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.

BREAKING DOWN '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. Bank Insurance

    A guarantee by the Federal Deposit Insurance Corporation (FDIC) ...
  2. Bridge Bank

    A bank authorized to hold the assets and liabilities of another ...
  3. Bank

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

    A financial institution that has been chartered by a state to ...
  5. Limited Service Bank

    Any type of banking business facility that is located separately ...
  6. Insured Financial Institution

    Any bank or savings institution that is covered by some form ...
Related Articles
  1. Financial Advisor

    Why Focusing on One Niche Can Hurt Financial Advisors

    Niche marketing can be extremely lucrative, but it also comes with some drawbacks that financial advisors should be aware of.
  2. Personal Finance

    The History Of The FDIC

    Find out why this corporation was developed and how it protects depositors from bank failure.
  3. 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.
  4. Insurance

    Federal Deposit Insurance Corporation (FDIC)

    The Federal Deposit Insurance Corporation (FDIC) insures deposits in banks and thrift institutions.
  5. Investing

    Who Backs Up The FDIC?

    The FDIC insures depositors against loss, but what happens if it runs out of money?
  6. Investing

    Introduction To The Chinese Banking System

    As China steps into a greater role in the global economic system, their banking system continues to evolve.
  7. Personal Finance

    Bag The Best Bank Account

    Take advantage of the deals banks offer, and find the right account for your financial situation.
  8. Personal Finance

    Why You Should Stick With The Big Banks

    Big doesn't always mean bad. We tell you four reasons why.
  9. Insights

    The Role of Commercial Banks in the Economy

    We interact with commercial banks daily to carry out simple financial tasks. That said, the function and creation of a commercial bank is anything but simple.
  10. Investing

    What is a Bank?

    A bank is a financial institution licensed to receive deposits or issue new securities to the public.
RELATED FAQS
  1. Why are CDs (Certificate of Deposit) FDIC-insured?

    Find out why certificate of deposits (CDs) are insured by the FDIC and what the deposit requirements are for receiving insurance ... Read Answer >>
  2. Why is my 401(k) not FDIC-Insured?

    Learn about the Federal Deposit Insurance Corporation (FDIC) and whether its protection extends to 401(k) accounts or just ... Read Answer >>
  3. 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 >>
  4. 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 >>
  5. What factors are the primary drivers of banks' share prices?

    Find out which factors are most important when determining the share price of banks and other lending institutions in the ... Read Answer >>
  6. 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 >>
Trading Center