At SmartCapitalMind, we're committed to delivering accurate, trustworthy information. Our expert-authored content is rigorously fact-checked and sourced from credible authorities. Discover how we uphold the highest standards in providing you with reliable knowledge.
Today, there are many different types of financial institutions providing a wide range of services to individual consumers and businesses alike. Some of these institutions offer general services while others are more specialized in what they offer. Here are examples of several of the more common types of institutions that may be of help, depending on what type of finances are under consideration.
Perhaps the most common of all financial institutions is the bank. Banks provide the most simplistic of financial services used by a majority of consumers. Checking and savings accounts are staples of most banks, along with relatively safe investment opportunities such as Certificates of Deposit. Banks also offer services such as different types of loans and mortgages for qualified individuals and businesses. For many people, the local bank is the first and possibly only financial institution they will ever do business with.
Credit unions are financial institutions that function in a manner that is very similar to banks. What is a little different with these institutions is that they normally cater to a more exclusive group of clients. Membership in a credit union often is based on working in a given profession, being a member of a specific organization, or living in a given geographic area. The range of services provided by a credit union is very much like those offered by banks, and normally carries the same type of coverage against loss, although this may vary depending on national laws that apply.
Savings and loan institutions also offer many of the services provided by banks and credit unions. In some cases, the mortgages and loans offered by these financial institutions may come with better interest rates than banks or credit unions in the area. While most savings and loans are governed by the same rules, regulations, and protection offered by other banking institutions, there are some countries around the world where the scope of the savings and loan is more limited than other options.
Several different types of financial institutions focus on investing activities for individuals and businesses. These include private lenders, mortgage companies, loan companies, brokerage houses, and retirement fund management corporations. Often, these types of institutions work with and through banks and similar organizations in order to conduct business on behalf of their clients. As with other types of financial services, these types of institutions function under the laws that regulate finances within the nation of origin.
With the advent of Internet commerce, many financial institutions function partially or exclusively online. There are online banks that allow consumers to create and manage savings accounts, money market holdings, and even conduct stock and bond transactions. It is possible to build an investment portfolio using online resources, establish a 401(k), and even monitor and purchase bond issues.
There is some type of financial institution to meet just about any need. From the broad services of banks to the specialized services of a mortgage or investment broker, it is possible to develop financial goals and implement strategies that will help secure a stable financial future.