Banking can be a lucrative career for anyone in the business and entrepreneurship career community. However, there are many different types of financial institutions, each serving their clients in different ways and working in different areas of finance. Unsure on what kinds of customers you want to serve or what aspect of finance you want to work with? Here are some types of banks and organizations to help you see which one interests you the most.
Traditional Banks: Consumers deposit funds in checking and saving accounts. Most big banks in America like Wells Fargo, JP Morgan Chase, and Bank of America fit into this description. These banks are regulated by the Federal Deposit Insurance Corporation (FDIC) which insures deposits in banks against losses in bank failures to maintain economic stability.
Commercial Bank: They offer services to both personal consumers and businesses by making short-term loans to both groups. There is a lot of overlap between traditional and commercial banks as many of the traditional banks mentioned above operate as commercial ones by giving out loans.
Credit Unions: Credit Unions have members who can borrow from a credit union’s combined deposits at a low interest rate. They are typically non-profit and members are their shareholders. The National Credit Union Administration (NCUA) regulates and supervises federal credit unions.
Investment Banks: These types of banks help companies determine how much they should pay when buying another company, new ways to invest their profits, or advise companies on borrowing money. They also advise clients on selling stocks and bonds.
The Federal Reserve: The Federal Reserve or the Fed regulates banks and determines monetary policies to stabilize inflation, reduce unemployment and moderate long term interest rates. If you’re interested in working at the policy level when it comes to finance, working for the Fed could be an option.
Micro Credit: Typically, micro credit or micro loans are small loans given to people who don’t have collateral or a lot of money to pay back huge sums or interest. These loans are often used to encourage entrepreneurship and help people out of poverty. If you’re someone who is interested in combining your interest in finance with economic development, micro credit could be an interesting field for you.
Online/Virtual Banks: Banks that operate exclusively online and don’t have branches.
Raisa Fatima ’23 is a Physics major with interests in research and engineering. She enjoys painting, reading and playing games like Stardew Valley in her spare time. Raisa works as a Career Peer Educator for the BE and PHN career communities so if you’re interested in anything PHN or BE related, or you just need some general advice on anything professional development related like resumes, cover letter etc. you can schedule an appointment here.