Types of Depository Institutions

By: Amy Marzolf

Commercial Banks

  • For-profit depository businesses that offer financial services to both customers and other businesses
  • Offer the widest variety of services to customers
  • The banks are insured by the FDIC for up to $250,000
  • Offer debit cards
  • Have savings and checkings accounts available
  • Anyone can open an account here
  • Offer Loans and mortgages
  • Offer credit cards
  • Offer investments
  • There are limited financial advisers

Credit Unions

  • Nonprofit financial cooperative owned by and operated to benefit its members

  • May be state or federally chartered

  • Membership available to those who belong to a place of employment, union, religious organization, community organization, etc.

  • often can lend money at slightly lower interest rates

  • Sometimes they are able to pay higher interest rates on savings

  • Insured by National Credit Union Administration (NCUA)

  • Typical services: checking accounts, saving accounts, loans and mortgages, and credit cards; offer share, share draft, and share certificate accounts; many offer free financial counseling