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. Interbank Deposits

    Any deposit that is held by one bank for another bank. In most ...
  3. Bank Run

    A situation that occurs when a large number of bank or other ...
  4. Cash Concentration And Disbursement ...

    A type of electronic payment used to transfer funds between remote ...
  5. Limited Service Bank

    Any type of banking business facility that is located separately ...
  6. Bankers' Bank

    A special type of bank that is created by a group of banks. Bankers' ...
Related Articles
  1. Investing

    What is a Bank?

    A bank is a financial institution licensed to receive deposits or issue new securities to the public.
  2. 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.
  3. 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.
  4. Financial Advisor

    Why Banks Don't Need Your Money to Make Loans

    Contrary to the story told in most economics textbooks, banks don't need your money to make loans, but they do want it to make those loans more profitable.
  5. Tech

    The Pros And Cons Of Internet Banks

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

    What is Fractional Reserve Banking?

    Fractional reserve banking is the banking system most countries use today.
  7. Financial Advisor

    Portfolio Concentration: Why You Should Watch It

    Overconcentration in a specific position or sector can lead to disaster.
RELATED FAQS
  1. What developed countries have the highest concentration in the banking sector?

    Learn about the developed countries that have the greatest concentration in the banking sector and the most important emerging ... Read Answer >>
  2. What economic indicators are important to consider when investing in the banking ...

    Find out which economic indicators are most useful for investors in the banking sector, especially those influenced by central ... 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. How does the deposit multiplier affect a bank's profitability?

    Find out how a deposit multiplier affects bank profitability, how it increases the supply of money in the economy and why ... Read Answer >>
  5. What does it mean to invest in money center banks?

    Invest in foreign and domestic banks when you invest in money center banks. You'll find these financial centers in many major ... Read Answer >>
  6. What proportion of the global economy is comprised of banks?

    Read about the size and scope of the global banking sector, its importance and why it should continue to form a sizable portion ... Read Answer >>
Trading Center