Niche Banks

AAA

DEFINITION of 'Niche Banks'

Banks that cater to and serve the needs of a certain demographic segment of the population. Niche banks typically target a specific market or type of customer, and tailor a bank's advertising, product mix and operations to this target market's preferences.

INVESTOPEDIA EXPLAINS 'Niche Banks'

A good example of a niche bank is the Golf Savings Bank, which sponsors golf tournaments and offers up to $10,000 for PGA members who score a hole in one and have a specific account at the bank.

Other good examples of niche banks include Reid Temple AME Church Federal Credit Union, which has convenient hours before and after church on Sundays, and BowieBanc, which offered an ATM card with a picture of David Bowie before it shut down.

If considering a niche bank, it is important to make sure it is FDIC insured, and to ensure that it is a separately chartered entity and not affiliated with a bank where you might already have deposits. This is because the FDIC generally limits deposit insurance to $100,000 per person per chartered institution.

RELATED TERMS
  1. Non-Banking Financial Company - ...

    Non-banking financial companies, or NBFCs, are financial institutions ...
  2. Federal Deposit Insurance Corporation ...

    The U.S. corporation insuring deposits in the U.S. against bank ...
  3. Chartered Bank

    A financial institution whose primary roles are to accept and ...
  4. Bank

    A financial institution licensed as a receiver of deposits. There ...
  5. Bank Insurance

    A guarantee by the Federal Deposit Insurance Corporation (FDIC) ...
  6. Subsidiary Bank

    A type of foreign bank that is incorporated in the host country ...
Related Articles
  1. Fundamental Analysis

    Analyzing A Bank's Financial Statements

    A careful review of a bank's financial statements can help you identify key factors in a potential investment.
  2. Savings

    Are Your Bank Deposits Insured?

    Learn how the FDIC is helping to keep your money in your pockets.
  3. Insurance

    Your First Checking Account

    This owner's manual will show you what to expect from your bank.
  4. Options & Futures

    How To Break Up With Your Bank

    Whether you're moving or have just found a better no-fee plan, find out how to switch banks with ease.
  5. Savings

    How Foreign Transaction Fees Work

    Using a credit card when you travel can be costly. Here's what you need to know about foreign transaction fees – plus tips on making purchases abroad.
  6. Savings

    Where To Get A Mortgage If You Have Bad Credit

    Here's where to go if you have a low credit score and still want a mortgage.
  7. Credit & Loans

    5 Ways To Get The Best Mortgage Rates

    A mortgage is the biggest loan most people have. Be sure you get the best possible terms – you'll be paying it off for years.
  8. Savings

    Picking A Lender: Quicken Loans Or A Local Bank?

    Online mortgage lender Quicken Loans has become known for its convenience and customer service. But brick-and-mortar banks offer benefits of their own.
  9. Savings

    Quicken Loans Vs. Other Mortgage Sources

    By allowing customers to initiate and manage the mortgage process online, Quicken Loans may appeal to borrowers who value convenience.
  10. Investing Basics

    An Investor's Guide To Bank Stress-Testing

    Just how are bank stress tests performed and what is the logic behind them? And is a stress test useful for evaluating a bank's stock?

You May Also Like

Hot Definitions
  1. Portfolio Turnover

    A measure of how frequently assets within a fund are bought and sold by the managers. Portfolio turnover is calculated by ...
  2. Commercial Paper

    An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories ...
  3. Federal Funds Rate

    The interest rate at which a depository institution lends funds maintained at the Federal Reserve to another depository institution ...
  4. Fixed Asset

    A long-term tangible piece of property that a firm owns and uses in the production of its income and is not expected to be ...
  5. Break-Even Analysis

    An analysis to determine the point at which revenue received equals the costs associated with receiving the revenue. Break-even ...
  6. Key Performance Indicators - KPI

    A set of quantifiable measures that a company or industry uses to gauge or compare performance in terms of meeting their ...
Trading Center