Which Type Of Financial Institution Are You Dealing With?
The companies that deal with financial transactions like investment, loan or deposits are tagged as financial institutions. People all around the world, deal with these financial institutions on a daily basis.
Exchange of currencies, availing loans or making deposits are done via the financial institutions. There are several financial institutions which are categorized as per their roles in the financial system.
The Various Types of Financial Institutions
• Commercial banks- these deal with deposits of money and provide security. These banks keep the deposited money safe. The financial banks even provide loans to individuals and the businesses.
• Investment banks- the investment banks are different than the commercial banks. The investment bank services include underwriting debt and offer equity and act as an intermediate between the securities and investing public.
• Insurance companies- the insurance companies are responsible for providing financial protection from any losses or damages. Collecting the premiums, it helps the individuals or the businesses to overcome financial crisis, manage the risk and preserve wealth.
• Brokerages- the brokerage acts as an intermediary between buyers and sellers and facilitates the securities transactions. These brokerages are paid commissions after the transactions.
• Investment companies- these are corporations through which the individuals invest in professionally managed assortments of securities. There are 3 varied types of investment companies.
• Nonbank Financial Institutions- The nonbank financial institutions are not banks but provide services as the banks.