Personal Finance 1st Edition by Jack R. Kapoor

Exercise 27

1     What are examples of deposit financial institutions?

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2    What factors do consumers usually consider when selecting a financial institution to meet their saving and checking needs?

Action Application Using the Web site for the Credit Union National Association (www.cuna.org ) or other sources, obtain information about joining a credit union and the services offered by this type of financial institution.

Step 1 of 2

1. Deposit institutions serve as intermediaries between suppliers and users of funds. Deposit-type institutions include-

• Commercial Banks:It offers a full range of financial services including checking, savings and lending to individuals, businesses and government agencies.

• Savings and Loan Associations:It is a financial institution that specializes in savings accounts and loans for mortgages.

• Mutual Savings Banks: It is a financial institution that is owned by depositors and specializes in savings accounts and mortgage loans. The profits of the bank go to the depositors, usually paying higher rates on savings.

• Credit Unions: It is a user-owned, nonprofit, cooperative financial institution that is organized for the benefit of its members who share a common bond at either work place or church or community affiliation.