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Depository vs. Non-Depository Institutions

By: Izabella Grabowska

What is a Depository Institution?

"A depository institutions obtain funds from the public and use them to finance the loans and investments that provide the majority of their income."

What is a Non-Depository Institution?

"Non Depository institutions do not receive deposits but provide other financial services for a fee."

Examples of Depository Institutions

Commercial Banks

Commercial banks serve people and business. Commercial banks are also privately owned and they also do things normal banks do like loans and savings accounts.

Commercial Banks

Mutual Saving Banks

Also called thrift institutions, mutual saving banks receive deposits and are owned by depositors and are protected by federal and state law.

Mutual Saving Banks

Savings and Loan Associations

Savings and Loan Associations

Savings and loan associations used to be different however now they are similar to commercial banks but the main difference between the two is that saving and loan associations are owned by depositors

Credit Unions

Credit Unions

Just like savings and loan association, credit unions are owned by depositors. Online banking is something the credit unions offer and credit unions also not for profit and when ever money is made is given back to the members.

Examples of Non-Depository Institution

Brokerage Houses

Brokerage Houses

"Brokerage Houses execute orders to buy and sell stock and other securities. Paid on commission, brokers help guide their customer in their choices, but they make money only when there is a transaction."

Insurance companies

Insurance companies offer financial protection form things and the way they earn money is by people paying premiums which are know as fees.

Insurance companies

Loan companies

Loan companies

"Loan companies known as finance companies are private companies who lend money and make a profit on the interest. Because they offer loans to customers who are a higher risk, they charge higher interest to offset that risk."

Trust companies

Trust companies control retirement funds.

Trust companies

Currency exchanges

Currency exchanges make money by putting fees on varies things such as cashing checks and etc these fees are normally high since this business makes profits from fees.

Currency exchanges

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