A commercial bank serves business clients handling large deposits and commercial banking loans. Bank of America, Wells Fargo, Wachovia and US Bank are all examples of some of the nation's largest commercial banks.

Commercial banks offer many services to businesses of all sizes including capital raising, market making, and financial advisory products and services. Most commercial banks also serve private individuals and can offer state-of-the-art technology for online banking and accounting software tools. While commercial banks can offer competitive rates for investment and savings accounts, there are many competitive options for consumers that aren't limited to commercial banks. To get the most competitive banking rates, compare services from other types of banks including private banks, credit unions and branchless banks, also known as online banks.

Businesses utilize commercial banks to rent banking equipment and payment systems that can process merchant transactions on ATM, credit and debit cards. Business who use commercial banks include manufacturing, distribution, wholesale, import/export, trucking/transportation, seafood, and service-based companies.

Another valuable aspect of commercial banks is their ability to offer customized accounts receivable loans which enable businesses to manage their cash flow. An accounts receivable solution from a commercial bank sets purchase limits on receivables owed by each of regular customers in proportion to their potential credit risk. Once the paperwork is process for a certain customer, the commercial bank can advance cash the business nearly 90% of the invoice amount.

Most commercial banks also offer corporations different types of insurance to cover their assets and liabilities. Because protecting a business' cash flow is in their best interest, commercial banks offer insurance that protects businesses from a myriad of losses including burglary and theft, accidental damage, fire, vandalism, lightning, equipment breakdown and operator errors.

Many commercial banks are branch members of the Federal Reserve System, referred to as the Fed, the U.S. Constitution gives the government power to operate a federal bank. The Fed oversees 12 Federal Reserve Banks which, in turn, regulate banks in their districts and ensure they maintain adequate reserves.

In order for a commercial bank to become a member of the Federal Reserve System, it must purchase stock from its Reserve Bank in an amount equal to 3 percent of its combined capital and surplus. Once it purchases stock, the commercial bank receives a 6 percent annual dividend and the right to vote in elections of directors of its Reserve Bank.

Commercial banks provide the Fed with invaluable cash streams which enable it to impact the world's economy and provide consumer confidence. The Fed issues currency, buys and sells government securities to regulate the money supply and trades on the world market to support the US dollar's value. The Fed also stores gold for foreign governments and international agencies.