Commercial banks in the United States range from global institutions holding trillions in assets to single-branch community banks serving one county. Well-known examples of commercial banks include JPMorgan Chase, Bank of America, Citigroup, and Wells Fargo at the largest end, alongside thousands of regional and community banks operating across states, metropolitan areas, and small towns. Roughly 4,000 FDIC-insured commercial banks operate in the country, and while their scale varies enormously, they all share the same core charter: the authority to accept deposits from the public and lend those deposits out.
What Makes a Bank a Commercial Bank
A commercial bank is a for-profit, shareholder-owned institution that holds a charter from either a state government or the federal Office of the Comptroller of the Currency. That charter authorizes two activities no other type of business can do together: take deposits and issue loans. A national charter comes from the OCC and automatically makes the bank a member of the Federal Reserve System. A state charter comes from the state’s banking department, with supervision by either the FDIC or the Federal Reserve depending on whether the bank elects Federal Reserve membership.1Partnership for Progress. De Novo Bank Application Process
Every FDIC-insured commercial bank protects deposits up to $250,000 per depositor, per ownership category, at each insured bank.2FDIC. Understanding Deposit Insurance That coverage applies to checking accounts, savings accounts, CDs, and money market deposit accounts. It does not apply to investment products sold at the bank, such as stocks, bonds, mutual funds, annuities, or life insurance policies, even when a bank employee sold them to you.3FDIC. Financial Products That Are Not Insured by the FDIC
With that foundation, the useful way to look at examples is by size and reach, because the category a bank falls into shapes what it does and who it serves.
Global Systemically Important Banks
The largest commercial banks in the United States are designated by the Federal Reserve as Global Systemically Important Banks, or G-SIBs. These eight institutions face the highest capital, liquidity, and stress-testing requirements because their failure could destabilize the broader financial system.4Federal Reserve Board. Global Systemically Important Banks The current list:
- JPMorgan Chase
- Bank of America
- Citigroup
- Wells Fargo
- Goldman Sachs
- Morgan Stanley
- Bank of New York Mellon
- State Street
JPMorgan Chase, the largest by assets at roughly $4 trillion, illustrates the universal bank model. It runs a massive consumer and commercial banking operation alongside one of the world’s largest investment banking divisions.5JPMorgan Chase & Co. Annual Report Bank of America combines the nation’s largest commercial and industrial lending operation with a full-service investment bank. These institutions serve everyone from individual checking account customers to sovereign governments.
The universal bank model became possible after the Gramm-Leach-Bliley Act of 1999 repealed most of Glass-Steagall, allowing bank holding companies to expand into financial holding companies that own both commercial banks and securities firms under one corporate umbrella.6Office of the Comptroller of the Currency. The Repeal of Glass-Steagall and the Advent of Broad Banking The separation did not disappear entirely. The commercial bank subsidiary still cannot underwrite and deal in most securities directly, and the broker-dealer subsidiary cannot accept deposits.7Congress.gov. The Glass-Steagall Act: A Legal and Policy Analysis
Regional Banks
Regional banks operate across several states or a large metropolitan area without the global footprint of a G-SIB. They offer a full range of retail and commercial services and tend to compete hardest for middle-market business clients. A mid-sized company that needs a multi-million-dollar credit facility and a banker who picks up the phone will often find a better fit at a regional bank than at one of the eight largest institutions.
The product menu at a regional bank looks much like the one at a G-SIB: checking and savings accounts, CDs, mortgages, auto loans, business lines of credit, term loans, and treasury management services for corporate clients. What differs is the depth of specialized offerings and the size of the deals the bank can handle on its own balance sheet.
Community Banks
Community banks are the smallest category, focused on a specific city, county, or rural area. They make up the majority of U.S. bank charters by count, even though they hold a small fraction of total banking assets. Their value is local knowledge. Loan decisions are made by people who understand the local economy and often know the borrower personally, which can mean approval for a creditworthy small business that a larger bank’s automated underwriting would reject.
For many rural communities, the local commercial bank is the only meaningful source of credit for small businesses and agricultural operations. Community banks are also active participants in government-backed lending programs like the Small Business Administration’s 7(a) loan program, where the SBA guarantees a portion of a loan made by the bank rather than lending directly to the borrower.8U.S. Small Business Administration. 7(a) Loans
What Commercial Banks Do Across Every Size Tier
Regardless of scale, every commercial bank runs on the same two-sided business. On the retail side, that means checking accounts, savings accounts, CDs, mortgages, auto loans, personal loans, debit cards, and mobile banking. On the commercial side, it means lines of credit and term loans for businesses, plus treasury management tools that automate receivables, disbursements, and fraud detection. Larger commercial banks add trade finance products such as letters of credit and banker’s acceptances, which reduce the risk in cross-border transactions where buyer and seller may have no prior relationship.9Federal Reserve Bank of Richmond. Instruments of the Money Market – Chapter 10 Bankers Acceptances
The revenue model is the same across the tier as well. A bank pays a relatively low rate on deposits, lends that money out at a higher rate, and earns the spread as net interest income. Fee income from account maintenance, wire transfers, overdrafts, interchange, and treasury services fills in the rest.
Institutions That Look Like Commercial Banks but Are Not
Several types of financial institutions accept deposits or make loans without meeting the definition of a commercial bank. Knowing where the line is helps when you are comparing options for a checking account or a loan.
Credit Unions
Credit unions offer checking accounts, savings accounts, and loans that look almost identical to a commercial bank’s products. The difference is ownership. A credit union is a not-for-profit cooperative owned by its members, so the depositors themselves are the owners.10National Credit Union Administration. Overview of Federal Credit Unions With no outside shareholders expecting a return, credit unions can often offer lower loan rates and higher deposit rates. The tradeoff is access: membership is usually restricted to employees of a specific company, residents of a geographic area, or members of an association.11MyCreditUnion.gov. What Is a Credit Union?
Savings and Loan Associations
Savings and loan associations, sometimes called thrifts, were originally chartered to promote homeownership, and their asset portfolios were historically concentrated in residential mortgages. Commercial banks have always maintained far more diversified portfolios, including commercial real estate loans, business credit lines, and large holdings of government securities. The distinctions have blurred over the decades as thrifts gained broader lending powers, but the legacy difference is one of scope.
Investment Banks
Investment banks operate in capital markets. They help corporations raise money by underwriting stock and bond offerings, advise on mergers and acquisitions, and run trading desks. Standalone investment banks do not take retail deposits. Where you see names like Goldman Sachs and Morgan Stanley on the G-SIB list, that is because their parent companies are structured as financial holding companies that include commercial banking subsidiaries alongside the investment banking business.
Neobanks
Neobanks are digital-only financial platforms with no physical branches. They typically offer checking and savings products with lower fees and higher deposit rates, made possible by avoiding branch overhead. The detail that matters: a neobank is usually not a chartered bank. It is a technology company that partners with an FDIC-insured commercial bank behind the scenes. Your deposits are only protected if they are actually held at that partner bank, and if the neobank itself fails or mismanages the relationship, recovering your money can be complicated. If you use a neobank, it is worth knowing which FDIC-insured bank actually holds your deposits.