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Depository vs. Non-Depository Institutions
By: Izabella Grabowska
"A depository institutions obtain funds from the public and use them to finance the loans and investments that provide the majority of their income."
"Non Depository institutions do not receive deposits but provide other financial services for a fee."
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.
Also called thrift institutions, mutual saving banks receive deposits and are owned by depositors and are protected by federal and state law.
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
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.
"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 offer financial protection form things and the way they earn money is by people paying premiums which are know as fees.
"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 control retirement funds.
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.