DEFINITION of 'Concentration Bank'

A financial institution that is the primary bank of an organization, or the bank where the organization does most of its transactions. Several organizations use multiple banks, but generally deal significantly with one bank in particular, which is referred to as the concentration bank.

BREAKING DOWN 'Concentration Bank'

An example of a concentration bank can be a company which has multiple chain stores across the country and each store deposits its cash into local banks. The company can set it up so that these funds can be concentrated or deposited into one account, usually called a concentration account, at a concentration bank.

RELATED TERMS
  1. Concentration Account

    A deposit account used to aggregate funds from several locations ...
  2. Concentration Ratio

    In economics, a ratio that indicates the relative size of firms ...
  3. Bank

    A financial institution licensed as a receiver of deposits. There ...
  4. Limited Service Bank

    Any type of banking business facility that is located separately ...
  5. National Bank

    In the United States, a commercial bank chartered by the comptroller ...
  6. Cash Concentration And Disbursement ...

    A type of electronic payment used to transfer funds between remote ...
Related Articles
  1. Financial Advisor

    Concentrated Funds: Here's What to Know

    Concentrated funds can help clients achieve returns with a smaller base of diversification than traditional funds. Here's what you should know about them.
  2. Personal Finance

    Retail Banking Vs. Corporate Banking

    Retail banking is the visible face of banking to the general public. Corporate banking, also known as business banking, refers to the aspect of banking that deals with corporate customers.
  3. Investing

    What is a Bank?

    A bank is a financial institution licensed to receive deposits or issue new securities to the public.
  4. Personal Finance

    Banking Has Changed: What Does It Mean For Consumers?

    Banks have long been leading spenders on technological innovations. Learn the key changes in the banking industry and what institution is right for you.
  5. Insights

    A Brief History of U.S. Banking Regulation

    From the establishment of the First Bank of the United States to Dodd-Frank, American banking regulation has followed the path of a swinging pendulum.
  6. Investing

    What's a Correspondent Bank?

    A correspondent bank is a bank that acts on behalf of another bank, usually a foreign bank.
  7. Tech

    The Pros And Cons Of Internet Banks

    Learn how internet banking services stack up against those of their brick-and-mortar peers.
  8. Personal Finance

    What is Fractional Reserve Banking?

    Fractional reserve banking is the banking system most countries use today.
  9. Personal Finance

    Why the Fed Says Banking Functions Are Too Complex (JPM, BAC)

    Discover why the Federal Reserve may raise capital requirements for America's largest banks or move to limit complex derivative contracts.
RELATED FAQS
  1. How does investment banking differ from commercial banking?

    Discover how investment banking differs from commercial banking, the responsibilities of each and how the two can be combined ... Read Answer >>
  2. What is the average profit margin for a company in the banking sector?

    Learn what the average profit margin is for companies in the banking sector, along with other evaluation metrics often used ... Read Answer >>
  3. What is the difference between an investment and a retail bank?

    Learn the primary differences between retail banks and investment banks by examining the business activities, type of clients ... Read Answer >>
  4. What are the major categories of financial institutions and what are their primary ...

    Understand the various types of financial institutions that exist in today's economy, and learn the purpose each serves in ... Read Answer >>
  5. What's the difference between investment banks and commercial banks?

    Understand the principal differences between investment banks and commercial banks, and the areas of banking services that ... Read Answer >>
Trading Center