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. FDIC Insured Account

    An account that meets the requirements to be covered or insured ...
  5. Limited Service Bank

    Any type of banking business facility that is located separately ...
  6. Retail Banking

    Typical mass-market banking in which individual customers use ...
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. Investing

    Who Backs Up The FDIC?

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

    Federal Deposit Insurance Corporation (FDIC)

    The Federal Deposit Insurance Corporation (FDIC) insures deposits in banks and thrift institutions.
  4. 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.
  5. Personal Finance

    Bag The Best Bank Account

    Take advantage of the deals banks offer, and find the right account for your financial situation.
  6. Investing

    FDIC Sues Bank of America Over Deposit Insurance

    In a lawsuit filed Monday, the FDIC says Bank of America owes at least $542 million for deposit insurance.
  7. Investing

    What is a Bank?

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

    Choose To Beat The Bank

    From internet banking to credit unions, it's in your power to cut fees and maximize service.
  9. Personal Finance

    What is Fractional Reserve Banking?

    Fractional reserve banking is the banking system most countries use today.
RELATED FAQS
  1. 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 >>
  2. 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 >>
  3. What are key factors that are generally considered in demographic studies conducted ...

    Understand the importance of demographic research and learn key demographic factors that a company seeks to discover through ... Read Answer >>
Trading Center