Business that provides financial services ~ two types
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
- 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
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.