Top 4 types of bank and 3 basic services

online internet bank Malaysia

You proudly agree that you as a Malaysian, have been to the bank on a regular basis so that you get so comfortable with it, you have used most of the bank services and think that you have known all of them. Then let this writing be your checklist of what you know about banks. 

Types of bank

online internet bank Malaysia

So far, there are 4 types of banks worldwide and most countries have built their banking system based on these 4 basic styles. 

Retail Banks

They offer the service to the public and often consist of a wide range of branch units and main offices for the convenience of the general customers. Banks within this category will offer a wide range of services like checking and saving accounts, loans, and mortgage services. They would also provide financing for automobiles and short-term loans such as overdraft protection and credit card services. 

Additionally, retail banks offer access to investments into CDs, mutual funds, and individual retirement accounts (IRAs). Some other large-scale retail banks also serve high-net-worth individuals with specialty services such as private banking and wealth management services.

Almost all banks located within this section have also relocated themselves on the virtual ground with online internet bank Malaysia service applications like Hong Leong Bank. 

Commercial banks

They are also known as corporate banks offering more tailored services to business clients. Their customers vary from small businesses to large corporate entities. Besides basic business banking, commercial banks also cater to credit services, cash management, commercial real estate services, employer services, and trade finance services. 

Investment banks

Investment banks are more focused on providing corporations with complex services and financial transactions. Such as underwriting and assisting with mergers and acquisitions, just as their name implies. They are primarily financial intermediaries in these transactions with most customers coming from large corporations, pension funds, government, hedge funds, and financial institutions. 

Central banks

This might be the black sheep of the family since these banks will not deal with any of those above clients. Their mission is to be responsible for the stability of the currency and the economic system as a whole. Since they are authorized by the government as an independent entity to supervise the nation’s money supply and monetary-related policy. They also have a role in regulating the capital and reserve requirements of the nation’s banks.

Basic functions of a bank

online internet bank Malaysia

Checking accounts: this is a deposit used by customers and businesses to pay for their bills and cash withdrawals. A certain amount of monthly fees, usages fee, or both will usually come along with these transactions. 

Saving accounts: they are similar to checking accounts as people could use them to pay for their bills and cash withdrawals. However, saving accounts will pay interest to the depositor the longer they let their money in the account. 

Loan services: this is when the banks offer loans to consumers and businesses as the cash that is deposited by their customers is lent out to other customers at a higher rate of interest than the depositor is paid.

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