Depositiry Institutions

Business that provides financial services ~ two types

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Commercial Banks

  • For-profit
  • Open to anyone
  • Numerous financial services
  • Largest depository institutions

Definition of Commercial Banks

A bank that offers services to the general public and to companies

Facts about Commmercial Banks

  • It is also known as 'full-service bank'
  • Commercial banks also purchase bonds, including government bonds, to finance public debt.
  • The banks charge and earn interest on all loans

Credit Union

  • Not-for-profit ~ owned by members
  • Have membership qualifications
  • Members must share a common bond
  • Offer many financial services but not as many as banks
  • Often able to pay higher interest rates and charge lower fees
  • Insured by the NCUA
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Definition of Credit Union

A nonprofit-making money cooperative whose members can borrow from pooled deposits at low interest rates

Facts about Credit Union

  • President Roosevelt signed the Federal Credit Union Act in 1934

  • Credit unions still pay state taxes.

  • The credit union’s board of directors, can set loan limits in an effort to help the credit union grow.

Wendy Banos-Martinez

Personal Finance