What is one type of a primary bank?

A retail bank is a type of primary bank that primarily deals directly with consumers and small businesses, providing fundamental banking services like savings accounts, checking accounts, loans, and credit cards. Retail banks focus on personal finance and the everyday financial needs of the general public, making them accessible and essential for individual banking activities.

In contrast, investment banks primarily engage in larger financial transactions, such as underwriting new debt and equity securities, facilitating mergers and acquisitions, and providing advisory services for corporate clients. Hedge funds operate as investment funds that pool capital from accredited individuals or institutional investors to invest in a variety of assets, and they do not typically serve the retail market. Insurance companies focus on providing risk management through insurance policies and are not classified as banks. Therefore, retail banks serve a foundational role in the banking system, making them a prime example of a primary bank.