Difference Between Commercial Bank vs Investment Bank  

Depending upon the type of work performed by a bank they are generally divided into two  major classes: Commercial banks and Investment banks. Whenever someone hears the word  bank, what comes to mind of most of the common people is the commercial banks. Commercial  banks are for the common public for normal transactions like lending and deposits to the  clients. Investment banking is for investors. Investment banking is used for raising capital.  There are few banks that are a mix of commercial and investment banks

Basis of Comparison Commercial Banks Investment Banks
Service provided to

Normal public Investors, corporations, and government.

Services provided (Primary)Deposit, mortgage loans, and lending loans.

Buying and selling of bonds, stocks.

Services provided (Secondary)Overdrafts, promissory notes, locker facility, internet banking, mobile banking, card facilities, etc.

Asset management, raising money, mergers, and acquisition, brokerage services, underwriting of securities facilities, advisory services, etc

How do they earn profit

Difference between the lending and deposit rates.

Fees charged on different services.

Risk involved

Low risk

High risk

Customer base

Very high


Connected with

Credit demand

Performance of the Financial market.


State Bank of India, HDFC, Barclay, Indian bank LTD, ICICI, etc.

JP Morgan Chas, Morgan Stanley, Credit Suisse, Deutsche banks, etc.


The main difference between these two banks is the function and the target audience.  Commercial banks deal with deposits and lending money for business whereas investment  banks deal with trading securities and bonds. 

Important links – 


  1. https://www.thestreet.com/personal-finance/education/what-is-investment-banking-14668344
Idobro Impact Solutions has partnered with Tata Capital to make Financial Literacy accessible for all. For more information on the initiative and to get a deeper knowledge on financial terminology, visit: www.dhangyan.com

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