Differences Between Commercial And Merchant Banks

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Among the different financial institutions, there are merchant banks and commercial banks that have diverse roles to play in an economy. The differences that exist usually depend on the services provided by them and the target customers. Commercial banks provide access to anyone with basic banking needs while merchant banks target large corporations and wealthy individuals.
How commercial banks functionGeneral banking functions are offered by the commercial banks. There is small business merchant account options for the small business owners as well as general saving and checking accounts which individuals can open and operate. These banks usually raise funds and collect deposits. There are interests charged on the loans provided and differing rates of interest paid on the savings deposits and others. These banks also purchase bonds from corporate entities as well as from the governments.
Differences between retail and merchant banksThe commercial banks are often termed as retail banks as well. They allow individuals and small business owners to open different kinds of accounts like small business merchant account and loan products can be availed of. On the other hand, merchant banks are those which focus on investing in the assets of a depositor in a financial portfolio. Investments are managed by these financial institutions. These banks are also known as investment banks. They help to manage the assets of large organizations and wealthy individuals as well as invest these portfolios in other areas. Counsel and advice to large corporations is also offered by merchant account providers, contact esafe payments.
Emergence of banksCommercial as well as merchant banks date back to hundreds of years. Merchant banks did not start off as banks per se, but they were started by grain merchants in the middle Ages. Jewish traders were key to the development of merchant banking which helped to finance the long grain trading journeys. On the other hand, commercial banks and how they developed to aid the common citizens developed from the basic money lending practices that existed since the Roman Empire.
Deciding on the right financial institutionIf you are a businessman, you will have different banking requirements. While a small business enterprise will need a safe deposit of the funds, large corporations not only need their money to handle and invested in the right portfolios, but also to gain advice regarding financial investments, mergers and acquisitions and to know the relevant regulatory norms. It is necessary to check the reputation and reliability of offshore credit card merchant account factors of a commercial or merchant bank before a business owner decides to do business with them. Finding the right advice and tools to make the most of the available liquid assets and finding favorable loan products and terms need to be prioritized.