What is a commercial bank primarily designed to do?

A commercial bank is primarily designed to lend for commercial activities and provide depository services. This means that these banks handle a variety of financial transactions, facilitating business growth by offering loans for operational expenses, equipment purchases, and other commercial needs. Additionally, they serve as a safe place for individuals and businesses to deposit funds, manage cash flow, and access financial services like checking and savings accounts.

The focus on commercial activities distinguishes commercial banks from other types of financial institutions that may specialize in residential loans or savings accounts. This dual role enables commercial banks to support both individuals and businesses, making them integral to the broader economy. In contrast, options that limit the bank's functionality to savings accounts or residential mortgages do not accurately capture the full range of services offered by a commercial bank.