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3 years ago

What is the difference between a commercial bank and a savings bank

2 answers:

3 0

The primary difference is the way each is regulated, which determines the type of banking products they offer. ... Both commercial banks and S&Ls also make loans to businesses and government agencies.

DerKrebs [107]3 years ago

3 0

Answer:

A commercial bank provides services such as accepting deposits, making business loans, and offering basic investment products that is operated as a business for profit.

A savings bank has a primary purpose which is accepting savings deposits and paying interest on those deposits.

Explanation:

Commercial banks are owned and managed by a board of directors selected by stockholders. Many commercial banks are large, multinational corporations.

S&Ls (Savings and Loan banks- just another name) are owned and chartered differently than commercial banks, and are generally more locally oriented in terms of customers.

By law, S&Ls may lend up to 20% of their assets for commercial loans, and only half of that can be used for small business loans. S&L must be able to show that 65% of its assets are invested in residential mortgages and other consumer-related assets.

Commercial banks do not have these types of limitations that S&L banks do.

Hope this helped :)

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