state bank or national bank, owned by stockholders, that accepts demand deposits, makes commercial and industrial loans, and performs other banking services for the public. The term commercial bank is synonymous with full service bank, because many commercial banks supply trust services, foreign exchange, trade financing, and international banking. Most state chartered trust companies are also commercial banks. Commercial bank deposits are insured by the Bank Insurance Fund (BIF), a federal insurance fund managed by the Federal Deposit Insurance Corporation.
most common and most unrestricted type of bank, allowed the most latitude in its services and investments. Insurance for depositors may be provided by the Federal Deposit Insurance Corporation (FDIC).
a financial institution authorized to provide a variety of financial services, including consumer and business loans (generally short-term), checking services, credit cards and savings accounts. Certain deposits at most commercial banks are insured by the Federal Deposit Insurance Corporation. Commercial banks may be members of the federal reserve system.
Example: Although commercial banks do make long-term mortgage loans, they have traditionally concentrated on short-term loans and are good sources for home-improvement loans and second loans secured by home equity.
