Commercial Banks Definition
Commercial banks are defined as financial institutions that accept deposits, make loans, and offer basic financial products like checking accounts and savings accounts to individuals and small businesses. Commercial banks can be for-profit or non-profit entities, but they must be FDIC insured.
The role of commercial banks has evolved over time. In the early days of banking, commercial banks were responsible for safeguarding deposits and lending money to businesses and individuals. Today, commercial banks offer a wider range of services including investment banking, wealth management, and consumer banking.
Despite this evolution, the core function of commercial banks remains the same: to provide a safe place for people to store their money and to extend credit when needed.
