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. Subsidiary Bank

    A type of foreign bank that is incorporated in the host country ...
  6. Bank Insurance

    A guarantee by the Federal Deposit Insurance Corporation (FDIC) ...
RELATED FAQS
  1. What net interest margin is typical for a bank?

    In the United States, the average net interest margin for banks was 3.03% in the first quarter of 2015. However, this was ... Read Full Answer >>
  2. What are the main benchmarks that track the banking sector?

    The appropriate benchmarks for tracking banking sector performance depend on the type of banking. For instance, commercial-only ... Read Full Answer >>
  3. What are the major categories of financial institutions and what are their primary ...

    In today's financial services marketplace, a financial institution exists to provide a wide variety of deposit, lending and ... Read Full Answer >>
  4. What is the difference between an investment and a retail bank?

    The activities and types of clients for an investment bank versus those for a retail bank highlight the primary difference ... Read Full Answer >>
  5. Is the banking sector subject to any seasonal trends?

    The banking industry, including retail and investment banks, is subject to seasonal trends. Seasonality is most commonly ... Read Full Answer >>
  6. What are some of the well-known no-load funds?

    The capital adequacy ratio promotes stability and efficiency of worldwide financial systems and banks. The capital to risk-weighted ... Read Full Answer >>
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

    Bank Lingo: Routing Number Vs. Account Number

    Each consumer bank account has its own personal ID. And so does the bank. How do these numbers function and how do they protect the account holder?
  6. Savings

    5 Things to Look for in a Private Banker

    When putting all your assets into one private banker basket, it pays to proceed with caution.
  7. Investing

    Do You Need A Private Banker?

    They offer well-heeled clients unparalleled convenience, but could be prone to certain conflicts of interest.
  8. Credit & Loans

    What is a Financial Institution?

    A financial institution is in business to, among other things, accept deposits, make loans, exchange currencies, and broker investment securities.
  9. Investing

    Which Are the World's 10 Largest Private Banks?

    Most of the largest private banking providers in the world are headquartered in Europe or the United States.
  10. Savings

    Checking Account Reviews: Chase Premium Platinum

    Which perks and services come with Premier Platinum and is it worth the cost to you?

You May Also Like

Hot Definitions
  1. Multicurrency Note Facility

    A credit facility that finances short- to medium-term Euro notes. Multicurrency note facilities are denominated in many currencies. ...
  2. National Currency

    The currency or legal tender issued by a nation's central bank or monetary authority. The national currency of a nation is ...
  3. Treasury Yield

    The return on investment, expressed as a percentage, on the debt obligations of the U.S. government. Treasuries are considered ...
  4. Bund

    A bond issued by Germany's federal government, or the German word for "bond." Bunds are the German equivalent of U.S. Treasury ...
  5. European Central Bank - ECB

    The central bank responsible for the monetary system of the European Union (EU) and the euro currency. The bank was formed ...
  6. Quantitative Easing

    An unconventional monetary policy in which a central bank purchases private sector financial assets in order to lower interest ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!