is a type of loan that individuals can use to borrow money from a bank or other financial institution. Personal loans are unsecured, which means they are not backed by collateral such as a car or a home. Instead, personal loans are based on your creditworthiness and ability to repay the loan. When you take out a personal loan, you borrow a certain amount and agree to indemnify it over a set period, typically one to five years.
Personal loans may have a fixed or variable interest rate, and you are responsible for making monthly payments until the loan is paid in full. Personal loans can be used for various purposes, such as consolidating debt, making home improvements, or paying for a wedding or other significant expenses.
Some advantages of taking out a personal loan include borrowing a large sum of money, consolidating debt, and the potential for a lower interest rate. One of the main advantages of a personal loan is that it allows you to borrow a large sum of money that you may not have readily available.
Current Accounts
A current account is a type of bank account typically used for everyday financial transactions, such as depositing paychecks, paying bills, and making purchases. Existing accounts are also known as checking accounts or demand deposit accounts. Existing accounts differ from savings accounts because they typically do not offer the same high-interest rates.
However, current accounts offer more flexibility and convenience for managing daily financial transactions. Current accounts typically come with a debit card and check-writing capabilities and may also provide online and mobile banking services. Some current accounts may also offer additional features, such as overdraft protection or free access to a network of ATMs. Existing accounts are a standard retail banking product banks and other financial institutions offer.
Some advantages of using a current account include convenience, managing daily financial transactions, and access to additional financial services. Existing accounts are a convenient and widely accepted way to handle your day-to-day financial transactions, such as depositing paychecks, paying bills, and making purchases.
Business (or commercial/investment) banking
Business banking, also known as commercial banking or investment banking, provides financial services to businesses rather than individual consumers. Business banks offer a wide range of financial products and services designed to meet businesses’ specific needs.
Some examples of business banking products and services include business checking and savings accounts, loans, credit cards, and investment products. Business banks may also offer specialized services such as cash management, foreign exchange, and trade finance. Business banks typically work with businesses of all sizes, from small startups to large corporations. Business banking can be a valuable resource for businesses that need access to financial services and expertise to help them grow and succeed.
Business loan
A business loan is a type that businesses can use to borrow money from a bank or other financial institution. Business loans are typically used to finance the growth or expansion of a company, such as by purchasing new equipment or hiring additional employees. Business loans may be secured, which means they are backed by collateral such as real estate or equipment or unsecured, based on the business’s creditworthiness. Business loans may have a fixed or variable interest rate, and the terms of the loan may vary depending on the size and type of the company, as well as the purpose of the loan. Business loans can be a valuable source of funding for businesses that need capital to grow and succeed.
Capital raising is obtaining funding for a business by selling equity or debt securities or a combination of both. Equity capital raising involves selling company shares to investors, who become owners of the company and are entitled to a percentage of the company’s profits. On the other hand, debt capital raising involves borrowing money from investors and agreeing to pay interest and repay the principal at a future date.
Hybrid capital raising involves a combination of equity and debt, such as selling convertible bonds that can be converted into equity later. Capital raising is a common way for businesses to raise the funds they need to grow and expand. The type of capital raising most appropriate for a given company will depend on various factors, such as the size of the company, its stage of development, and financial needs and goals.
Some advantages of capital raising for a business include the ability to obtain funding for growth and expansion, the potential to increase the company’s visibility and credibility, and the ability to align the interests of the business and its investors. Capital raising allows a business to obtain the funds it needs to invest in new products, services, or markets, which can help the company to grow and succeed.
Risk management (foreign exchange (FX), interest rates)
Risk management identifies, analyzes, and responds to risks that may impact an organization’s ability to achieve its business objectives. Risk management is a critical part of the overall management of a business. It involves using various tools and strategies to minimize the impact of potential risks on the company.
Some examples of common risks that businesses may face include foreign exchange (FX) risk, interest rate risk, commodity price risk, and the risk of financial derivatives. Foreign exchange (FX) risk arises from fluctuations in currency exchange rates, which can affect the value of a company’s assets and liabilities. Interest rate risk arises from changes in interest rates, which can affect the cost of borrowing and the importance of investments.
Commodity price risk arises from changes in the price of commodities, such as oil or metals, which can affect the cost of raw materials or the value of a company’s inventory. Financial derivatives, such as options and futures contracts, can also introduce additional risks, such as the risk of default by the counterparty to the derivative contract. Risk management involves identifying, assessing, and responding to these and other threats to protect the business and its stakeholders.
Cash management
Cash management efficiently manages the flow of cash in and out of business. Effective cash management can help a business to maintain a healthy cash balance, avoid short-term liquidity problems, and take advantage of investment opportunities. Some of the critical activities in cash management include forecasting cash flows, managing cash balances, optimizing the use of cash, and managing risks.
Forecasting cash flows involves predicting the amount and timing of future cash inflows and outflows, such as sales, expenses, and investments. Managing cash balances involves deciding how much cash to hold in the business and where to have it, such as in a checking, money market, or investment account.
Optimizing the use of cash involves making decisions about how to use some money to generate the most excellent value for the business, such as by investing in new opportunities or reducing debt. Managing risks involves identifying and mitigating potential threats to the business’s cash flows, such as changes in interest rates or currency exchange rates. Cash management is integral to a business and can help ensure the company has the cash it needs to grow and succeed.
The 20 Most Obnoxious Forms Of Retail Banking
- Charging fees for essential services, such as maintaining a checking account or using an ATM.
- Implementing complex and confusing fee structures that make it difficult for customers to understand the actual cost of their banking services.
- Offering “teaser” rates on loans or credit cards that quickly increase after a certain period.
- Encouraging customers to take on more debt than they can reasonably afford.
- Offering “predatory” loans, such as payday loans with high-interest rates and fees, can trap borrowers in a cycle of debt.
- Using aggressive sales tactics to pressure customers into buying financial products that may not be in their best interests.
- Refusing to provide necessary financial services to specific communities, such as low-income neighbourhoods or communities of colour.
- Providing inadequate or misleading information about the terms and conditions of financial products.
- Failing to protect customer data and information from cyber-attacks and other security threats.
- Providing poor customer service, including long wait times and unhelpful or unprofessional staff.
- Not offering competitive interest rates on savings accounts and other products.
- Failing to adequately disclose the risks and potential losses associated with investment products.
- Using high-pressure sales tactics to sell financial products to vulnerable customers, such as seniors or those with limited financial knowledge.
- Closing branches and reducing access to in-person banking services, leaving customers with fewer options for managing their money.
- Making it difficult for customers to switch to another bank or financial institution.
- Failing to properly investigate and resolve customer complaints and disputes.
- Not offering accessible banking options for individuals with disabilities.
- Not providing clear and understandable information about fees, charges, and other terms and conditions of financial products.
- Not providing adequate support and resources to help customers manage their money and avoid financial difficulties.
- Not providing a clear and transparent process for resolving disputes and complaints.