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