Investment banks, on the other hand, work with large corporations, governments, and institutional investors, usually in support of complex transactions. They might underwrite debt or stock issues, for example, or advise on mergers and acquisitions.
Large global banks often provide commercial, retail, and investment banking services through different divisions. The three largest commercial banks in the U.S., according to the Federal Reserve, are JPMorgan Chase (JPM -1.00%), Bank of America (BAC -0.81%), and Citigroup (C -1.98%). All three have different offerings for individuals, businesses, and organizations undergoing major financial transitions.
Considerations when choosing a commercial bank
Some commercial banks cater to established, mid-sized businesses, while others target side hustles and small businesses. To find a good match for your operation, evaluate the following factors.
- Fees. Review the fee schedule with an eye on the services you'll use today and the ones you might use tomorrow. Check for recurring account maintenance fees plus caps on monthly activity. Know that there are commercial banks that don't charge maintenance fees and allow unlimited transactions.
- Services. Analyze the services the bank offers. Make sure it will meet your needs today and support your business as it grows.
- Interest yield on savings or checking. If your business requires you to hold a lot of cash, look for a commercial bank that pays a competitive interest rate on checking or savings deposits. If you're running the business on minimal cash, this is less of a factor. You may opt for a less competitive yield in exchange for a more palatable fee structure.
- Insured deposits. Verify that the bank has FDIC insurance on your deposits.
- Online and mobile services. If you expect to bank online or on your mobile device, check customer reviews for comments on the bank's digital services. Verify that you can easily transfer funds into, out of, and between your commercial accounts using the bank's mobile app. You also likely need a mobile check deposit feature.
- Integrations. If you use (or plan to use) an accounting application like QuickBooks or Harvest, verify that you can easily download banking transactions to your accounting software.
- Branch locations. Nearby branch locations are essential if you prefer in-person banking or expect to use an ATM for cash withdrawals or deposits.
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