A bank is a financial institution licensed to receive deposits and make loans. Banks in the USA may also provide financial services such as wealth management, currency exchange, and safe deposit boxes. There are several different kinds of banks including retail banks, commercial or corporate banks, and investment banks. In most countries, banks are regulated by the national government or central bank.

Banks have two important economic functions. First, they operate a payments system, and a modern economy cannot function well without an efficient payments system. We make most of our payments by writing checks, swiping credit cards issued by banks or tied to them, and by paying bills via online banking. 

Banking in the United States launched in the late 1790s along with the country’s founding and has developed into highly influential and complex system of banking and financial services. Anchored by New York City and Wall Street, it is centered on various financial services namely private banking, asset management, and deposit security.

The beginnings of the banking industry can be traced to 1790 when the Bank of Pennsylvania was founded to fund the American Revolutionary War. After merchants in the Thirteen Colonies needed a currency as a medium of exchange, the Bank of North America was opened to facilitate more advanced financial transactions.

Banks are among the oldest businesses in American history—the Bank of New York, for example, was founded in 1784, and as the recently renamed Bank of New York Mellon it had its 225th anniversary in 2009. The banking system is one of the oldest, largest, and most important of US industries. Most adult Americans deal with banks, often on a fairly regular basis. 

According to the US Federal Deposit Insurance Corporation, there were 6,799 FDIC-insured commercial banks in the USA. The country’s central bank is the Federal Reserve Bank, which came into existence after the passage of the Federal Reserve Act in 1913.

What Types of Banks are there in the United States?

There are several different types of banking institutions that all work in almost exactly the same way. 

Retail banks: Retail banks are the ones you come across most often. These banks focus on the consumer and provide the public with a place to deposit money into their own checking and saving accounts. These kinds of banks give credit cards, offer loans, and offer numerous locations for you to manage your finances.

Commercial Banks: Wikipedia’s definition of a commercial bank really hits the nail on the head. Basically, a commercial bank is “an institution that provides services such as accepting deposits, providing business loans, and offering basic investment products.” These banks started out with the aim to serve the business sector and not just the general public. These banks rely on lines of credit to manage cash flow and provide any other kind of service a business might need.

Credit Unions: A credit union is a member-owned financial cooperative, controlled by its members to provide credit at competitive rates. In other words, a credit union is a not-for-profit organization owned by their own customers that offers banking services to its members. Although similar to commercial or retail banks, credit unions differ in that the members share common characteristics like the location of where they live, what occupation they have, and where they work.

Savings Banks: Savings banks provide a place for people to save their money and accrue interest on their money over time

Savings and Loans: Savings and loan associations specialize in accepting savings, deposits, and making mortgage and other loans.

Online banks: Online banks operate entirely online and do not offer physical brick and mortar locations for you to manage your finances at. These are becoming more popular as our world becomes more digitized.

Mutual Banks: Mutual banks are similar to credit unions in that they are owned by the members or customers instead of outside investors.

Central Banks: The central bank is the big dog that manages the monetary system of the government. The Federal Reserve (central bank) is responsible for managing economic activity and supervising banks. You will understand how they do this when you learn how banks function in the next section!

According to some specialists, US banking system is stable, due to the continuing growth in the domestic economy and the banks’ strong liquidity profiles.

For anyone considering a career in banking in the USA, this list of top banks in the USA is a helpful guide on where to start.

 The top banks in the USA are:

JP Morgan Chase & Co

JP Morgan Bank Chase & Co is the largest banking group in the US. It is headquartered in New York and employs 250,000 staff worldwide. 

Bank of America Corp

Bank of America is one of the largest lender banks in the USA, headquartered in Charlotte, North Carolina. 

Wells Fargo & Co

Headquartered in San Francisco, Wells Fargo & Co is a diversified financial services company. The bank employs 268,800 individuals.

Citigroup Inc.

Citigroup is a multinational investment banking and financial services company headquartered in New York City. It employs around 219,000 staff and is present in 19 countries through 2,649 branches. 

Goldman Sachs Group Inc.

It is headquartered in New York and employs 34,400 staff. 

Morgan Stanley

Morgan Stanley is a global financial services firm providing investment banking, securities, wealth management, and investment management services. It employs approximately 56,000 staff. 

US Bancorp

US Bancorp is headquartered in Minneapolis and employs around 71,000 individuals. 

PNC Financial Services Group Inc.

PNC Financial Services is based in Pittsburgh and employs around 49,000 staff. 

TD Group US Holdings LLC

TD Group US Holdings is headquartered in New Jersey and employs around 26,000 people. 

Capital One Financial Corp

Based in Virginia, Capital One Financial is a diversified financial services holding company among banks in the USA. 

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