Jennifer,
Great question!

The difference between the two, in essence, in the investments that you're able to select from.

With a bank IRA, your only investment choice will likely be the bank's IRA CDs (although that may be exactly what you're looking for). With a brokerage-based IRA, on the other hand, you'll have the full range of brokerage account investment options available to you, including a broad array of stocks, bonds, mutual funds, ETFs, and so forth.

Of course, the picture is slightly complicated by the fact that some banks now have brokerage divisions and can also offer you an IRA brokerage account.

But at a fundamental level, the difference is that a brokerage IRA account is used to buy various investments, while a bank IRA account is typically used as a CD deposit for the bank itself (and that is generally the only option).

I hope that helps a little!