Commercial banks in the United States fall into three broad size tiers, and the clearest way to see what a commercial bank is is to look at examples from each. At the top sit the eight Global Systemically Important Banks, including JPMorgan Chase, Bank of America, and Wells Fargo. Below them are regional banks that cover several states or a major metro area. At the base are community banks, which make up most U.S. bank charters by count and serve a single city, county, or rural area. All of them share the same defining authority: a charter, from either a state government or the federal Office of the Comptroller of the Currency, that lets them take deposits from the public and lend that money out.1Partnership for Progress. De Novo Bank Application Process
There are roughly 4,000 FDIC-insured commercial banks in the country. What separates the examples below is not what they are allowed to do but the scale at which they do it, the customers they focus on, and how they combine banking with other financial services.
The Three Tiers of Commercial Banks
Every commercial bank is a shareholder-owned, for-profit corporation supervised by a federal regulator and required to hold capital buffers that absorb losses before depositors are affected.2Board of Governors of the Federal Reserve System. How Can I Start a Bank? A national charter comes from the OCC and makes the bank a Federal Reserve System member automatically. A state charter comes from a state banking department, with either the FDIC or the Federal Reserve as the primary federal supervisor depending on Fed membership.1Partnership for Progress. De Novo Bank Application Process
Within that shared framework, the examples split neatly by size and reach.
Global Systemically Important Banks
The Federal Reserve designates the largest U.S. commercial banks as Global Systemically Important Banks, or G-SIBs, subjecting them to the highest capital, liquidity, and stress-testing requirements because their failure could destabilize the broader financial system.3Federal Reserve Board. Global Systemically Important Banks The current list has eight names:
- JPMorgan Chase
- Bank of America
- Citigroup
- Wells Fargo
- Goldman Sachs
- Morgan Stanley
- Bank of New York Mellon
- State Street
JPMorgan Chase is the largest by assets at roughly $4 trillion and illustrates what is often called the universal bank model: a massive consumer and commercial banking operation running alongside one of the world’s largest investment banking divisions.4JPMorgan Chase & Co. Annual Report Bank of America pairs the nation’s largest commercial and industrial lending operation with a full-service investment bank. These institutions serve everyone from individual checking account holders to sovereign governments.
The universal bank structure exists because the Gramm-Leach-Bliley Act of 1999 repealed most of the Glass-Steagall wall that had separated commercial and investment banking since 1933, letting bank holding companies own both under a single corporate umbrella.5Office of the Comptroller of the Currency. The Repeal of Glass-Steagall and the Advent of Broad Banking The repeal was not total. The commercial bank subsidiary still cannot underwrite and deal in most securities directly, and the broker-dealer subsidiary still cannot accept deposits. The two businesses simply live under one parent.6Congress.gov. The Glass-Steagall Act: A Legal and Policy Analysis
Regional Banks
Regional banks operate across several states or a large metropolitan area without a global footprint. They offer the full range of retail and commercial products and tend to compete hardest for middle-market business clients, where a more personal lending relationship matters. A mid-sized company that needs a $10 million credit facility and a banker who picks up the phone is often better served by a regional than by a G-SIB.
Regional banks hold state or national charters like their larger and smaller counterparts, and their customers get the same FDIC deposit insurance. What differentiates them is the middle position: broader reach and product depth than a community bank, but a scale and structure that keeps lending decisions closer to the client.
Community Banks
Community banks are the smallest tier, focused on a specific city, county, or rural area. They make up the majority of U.S. commercial 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 decline. For many rural communities, the local community bank is the only meaningful source of credit for small businesses and agricultural operations.
Institutions That Look Like Commercial Banks but Aren’t
Several deposit-taking or loan-making institutions get lumped in with commercial banks, and the distinctions affect what you get and how you’re protected.
Credit Unions
Credit unions offer checking accounts, savings accounts, and loans that look nearly identical to a commercial bank’s products, but the ownership is different. A credit union is a not-for-profit cooperative owned by its members, so the depositors are the owners.7National Credit Union Administration. Overview of Federal Credit Unions With no outside shareholders demanding a return, credit unions can often pay higher rates on deposits and charge less on loans. The tradeoff is access: membership is usually limited to a specific employer, geographic area, or association, and branch networks and digital platforms are typically smaller than what a commercial bank offers.8MyCreditUnion.gov. What Is a Credit Union?
Savings and Loan Associations
Savings and loan associations, also called thrifts, were originally chartered to promote homeownership, and their portfolios were historically concentrated almost entirely in residential mortgages. Commercial banks have always held far more diversified assets: commercial real estate loans, business credit lines, and large positions in government securities. The lines have blurred as thrifts gained broader lending powers, but the legacy difference is scope. A thrift was built around the mortgage; a commercial bank was built around the full spectrum of credit.
Investment Banks
A pure investment bank does not take deposits. It underwrites stock and bond offerings, advises on mergers and acquisitions, and runs trading desks. In today’s universal banks, the investment banking business sits inside the same holding company as the commercial bank but operates as a separate subsidiary under SEC oversight.9Securities and Exchange Commission. Supervised Investment Bank Holding Companies Goldman Sachs and Morgan Stanley appear on the G-SIB list because they converted to bank holding companies and now run commercial banking operations alongside their traditional investment banking work.
Neobanks and Fintech Platforms
Neobanks are digital-only platforms with no branches, typically offering checking and savings products with lower fees and higher rates than traditional banks. The critical detail: a neobank is usually not itself a bank. It is a technology company partnered with an FDIC-insured commercial bank that actually holds the deposits, an arrangement often called Banking as a Service. Your money is protected only when it sits at the chartered partner bank. If the neobank itself fails or mismanages the relationship, recovering funds can be complicated. Before opening an account, find out which FDIC-insured bank stands behind it.
What to Check Before Choosing a Commercial Bank
Whichever tier you’re looking at, confirm the bank is FDIC-insured. Every deposit at an insured commercial bank is protected up to $250,000 per depositor, per ownership category, at each insured bank.10FDIC. Understanding Deposit Insurance That covers checking, savings, CDs, and money market deposit accounts. Because ownership categories are separate, an individual account and a joint account at the same bank each carry their own $250,000 limit, and coverage can be extended further across categories like revocable trusts and retirement accounts.
What FDIC insurance does not cover surprises people. Investment products sold at the bank, including stocks, bonds, mutual funds, annuities, and life insurance, are not insured, even if a bank employee sold them to you.11FDIC. Financial Products That Are Not Insured by the FDIC Safe deposit box contents are also uninsured. The FDIC seal protects your deposits, not everything a bank sells you.