What Is a Regional Bank?

If you are thinking of opening up a checking account, or a savings account, you will likely come across a regional bank. A regional bank is a type of bank that is located within specific parts of the country and operates on a smaller level than a national bank. Although only available in certain areas, these depository institutions will serve people throughout the state in which they have a branch location. Neighboring states often have regional bank branches to serve locals—so regional banks can operate in more than one state.

Are you interested in learning more about regional banks or thinking of doing business with one? Keep reading for everything you need to know about regional banks, their pros and cons, and similar institutions you can turn to, to store your money. 

Digging a Little Deeper Into What a Regional Bank Is

So, now that you have a fundamental understanding of what regional banks are, it will be helpful to dig a little deeper. 

As the name suggests, regional banks are located in a specific region within the United States. For example, you will find regional banks situated in the Midwest, Pacific Northwest, on the East Coast, West Coast, etc. You might notice these branches/companies if you are traveling from coast to coast or region to region.

To be considered a regional bank by the Federal Reserve (the central banking system of the United States, which regulates depository institutions), an institution must have between $10 and $100 billion in total assets. All regional banks are FDIC insured, up to $250,000 (which is the standard with FDIC insurance), so you don’t have to really worry about technicalities any further than that, but it doesn’t hurt to know about what constitutes a regional bank. 

One example of a regional bank is Fifth Third Bank. They have branch locations all over Illinois, Michigan, and Ohio, along with some in the Southeast of the United States. Other regional banks include BMO Harris Bank, Capital One Bank, and TD Bank. You may be a little surprised to see such prominent companies as regional banks, but it is important to remember that regional doesn’t necessarily mean small! In fact, many regional banks are some of the largest nationwide! Although you can definitely find a smaller or a mid-sized financial institution that operates as a regional bank, if you wanted to. 

What Services Can I Expect from Regional Banks?

No matter how big or small your regional bank is, rest assured that you will likely find all of the basic banking service offerings you would expect from financial institutions that operate as banks. Here are some of the services you can expect: 

  • Your basic deposit accounts, savings, checking, and money market accounts.
  • Credit card options. 
  • ATM networks. 
  • Insurance. 
  • Loan options, including mortgages, (interest rates with bank loans will vary).
  • Basic investment options.
  • Mobile apps and mobile banking. 

Some Advantages and Disadvantages of Regional Banks

Below are some of the pros and cons you can expect when working with a regional bank: 

Advantages of Regional Bank

Regional banks are more likely to offer a broader range of ATM networks than other bank types, which can be highly convenient. And because they are centralized in an area, they may participate more in the community and have offers catered to their patrons. You’ll likely find fewer fees with regional banks than with national ones.  

Regional Bank Disadvantages

Regional banks may not be the most convenient option if you travel a lot nationally, as it may be difficult or impossible to find branches or in-network ATMs in an area they do not serve. Additionally, a national bank will have more products and services to offer if you are trying to focus on things like investing. 

So, What Are Some Major Differences Between Community, Regional, and National Banks?

When researching banks, you may encounter a few major types: regional, community, and national. Now that you know a little more about regional banks let’s compare them to national and community. 

National Banks

National banks are the type of banks that operate all over the United States. They must follow specific guidelines to maintain this title and the different abilities that come with it. Along with strict guidelines, these banks pay premium fees to the FDIC to keep their titles. National banks are some of the largest depository institutions in the United States; a few examples include Chase Bank, Citibank, and Bank of America. 

When it comes to how national banks vs. regional banks will impact you, national banks are the only ones that can help you with the auction of U.S. Treasury bonds.

Community Banks

Community banks are the most charming of the group for sure; they are the smallest kind of depository institutions you’ll find. A community bank only serves a small area and is designed to help local communities. Because of how they operate, community banks may be able to look out for their customers a little better and have lower interest rates on loans and products than a larger bank. If you want to build a relationship with your banker, community banks are the place. Rest assured that most of these banks are usually insured as well. 

What Other Kinds of Depository Institutions Exist In the United States?

Here are some other kinds of depository institutions you’ll find in the United States; some of these are banks, and others are not: 

Savings Banks

A savings bank focuses on providing its customers with savings account services primarily. With these banks, you’ll find different return options and financial products that focus on short-term and long-term savings goals. You don’t need to bank with a savings bank, to focus on saving money! Having an adequate safety net can help you avoid expensive loan options like payday loans online, which come with many fees and high-interest rates.

Credit Unions

There are some major differences between banks and credit unions. Credit unions are nonprofit organizations that focus on serving their members. To be a part of a credit union, you may have to live in a particular area and fulfill some requirements. If you can join a credit union, you may save a good amount on bank fees. 

Investment Banks

Kind of like savings banks that focus on savings accounts and products, investment banks focus on wealth management and investment products. If you want to build wealth, these banks may offer the best rates and products out there. 

Online Banks

Online banks do not have a brick-and-mortar location like many depository institutions listed above. The great thing about these banks is that they pass their savings from operating online to their customers. You’ll find fewer fees and sometimes more return in savings with online accounts. Online banks are sometimes referred to as Neobanks, and some of them will allow their customers to trade cryptocurrency.

To answer more banking questions, like “what is spreading in banking?” then check out the rest of the CreditNinja Dojo blog!


Federal Reserve Board – Community & Regional Financial Institutions
The Structure and Functions of the Federal Reserve System
Regional bank Definition | Nasdaq

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