# Commercial Bank

*Banking & Payments — Finicade finance glossary*

A commercial bank takes deposits and makes loans, earning the spread between them. Its balance sheet is structurally fragile by design: deposits are repayable on demand while loans last for years, so a bank is always borrowing short and lending long. Everything else — capital rules, deposit insurance, the lender of last resort — exists to make that mismatch survivable.

**Also known as:** retail bank, high street bank, depository institution

**Related terms:** [Investment Bank](https://finicade.com/glossary/investment-bank), [Fractional Reserve Banking](https://finicade.com/glossary/fractional-reserve-banking), [Net Interest Margin](https://finicade.com/glossary/net-interest-margin), [Deposit Insurance](https://finicade.com/glossary/deposit-insurance), [Credit Union](https://finicade.com/glossary/credit-union)

Source: https://finicade.com/glossary/commercial-bank