- Deposit, in which money or items of value are kept secure and can accrue interest
- Withdrawal, in which an individual takes possession of all or a portion of his finances, or authorizes a third party to do so
- Transaction, in which the bank stands as guarantor for an impending withdrawal (i.e. a cashier's or traveler's check)
- Loans, in which the bank grants a customer access to money in exchange for certain terms of repayment.
There also exist investment banks that assist corporations in raising and managing capital. However, these services are usually considered to be distinct from those of commercial banks.
Bank Deposits
Money is routinely deposited by individuals in order to ensure its safety and easy access, and to take advantage of interest accrual. Interest is a payment made by the bank to the customer for allowing the bank access to his or her deposit. Banks routinely use this deposited money to give out loans by which they yield profits, and the interest payment is the portion that is returned to the customer from this process--it is essentially repayment on a loan the customer has made to the bank. In addition to money, customers may deposit physical items into a bank to be held in a safety deposit box. These may be items, such as jewelry, that are in themselves precious, or simply items of sentimental value.
Deposited money can be withdrawn by the customer, or a person or organization of the individual's choice. A person can indicate his authorization for a third-party withdrawal by means of a check, a physical or electronic debit that includes the check-writer's identification, account information, and the amount he or she is permitting to be withdrawn. This provides a convenient method of making transactions without necessitating the use of physical money. Most modern transactions are made without the actual exchange of bills or coins, and the vast majority of banking resources consist of theoretical money that does not actually exist as hard cash.
Cashiers and Travelers Checks
Cashiers checks and travelers checks are provided by banks for certain transactions. They serve to ensure the check's recipient that a monetary transaction will be honored by allowing the funds to be drawn directly from the bank itself. The individual handing out the check pays the bank for this service beforehand.
Bank Loans
Banks also provide services for loans. These can range from short-term loans, usually for small amounts—as is the case with credit cards that allow the user to initiate a loan at any time and pay it off after a brief period—to loans that may last the duration of an individual's life. It is likewise the case with mortgages, or loans for large amounts of money that assist the individual in the purchase of a home to which the bank retains legal title until the loan is paid. Banks make much of their profits through the interest repaid on these loans.
