Most people are aware of financial institutions such as central banks, retail banks, credit unions, and insurance companies. However, there are many more financial institutions that operate in the United States. While most people prefer banks such as columbia bank aberdeen for all their financing needs, all other financial institutions have something new to offer.
Central banks are the supreme financial institutions that are responsible for the monitoring of all other institutions. Central banks only operate with financial institutions or the Federal Reserve Bank.
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Commercial and Retail Banks
Retail and commercial banks are the face of the banking system and financial institutions in general. They issue credit cards, debit cards, checkbooks, and other banking facilities.
Retail banks cater to the general public and give them financial advice along with options to open accounts. Commercial banks cater to business organizations and lend huge loans to start or support businesses.
Internet banks serve identical services as commercial and retail banks. However, they exist only on the Internet and do not offer any in-person banking services.
Credit unions give financial services to only a certain demographic. There are military members’ credit unions, labor credit unions, and teacher credit unions, to name a few. Their services resemble retail banks and serve only for the financial upliftment of the demographic they serve.
Savings and loan associations
Savings and loan associations serve a very small demographic of people who require small loans. They provide about 20% of lending to businesses per the business’ turnover.
These firms help individuals to buy and sell assets in the market. They offer bonds, stocks, and mutual funds to their clients.
Insurance companies provide financial assurance to insured items. If the insured amenity faces issues, these institutions aid in financing.
Several financial institutions exist in the United States. Even though some of them might seem similar, the differences between all are prominent and important to understand.