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Investment Banking vs. Commercial Banking: What’s the Difference?

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Investment Banking vs. Commercial Banking

An Overview of Investment Bank vs. Commercial Banking

Commercial banks and investment banks are both vital financial institutions in today’s economy, but they carry out very distinct operations and employ different sorts of personnel.

Most people have an image of a “bank” in their heads. Commercial banks accept deposits, provide loans, protect assets, and deal with a wide range of consumers.

Investment banks, on the other hand, cater to huge businesses and institutional investors. An investment bank might assist with merger and acquisition transactions (M&A), issue securities, or provide long-term financing for large-scale business projects.


Commercial banks accept deposits, grant loans, safeguard assets, and deal with a wide range of clients, including the public and businesses.

Investment banks, on the other hand, provide services to major businesses and institutional investors.

If you want a high salary and are prepared to travel along, a demanding road, investment banking is most likely the best option.

Commercial banking may be a better fit if you want to balance your job and personal life a bit more while still having opportunities to interact with clients in a more informal way.

Investment banking is more competitive, pays higher salaries, and is considered more glamorous than commercial banking. Investment banks are typically more demanding of their applicants and employees, many of whom are high-level analysts. That said, both options may lead to a fulfilling, long-term profession with plenty of money.

Commercial Banking

In the commercial banking sector, as well as in the investment banking field, there are a variety of career paths to choose from. Tellers, sales employees, trust officers, loan officials, branch managers, and technical programmers are just a few of the employment possibilities open to commercial banks.

Commercial bankers have an edge over investment bankers in terms of the total number of hours that a person may expect to work. Although there are exceptions, most investment banking professionals put in long hours. Commercial bankers, on the other hand, work normal business weeks (rather than “banker’s hours,” which only applies to the commercial side).

Higher-level commercial bankers, such as trust managers or private bankers, rarely work more than 50 hours a week. Those who want to spend their leisure time with their families and still make it to happy hour are likely best suited for a career in the commercial banking sector.

Investment Banking

Investment banking roles can be found in banks, hedge funds, asset management firms, venture capital companies, and other financial institutions. Consultants, banking analysts, capital market analysts, research associates, trading experts, and numerous others are some of the investment banking occupations. Each role has its own set of education and qualifications requirements.

A bachelor’s degree in finance, economics, accounting, or mathematics is a good foundation for any banking career. In fact, many entry-level commercial bank jobs, such as a personal banker or teller, might be all that you need. Those interested in investment banking should seriously consider earning an MBA (Master of Business Administration) or another professional credential

People skills are an important asset in any banking job. Even dedicated research analysts spend a lot of time working as part of a team or offering consulting services to customers. Some jobs require more of a sales approach than others, although comfort in a professional social setting is essential. Communication abilities (explaining ideas to clients or other departments) and initiative are also vital traits.

Investment bankers are some of the most well-paid workers in business, which is one of the reasons so many people want to join their ranks. An investment banking associate in New York City can make between $118,371 and $224,449 per year.

An investment banking vice president or managing director may make up to $500,000 per year for the truly gifted and dedicated.

However, it is not unusual for an investment banking associate to put in between 65 and 75 hours a week, and sometimes even that does not cover the enormous amount of study required. Even if a bank does not demand entry-level bankers to work on weekends at the office it will still expect staff to be accessible by email and phone.


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