If you have a bank account, then you probably visit the bank for your transaction needs or access your account through internet banking. Have you ever wondered what the difference is between personal and corporate banking? If yes, this article will help you understand exactly what you need.
Firstly, let us talk about personal banking. Personal banking refers to the bank activities that are related to an individual person or joint account holders. This is for retail customers where a sole person is responsible for the running and maintenance of this banking account, which is usually a savings account. Alternatively, this type of banking can also be referred to as consumer banking. An example for personal banking would be highlighted by simply a person (who is not a minor) opening a savings account in a bank for his/her financial needs and accordingly operating this account for money transactions, transfers, investments or any other banking need.
Next, let’s move on to understanding the meaning of corporate banking. As the name suggests, banking activities carried out by the corporates, i.e., companies, organizations, industries, conglomerates, etc. can be termed as corporate banking. Example: When a company ABC opens a bank account for its business purpose, it is termed as corporate banking.
The facilities and features of personal and corporate banking vary significantly. Now that we know what exactly is personal and corporate banking, enlisted, below are a few major points of difference between these two:
Since personal banking caters to individuals, these accounts are mostly of savings type and either operated single-handedly by an individual or jointly, in case of a joint account. Businesses usually have a current account for corporate banking.
Even though both these banking types now provide greater ease of access and handling, by nature, corporate banking may be more complex and dynamic than personal banking.
The banking services offered for both personal and corporate banking are lucrative and beneficial in nature. However, corporates get a lot more than usual. Corporate banking offers tailor-made services to fit the business needs of these clients and can also accordingly customize these based on business requirements. Personal banking offerings, on the other hand, are great but are standard and set in nature and are not usually customized as per an individual’s needs.
Transaction capacity and amount
The transaction limits are way higher for corporate banking than in personal banking. Corporates have a higher amount of day-to-day transactions with huge cash deposits and withdrawals. A higher limit is therefore needed in corporate banking as opposed to the personal one.
Corporate banking enables businesses to get loans that have a higher amount than the loans needed by individuals for personal banking.
Corporate banking has lower interest rates than personal banking, which is helpful for taking loans of significant amounts.
Corporates can have access to a lot of waivers, overdraft, and demand-draft facilities, higher amounts of issued cheque books, ease of foreign trade, etc. While benefits are available in both these types of banking, a corporate may have a host of many other benefits and specialized services due to the nature and need of a business.
Even if they are different in nature and purpose, both personal and corporate banking are now easy to understand and carry out. All thanks to internet banking and the online options available from our devices which are hassle-free and one does not need to always visit a bank.
Disclaimer: The above article is subjective and generic in nature. The point of differences differs from bank to bank