Retail Banking: Definition, Advantages, Types and Services

This content may include information about products, features, and/or services that SoFi does not provide and is intended to be educational in nature. Review a bank’s website or ask a representative about its menu of services before you sign up for an account. Retail banking covers different kinds of loans, including home, personal, two-wheeler, auto, and more. You can explore the Navi app if you need a home loan or instant personal loan with an entirely paperless process. These are traditional stores where customers walk in and buy products. Examples include grocery stores, clothing shops, and electronics stores.

Other Types of Banking Services

Using the retail method of accounting, retailers use the projected retail cost to value the inventory. Most of the time, you have to go to a nearby branch or apply online to open a retail bank account. You will need to show proof of who you are and where you live, as well as fill out the registration forms.

Online Stores (E-commerce)

That said, corporate banking also serves an important need and generates income for banks as well. Retail banking offers deposit, access, and lending services to individuals. Commercial banking is another name for corporate banking, which offers banking services to businesses, governments, and other institutions. While retail banking offers its services to people for personal use, commercial banking serves institutions. Retail banking provides many services, such as savings and checking accounts, personal loans, home mortgages, credit cards, and a range of investment and insurance goods made just for each customer. Retail banking assists consumers in directly connecting with the bank to manage their everyday requirements, for example, personal loans and mortgages.

Handicraft Business Growing Through Retail Outlets

• They typically have more personnel than small banks and serve a wider geographic area.
• This is known as the reserve requirement and is seen as a safety and liquidity measure.
• These services usually consist of checking and savings accounts, credit cards, mortgages, personal loans, and investment goods.
• Instead, their primary function is to buy stocks and sell back to their clientele.
• SoFi does not guarantee or endorse the products, information or recommendations provided in any third party website.
• Although you can use the retail method for tax purposes, you will likely want to use a different method — like weighted average — to ensure you are reporting the most accurate information.

•   Retail banking plays a vital role in the economy by facilitating transactions and helping individuals save, manage money, and access credit for their personal financial adjusting entries goals. In fact, there are certain services for which you must rely on other types of banks, because retail banks don’t offer them. Retail banking gives options such as checking, savings, and retirement accounts.

Are retail banking deposits safe?

For example, product damage, theft, depreciation, markdowns can affect the price of the inventory. This is why the calculations made using the retail inventory method should serve only as an estimate. Retail banks often help people learn more about money by giving them training materials, workshops, and one-on-one advice. This gives people the information they need to make smart financial choices.

Retail banking, also known as consumer banking, refers to the provision of financial services directly to individual customers. Retail banking is a bank’s services that deal directly with consumers, while corporate banking is the part of the banking industry that serves business or corporate customers. Transactions in retail banking are typically smaller in size and higher in volume compared to corporate banking, which tends to focus on larger, more complex transactions. Corporate banking is not necessarily better Bookstime than retail banking; they’re designed to serve different audiences.

Retail vs Corporate Banking: What’s the Difference?

For example, a store selling only baby products or a shop that sells only organic food. If you buy goods for $70 and sell them for $100, your cost-to-retail ratio is 70 percent. YourMoneyWise is a community of money savers, investors, earners, entrepreneurs, enthusiasts, content creators and givers. Her 15-year business and finance journalism stint has led her to report, write, edit and lead teams covering public investing, private investing and personal investing both in India and overseas. She has previously worked at CNBC-TV18, Thomson Reuters, The Economic Times and Entrepreneur. Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services.