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Types of Financial Institutions

Financial institutions are the firms that provide financial services and advice to their clients. The financial institutions are generally regulated by the financial laws of the government authority.

Various types of financial institutions are as follows:

Role of Financial Institutions

  • The various financial institutions generally act as an intermediary between the capital market and debt market. But the services provided by a particular institution depends on its type.
  • The financial institutions are also responsible to transfer funds from investors to the companies.
  • Typically, these are the key entities that control the flow of money in the economy.



Services Offered by Various Financial Institutions

The services provided by the various types of financial institutions may vary from one institution to another.
For example,
The services offered by the commercial banks are -
  • insurance services,
  • mortgages,
  • loans and
  • credit cards.

The services provided by the brokerage firms, on the other hand, are different and they are -
  • insurance,
  • securities,
  • mortgages,
  • loans,
  • credit cards,
  • money market and
  • check writing.

The insurance companies offer -
  • insurance services,
  • securities,
  • buying or selling service of the real estates,
  • mortgages,
  • loans,
  • credit cards and
  • check writing.


The credit union is co-operative financial institution, which is usually controlled by the members of the union. The major difference between the credit unions and banks is that the credit unions are owned by the members having accounts in it.

The stock brokerage firms are the other types of financial institutions that help both the corporations and individuals to invest in the stock market.

Another type of financial institution is the asset management firms. The prime functionality of these firms is to manage various securities and assets to meet the financial goals of the investors. The firms also offer fund management advice and decisions to the corporations and individuals.



More Information Related to Financial Institutions
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Financial Institutional Fraud Financial Institutional Functions
Financial Institution Management Financial Institution Ratings
Financial Institutional Regulation Risk Management
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Trust Company Financial Institution Valuation
Types of Financial Institution Financial Institutional Security
Marketing in Financial Institution Financial Institutional Insurance


Last Updated on : 27th June 2013

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