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What Is a National Bank?

Kailey Hagen
By: Kailey Hagen

Our Banking Expert

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There's no shortage of banks clamoring to house your money these days, but they're not all created equal. National banks, which include some of the largest and best-known banks today, are quite different from your local neighborhood bank down the street. In this article, we'll look at how national banks work and how to decide whether one of these is a good place to stash your cash. First, we’ll start with what is a national bank.

What is a national bank?

The definition of a national bank varies depending on where you are in the world. In the United States, a national bank is a commercial bank that's chartered and supervised by the U.S. Treasury.

A national bank can be an online or brick-and-mortar bank. But most national banks are brick-and-mortar institutions. In theory, they can operate in any state, but many restrict themselves to certain regions of the country.

If you step outside the U.S., the term "national bank" means a central bank controlled by the government. This is similar to the Federal Reserve in the United States. American national banks are commercial enterprises that aren't directly operated by the government, though they have to follow government regulations to keep their charter.

What does a national bank do?

National banks offer a variety of banking products to customers, including:

Their product suite is often larger than what you'll find with a smaller, community bank and most have large branch and ATM networks spanning several states.

But national banks also do a few other things. They're authorized to facilitate the auction of U.S. Treasury bonds, which is something that state-chartered banks can't do.

They also pay premiums to the Federal Deposit Insurance Corporation (FDIC). This is a requirement to obtain a national bank charter. Doing this makes a bank a member of the Federal Reserve system and enables it to borrow from its local Federal Reserve Bank when necessary.

Becoming a member of the Federal Reserve also grants FDIC insurance to the bank's customers. This protects your money up to $250,000 per account per bank. That means if you're choosing a savings account at a national bank and that bank later fails, the FDIC will reimburse you for your lost funds up to $250,000.

How do you tell if a bank is a national bank?

National Banks often have "National" in their names. You may also see "N.A.," which stands for "National Association" after its name. You can also look up a list of all active national banks on the U.S. Treasury's Office of the Comptroller of the Currency website.

If you aren't able to find your bank on this list, that's a sign you're probably dealing with a state-chartered bank.

How is a national bank different from a regional bank?

Regional banks are often smaller than national banks, with most having somewhere between $10 billion and $100 billion in assets. But more importantly, regional banks operate under a state charter while national banks operate under a national charter.

This doesn't make much of a difference for you as a customer. It just means the bank operates under state regulations instead of federal ones. These banks usually still possess FDIC insurance and they offer many of the same banking products as national banks. However, their service area is usually smaller. This can be problematic for people who frequently travel outside of the regional bank's service area.

Is a national bank right for you?

National banks hold several advantages over their smaller counterparts. First, many of them have a large network of branches and ATMs. This makes them accessible to a wider range of people. Those who frequently travel within the country probably won't have too much trouble accessing their money when they need it.

National banks also tend to have a wider variety of products and services than community banks, with many offering multiple checking and savings accounts as well as a variety of loan products. Some even offer investment services as well. So national banks are often a great fit for those who prefer to do all of their banking in one place.

But national banks have their drawbacks as well. These institutions are often quite large, and that can lead to an impersonal banking experience. That's not to say a national bank can't have great customer service, but you're not going to develop the personal relationship you could with your local community banker.

National banks -- at least those with large branch networks -- often charge higher fees than community banks, too, and their interest rates aren't always as competitive on savings products. But this is starting to change with the rise of online national banks. Online banks are known for having fewer fees and much better interest rates than traditional brick-and-mortar banks, so one of these is worth considering if you want to keep as much money in your pocket as possible.

Ultimately, it's up to you to decide whether a national bank is a good fit for you. Rather than focusing on what kind of a charter your bank operates under, think about the practicalities that will affect your ability to manage your money. Look into what kinds of accounts the bank offers and what fees it charges as well as your options for managing your money, such as online banking. This will help you decide which bank is the best home for your cash.


  • Some of the largest national banks in the U.S. include Chase Bank, Bank of America, Capital One Bank, American Express Bank, U.S. Bank, and Wells Fargo.

  • National banks operate under a national bank charter and are supervised by the U.S. Treasury. Many operate in several states. Regional banks may also operate in several states, but they tend to be smaller. Most of these operate under a state bank charter.

  • National banks operate under a national bank charter and are supervised by the U.S. Treasury. But they are not national banks in the international sense of the word, where the government controls them and uses them to set monetary policies. That's the job of the Federal Reserve in the United States.

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