Retail banking services encompass a variety of account types. Besides the standard savings and checking accounts, retail banks offer credit cards, investment services, certificates of deposit and retirement accounts. These banks also offer a full range of loan accounts, including mortgages, car loans, home equity loans, personal loans, business loans and private student loans.
When most people think of traditional retail banking services, a savings or checking account comes to mind. Both accounts are deposit accounts that individuals are free to make deposits to as little or as much as they would like. Some retail banks will have stipulations regarding the minimum opening deposit amounts as well as an average monthly minimum that needs to be maintained in order to avoid fees. Checking accounts may or may not include interest payments, while savings accounts typically do. Debit cards may be offered in conjunction with these types of accounts to make the withdrawal of available funds more convenient.
Additional savings options are usually a part of the portfolio of retail banking services. Interest rates on certificates of deposit are typically higher than that of a regular savings account. The main difference is that a certain amount of money needs to be deposited for a longer time frame and cannot be withdrawn until the end of the period. Individual retirement accounts can be set up through a retail bank and work similarly to an employer's retirement plan. A maximum amount of funds can be contributed each year and cannot be withdrawn until a certain age without receiving a penalty.
Investment services may also be offered by a retail bank. They are usually provided under a partnership with investment brokerage firms. Bank customers who maintain checking accounts may be able to transfer a certain amount of available funds towards the purchase of stocks, bonds and mutual funds. These types of accounts are usually not insured in the event of bank failure, while other savings accounts such as certificates of deposit are.
Credit and loan accounts are another part of retail banking services. Banks may offer a credit card to customers. The credit cards work the same as other cards on the market, but could possibly be tied to customers' checking accounts for withdrawal protection if they so choose. Retail banking services also generally offer a variety of loans, including mortgages for new purchases and refinances. Car loans for new and used vehicle purchases, personal and business lines of credit, and student loans might all be available through a retail bank.