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Types of Financial Institutions

Financial Institutions are the establishment that conducts financial transactions such as investments, loans, and deposits. Almost everyone deals with financial institutions on a regular basis. Everything from depositing money to taking out loans and exchanging currencies must be done through financial institutions. Virtually everyone living in a developed economy has an ongoing or at least periodic need for the services of financial institutions.

Types of Financial Institutions

Commercial Banks is a type of financial institution that accepts deposits offers checking account services makes business, personal and mortgage loans and offers basic financial products like certificates of deposit (CDs) and savings accounts to individuals and small businesses. A commercial bank is where most people do their banking, as opposed to an investment bank. 

Credit Unions systems vary significantly in terms of total assets and average institution asset size, ranging from volunteer operations with a handful of members to institutions with assets worth several billion U.S. dollars and hundreds of thousands of members. Credit unions operate alongside other mutuals and cooperatives engaging in cooperative banking, such as building societies.

Stock Brokerage Firms is a regulated professional individual, usually associated with a brokerage firm or broker-dealer, who buys and sells stocks and other securities for both retail and institutional clients through a stock exchange or over the counter in return for a fee or commission. The staff of this type of brokerage firm is entrusted with the responsibility of researching the markets to provide appropriate recommendations, and in doing so they direct the actions of pension fund managers and portfolio managers alike. These firms also offer margin loans for certain approved clients to purchase investments on credit, subject to agreed terms and conditions.

Asset Management Firms refers to a systematic approach to the governance and realization of value from the things that a group or entity is responsible for, over their whole life cycles. It may apply both to tangible assets and to intangible assets. Asset management is a systematic process of developing, operating, maintaining, upgrading, and disposing of assets in the most cost-effective manner including all costs, risks and performance attributes.

Finance Companies concerned primarily with providing money. it specializing in the lending of money to consumers, the purchasing of accounts receivable, and the extension of credit to businesses.

Building Societies pays interest on investments by its members and lends capital for the purchase or improvement of houses. it is a type of that provides banking and other financial services to its members. Building societies resemble credit union in the U.S. in that they are owned entirely by their members. These societies offer mortgages and demand-deposit accounts. Insurance companies are often major supporters.

Retailers a person or business that sells goods to the public in relatively small quantities for use or consumption rather than for resale. the organization is a reseller who sells goods or services directly to consumers or end-users. Some retailers may sell to business customers, and such sales are termed non-retail activity.

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