What Is the Difference Between a Commercial Bank and a Savings & Loan Bank?

Banks and savings and loans differ in their lending practices.
Banks and savings and loans differ in their lending practices. (Image: gold bank image by John Sfondilias from Fotolia.com)

A commercial bank and a savings and loan institution are similar in that they both accept deposits and make loans. Each type of institutions has its own regulator, however, and generally issues loans to different types of lenders.


Both commercial banks and savings and loans accept deposits, which they in turn lend out to both individuals and businesses.

Commercial Bank Loans

Commercial bank loans are primarily business loans, such as construction loans or loans to finance business purchases.

Savings and Loan Mandate

A savings and loan is focused more on lending to individuals for home purchases. Savings and loans are mandated by regulators to have at least 70 percent of assets in residential mortgages or mortgage securities.


The Office of Thrift Supervision is responsible for regulating savings and loan institutions. The office of the comptroller of the currency oversees national commercial banks. State regulators also monitor certain commercial banks.

Service Area

Savings and loan institutions are typically regional in focus, serving local customers, whereas commercial banks are often multinational and capable of serving an international clientele.

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