how commercial banks work
commercial banks provide basic banking services and products to the general public both individual consumers and businesses the following table highlights some of the key services commercial banks provide to their retail customers business banking services also include bank accounts investments and lending products commercial banks also provide their business clients with merchant services which allows companies to accept payments electronically from their customers these financial institutions have traditionally been located in buildings where customers come to use teller window services and automated teller machines atms to do their routine banking with the rise in internet technology most banks now allow their customers to do most of the same services online that they could do in person including transfers deposits and bill payments the money that customers deposit at commercial banks is insured by the federal deposit insurance corporation fdic including cash in savings accounts and cds customers have the option to withdraw money upon demand and the balances are fully insured up to 250 000 therefore banks do not have to pay much for this money 1a growing number of commercial banks operate exclusively online where all transactions with the commercial bank must be made electronically because these banks don t have any brick and mortar locations they can offer a wider range of products and services at a lower cost or none at all to their customers 