Prominent services under personal banking range from checking and savings accounts, home and personal loans, and mortgages to credit cards and certificates of deposit (CDs). Whether it is a normal student, homemaker, or working professional, personal banking is for everyone, facilitating them to navigate through personal finance in a secure manner.Â
Retail banking services are provided by different types of personal banks such as government or central banks, state banks, and the branches of these banks. Also, commercial banks and community banks provide personal banking services.Â
Personal Banking: Key Takeaways
- Personal banking also referred to as retail banking, is associated with catering banking services to individuals rather than businesses or companies.Â
- Important personal banking services include credit cards, mortgages, loans, savings, and checking accounts. It facilitates people to access credit, manage their money, and deposit funds securely.Â
- Personal banking services are made available to retail clients or individuals via personal banking branches, online banking, and mobile banking.Â
- Retail or personal banking is quite different from private banking or corporate banking, which caters to businesses or companies.Â
Personal Banking: Definition & ImportanceÂ
Personal banking refers to the management of funds, credit, loans, and accounts of individuals under a bank. Personal banking is often referred to as retail banking or consumer banking as it serves individuals, unlike corporate or private banking, which caters to businesses.Â
Personal banks can be government banks, state banks, community banks, or any divisions of commercial banks. Further, several fintech companies today provide personal banking services via smartphone apps and internet websites or platforms.Â
Personal banking is highly significant in an individual’s life for the management of their finances, accessing loans and credit, and living a financially secure life. Consumers receive many services from personal banks such as savings accounts, checking accounts, lines of credit, personal loans, home loans, debit cards, mortgages, CDs, and credit cards.
Further, individuals make financial savings by depositing money in personal banks and growing it by the interest they earn on the deposited capital.Â
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What is the Personal Banking Branch?Â
Personal banking branches are the local branches of retail banks located at remote and close locations to provide personal banking services like accounts management, loans, and other financial work.Â
Most personal banking clients use the local branches of personal banking to access these services on-site and in an efficient manner. This is why almost all the banks have numerous branches all around the country, trying to reach the farthest districts and remote villages.Â
At the personal banking local branches, financial advisors and representatives of the bank concerned provide financial advice and customer services. This facilitates ease in acquiring desired financial services.Â
For instance, the State Bank of India (SBI) has several local branches in almost all districts of the country, and personal banking services such as internet banking, doorstep banking, recurring deposits, savings and zero balance accounts, etc. are provided to individuals onsite.Â
It is to be known, that the personal banking branches of SBI are open through the weekdays along with Saturdays and closed on Sundays only. Â
Types of Personal Bank
There is no particular definition to distinguish personal or retail banks from corporate or private banks as many banks cater to both these services. However, if we talk about banks that significantly contribute to personal banking services, these banks must be noted. They are as discussed below:Â
1. Central Bank
The Reserve Bank of India (RBI) is the central government bank of India. It is responsible for the regulation and control of money flow in the country. Notably, the central bank offers personal banking services such as Internet banking and mobile banking for payment of bills etc, loans and borrowing services, and much more to its retail customers. Â
2. State BanksÂ
There are a number of state banks in India. Most of these banks provide personal banking services to their retail clients. Personal banking services generally incorporate home, car, education, personal loans, fixed deposits, life insurance coverage, ticket booking, internet banking, mobile banking, doorstep banking, accounts management and much more.Â
3. Community Bank
Community banks are known for their customized services and close client-bank relationships as they are owned locally. Besides providing personal banking services, they support the development of local businesses and take part in community development initiatives.Â
Personal banking services provided by community banks incorporate loans, money market accounts, credit cards, mortgages, certificates of deposits (CDs), and checking and savings accounts.Â
Also, check, How to get a job in Private Banks after graduation?Â
4. Commercial Bank
Commercial banks provide retail or personal banking services to individuals, families and small to medium businesses. These include loans, mortgages, credit cards, and savings and checking accounts.Â
Commercial banks are a vital part of the economy as they help manage the finances of the people and businesses to manage their capital, borrow funds, and grow.Â
Banks in India such as State Bank of India (SBI), RBL Bank, IDFC FIRST Bank, Canara Bank, Federal Bank, Bank of Baroda, etc. provide retail banking services to individuals for day-to-day financial management.Â
What are some essential Personal Banking Services?Â
Personal banking, also termed retail banking, offers numerous banking services and products to retail clients. Some of the notable ones include:Â
1. AccountsÂ
Retail clients or individuals can open varied types of accounts in a personal bank. These include checking accounts, savings accounts, certificates of deposit (CDs), financial deposits (FD), and money market accounts.Â
2. LoansÂ
Auto loans, mortgage loans, personal loans, education loans, health loans, etc. are important services offered to retail customers by personal banks. These are helpful in unforeseen situations and in fulfilling one’s wishes without the wait for the money. Â
3. Credit
Personal banks provide credit cards and debit card services to their retail clients. While debit cards are used to draw money from their account, credit cards facilitate money withdrawals from the account based on the credit score of the individual.Â
4. InvestmentÂ
Personal banking services incorporate wealth management and investment banking for customers to make suitable investments for financial gains.Â
5. Other Banking ServicesÂ
There are several other banking services provided by personal banks other than those mentioned above. These include Internet banking services to access accounts and financial actions, mobile banking to access accounts via smartphones, doorstep banking, safe deposit locker services, e-mail and e-pay, etc.Â
What are the differences between Personal Banking and Private Banking?
Private banking is different from personal banking in several ways. However, the most important difference is in the audience it caters to.Â
While personal banking is for all individuals, private banking, also known as corporate banking, serves financial services to businesses specifically. There is also a key difference in the types of services they provide. Let us understand these differences between personal banking and private banking in detail.Â
1. Access and Client Base
The client base of personal banking includes a wide range of customers irrespective of their financial backgrounds and income status. It is meant for all individuals. Interestingly, people can open zero-balance accounts in many retail banks in India. This way, personal banking is more accessible and inclusive in providing financial and banking services.Â
On the other hand, private banking is quite reserved and exclusive. It is meant for only the small section of people who have high wealth status and are a substantial asset holder. They provide financial and banking services to institutional investors, government and government bodies, institutions, businesses, and high-net-worth individuals.Â
There is a particular eligibility criterion to have an account in a private bank and it requires a minimum balance mandatorily. Typically, access to private banks is granted via invitations only.Â
2. Banking Services and Financial SolutionsÂ
Personal or retail banking provides fundamental banking services to the general public. These generally include savings accounts, credit and debit cards, loans, etc.Â
The notion behind personal banking services is to provide easy and approachable financial services to the general public for effective financial management and help to meet their financial goals irrespective of their current financial status. Thus, there are provisions for interest-paid savings accounts, SIPs, financial deposits (FDs), loans, etc. These banking services are not customized and are brought together keeping a larger audience in mind.
On the other hand, private banking services are customized, exclusive and personalized to meet financial and investment goals and make greater gains. Everything is perfectly customized to the financial needs of the commercial client via a dedicated manager-client relationship.Â
Besides the general banking services, there are additional perks in private banking such as luxury concierge services, family office solutions, preferential rates of interest on loans, and more.
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Personal Banking FAQs
Q1. What are personal banks?
Ans: Personal banks, retail banks or consumer banks are those that cater to individuals and provide financial and banking services for financial management and savings. Personal banking services include personal loans such as home and car loans, etc, mortgages, credit cards and debit cards, certificates of deposits (CDs), savings and checking accounts, etc.
Q2. What is an example of a retail bank?
Ans: Any bank that provides banking services such as checking accounts, loans and mortgages, savings accounts, credit and debit cards, etc. to individuals is a retail bank or personal bank. A suitable example of a retail bank would be the State Bank of India (SBI) as it provides a wide range of personal banking services to its retail customers.
Q3. What is the difference between personal banking and private banking?
Ans: Personal banking or retail banking caters to banking services to individuals and small to medium businesses for financial management and day-to-day finances. On the other hand, private banking or commercial banking caters to businesses, institutional investors, governments, and institutions only. They provide customized financial services to their clients for wealth management and financial growth.
Q4. Are retail banking and personal banking the same?
Ans: Yes, Retail banking, also known as personal banking, refers to banking services provided by banks to individuals for the management of their daily finances.
