Commercial Bank

Business, Legal & Accounting Glossary

Definition: Commercial Bank


Commercial Bank

Quick Summary of Commercial Bank


An institution which accepts deposits, makes business loans, and offers related services. Commercial banks also allow for a variety of deposit accounts, such as checking, savings, and time deposit. These institutions are run to make a profit and owned by a group of individuals, yet some may be members of the Federal Reserve System. While commercial banks offer services to individuals, they are primarily concerned with receiving deposits and lending to businesses.



Video Guide For Commercial Bank




Full Definition of Commercial Bank


A commercial bank is a financial intermediary which collects credit from lenders in the form of deposits and lends in the form of loans. A commercial bank holds deposits for individuals and businesses in the form of checking and savings accounts and certificates of deposit of varying maturities while a commercial bank issues loans in the form of personal and business loans as well as mortgages. The term commercial bank came about as a way to distinguish it from an “investment bank.” The primary difference between a commercial bank and its counterpart is that a commercial bank earns revenue by issuing primary loans from its pool of deposits while an investment bank brings debt and equity offerings to market for a fee. Among its assets, including loans, a commercial bank holds a portfolio of other securities to generate proprietary income.


Cite Term


To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.

Page URL
https://payrollheaven.com/define/commercial-bank/
Modern Language Association (MLA):
Commercial Bank. PayrollHeaven.com. Payroll & Accounting Heaven Ltd.
January 18, 2022 https://payrollheaven.com/define/commercial-bank/.
Chicago Manual of Style (CMS):
Commercial Bank. PayrollHeaven.com. Payroll & Accounting Heaven Ltd.
https://payrollheaven.com/define/commercial-bank/ (accessed: January 18, 2022).
American Psychological Association (APA):
Commercial Bank. PayrollHeaven.com. Retrieved January 18, 2022
, from PayrollHeaven.com website: https://payrollheaven.com/define/commercial-bank/

Definition Sources


Definitions for Commercial Bank are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 22nd November, 2021 | 7 Views.