Learn Portuguese (Portugal): O banco está ao lado do supermercado.

The base phrase for "next to" is ao lado de. Because you are saying "next to the supermarket", you need the masculine word for "the", which is o. In Portuguese, de and o always combine to make do.

What exactly is the ao part in ao lado?

ao is a combination of the preposition a (to/at) and the masculine word for "the", o. The literal translation of ao lado de is "at the side of".

A bank is a permanent building. Why do we use está instead of é?

It is a common trap! While you might remember that estar is often for temporary things and ser is for permanent things, physical locations are a big exception. In Portuguese, we always use estar to say where physical objects or places are located, even permanent buildings like a bank or a supermarket.

Does banco just mean a bank where I keep my money?

Usually it means a financial bank in this context, but banco is also the Portuguese word for a bench (like in a park) or a stool. You can figure out which one it means from the context.