The majority of our lives usually revolve around money, daily expenses, and earning money for our needs and wants. This is one of the main reasons financial management is crucial to a more secure and stable life. However, not many individuals are sure about how they should manage their finances. This has led to the majority of the population needlessly taking up loans and making trivial financial decisions.
In the past year, many individuals have been emphasizing saving money and making better financial decisions. But to safely secure funds, many individuals need to place their money on bank accounts.
There are two types of banking accounts that most individuals can utilize. Personal banking (sometimes known as retail banking) and corporate banking are the most common options available to the public. But since many individuals have their own long-term and short-term financial goals, not everyone has the same financial habits.
So what are some key considerations when you’re choosing between a personal or a business banking account? What are some advantages and shortcomings for each one? Let’s answer questions regarding this matter.
What Are Some Key Differences?
But before weighing in some advantages and shortcomings for each banking account, let’s first look at some key differences. As the name suggests, retail banking usually refers to a branch of the bank that directly deals with customers and their issues. On the other hand, corporate banking deals with businesses and corporate entities.
In most cases, retail banking is one of the most prevalent types available to the public. On the other hand, corporate banking refers to businesses providing business loans, savings accounts, credit, and, most importantly, checking accounts. Many of the options for corporate banking usually focuses on business organizations and companies rather than individuals.
So what are some main features of these two banking options that you need to consider? Here’s what to know.
Retail or personal banking is one of the most common financial services that banks offer. This aspect of the banking industry allows retail consumers to manage their funds while also giving them access to various banking services and financial advisories.
In most cases, retail banking has a variety of services and products available to the majority of the public. This can include the following:
- Property loans
- Automobile loans
- Credit carts
- Exchanging local and foreign currencies
- Certificates of deposits
One of the most popular services comes in the form of remittance services. Usually, people who are working overseas can use remittance to send money to relatives and colleagues. But it’s not just banks that have remittance services. Many logistical companies also offer this service since it’s a straightforward way of sending money, especially when needed.
For instance, you’re from the Philippines, and you have a loved one in Taiwan who needs financial assistance. Are you looking for fast and reliable remittance services to help you? Learn how you can send money from the Philippines to Taiwan. Not only does this cut down on time needed to send money, but you also don’t have to go through various obstacles to complete the task.
As the name suggests, business banking is explicitly designed for corporations and organizations. In most cases, this deals with small-to-medium enterprises that have around millions of dollars in revenue. But many multi-billion corporations also utilize business banking across different countries.
Commercial banking usually offers the following services to numerous SMEs and corporations:
- Business loans and credit products
- Lending equipment
- Trade finance
- Commercial real estate
However, it’s important to note that organizations’ services also depend on their financial situation.
Which One Is for You?
So what’s the most optimal banking solution for you? This is ultimately determined by your financial situation, your earnings, the nature of your work, and your monthly expenditure. It’s crucial to be aware that certain banks have their own fees. You should consider the service that you only need. Effectively plan out your finances can ensure that you’re in a stable situation in life.
You might plan on setting aside money for your personal savings account or using your bank account for your business needs. Whatever you do, it’s essential that you first weigh in your earnings, expenditure, and lifestyle. For instance, if you’re using your bank account solely for personal needs, you don’t need a corporate banking account and vice versa.
Still, it’s crucial to keep in mind that key financial management means that you need to be mindful of your spending. Being disciplined with your lifestyle and spending habits can go a long way.