As an individual or business owner, it’s easy to get overwhelmed by all the banking options out there. Understanding the differences between retail and commercial banking can help.
Retail banking targets individual consumers, offering products like deposit accounts and loans. On the other hand, commercial banks serve businesses, governmental bodies, and institutions. Importantly, some banks offer retail and commercial banking, catering to both types of customers.
Read on to learn more about retail and commercial banking, as well as key differences between the two.
Retail banking encompasses the banking products and services geared toward “retail” customers or individual consumers. You may also hear retail banking referred to as consumer banking or personal banking. If you have a personal checking or savings account, you’re a customer of a retail bank.
Retail banking is available at several types of institutions, from small community banks and credit unions to large national banks. At these larger banks, retail banking may be one division of the larger bank’s offerings. You can also access retail banking through online banks.
Read more: These are the 20 biggest banks in the U.S.
Because retail banking serves individual customers rather than large corporations, it often involves smaller transactions and tends to be less profitable than commercial banking.
Retail banking products and services
Retail banking includes a range of products and services aimed at helping consumers manage their money. Common examples include:
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Deposit accounts: Retail banking customers can open checking accounts, savings accounts, money market accounts, and certificates of deposit (CDs). These accounts provide a secure place to save, earn interest, receive deposits, and more.
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Mortgages: Many retail banks provide mortgages, home equity loans, and home equity lines of credit (HELOCs) to individuals purchasing homes or those wanting to borrow against their home equity.
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Loans and lines of credit: Retail banks may offer several types of loans, including personal loans, auto loans, and student loans. These loans help qualified customers finance a range of expenses.
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Credit cards: Many banks offer a variety of credit cards, which allow customers to borrow, earn rewards, and take advantage of purchase protection.
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Investments and insurance: You may be able to open investment accounts — such as IRAs and health savings accounts (HSAs) — and purchase investments from retail banks. And some offer insurance policies too.
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Branch access: Some retail banks have a network of branches to serve customers in person. On the other hand, some banks operate entirely online.
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Online and mobile banking: Many retail banks cater to online users with robust mobile and desktop banking platforms. These tools let you view your balances, make transfers, pay bills, deposit checks, and more.
Read more: 10 best mobile banking apps of 2025
Commercial banking, sometimes referred to as corporate banking, refers to the banking products and services catered to corporations, businesses, and government organizations. Commercial banks may even serve a specific business type, model, or industry.
Because commercial banking serves large corporate bodies, its products and services differ from those of retail banking. (However, commercial banks may have retail banking divisions catering to individuals and businesses.)
Many large national banks — like JPMorgan Chase, Wells Fargo, and Bank of America — offer commercial banking services. But smaller regional banks and credit unions can offer these services too.
Due to its customer base, commercial banking typically involves larger transactions, loans, and fees compared to retail banking.
Read more: Community bank vs. credit union: Key differences
Commercial banking products and services
Common commercial banking products and services may include:
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Deposit accounts: Like individual consumers, businesses need checking and savings accounts to help them save, manage money, and pay bills.
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Credit and financing: Commercial banks offer business credit cards, loans, and other types of financing that allow businesses to grow and expand.
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International banking: International banking helps businesses and other entities transact across borders, including payment processing, asset management, and investment banking.
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Treasury management: These services help businesses manage their cash flow, receivables and payables, debt, merchant services, and more.
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Wealth management: Like retail banking, commercial banking can also include wealth management services, such as succession planning, retirement planning, and trust services.
Read more: What is offshore banking?
Though retail and commercial banking have many similarities, they also differ in several ways. The following is a look at some key differences between them.
Retail banking caters to individual customers, while commercial banking caters to small and large businesses, corporations, and government entities.
Products and services
Retail banks typically offer deposit accounts, loans, credit cards, and investment accounts. Meanwhile, commercial banking offers all of this, plus international banking, Treasury management, and more.
Because retail banking caters to individuals, this type of banking typically deals in smaller transactions. Commercial banking, on the other hand, often facilitates much larger transactions at a larger scale.
While retail banking assists individuals in borrowing, saving, and building wealth, commercial banks offer products and services aimed at facilitating business growth.
Retail banks are generally less profitable than commercial banks for several reasons. First, as mentioned above, retail banks deal with smaller transactions compared to commercial banks. Second, many retail banks operate a wide network of brick-and-mortar branches, which can cut into profitability.