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Finding the Right Financial Institution for Your Needs

by GBAF mag
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Financial institutions are huge companies that function like private banks. They have both public and private shares, stock, and other financial instruments at their disposal. Financial institutions are very important to the global economy because they are the backbone of finance and trade. Financial institutions do not lend their money directly, they borrow it from other financial companies or banks and then lend it out again. They organize, plan, make investments, and handle money on behalf of their customers.

Financial institutions can be categorized into three main types: banks, insurance companies, and savings and loan. The main difference between banks and other financial institutions is that banks make loans by borrowing from other banks or issuing securities. Insurance companies, on the other hand, manage risks by investing in certain risks. Savings and loans are financial institutions that lend money and perform other financial functions. Below are the different types of financial institutions and where they are located.

Banks – The largest financial institutions provide the most cash-like services to its customers, and therefore they are often the most popular ones. They are usually found in bigger cities and are often owned by a number of shareholders. Unlike mutual funds and other financial institutions, banks accumulate their funds with the help of their depositors. They use their depositors to make long-term investments that yield them high profits.

An example of a large bank is the Bank of America located in Atlanta, Georgia. Bank of America, along with all the other financial institutions, is considered one of the best places to put your money for the long term. Their popularity is due to the fact that they provide low interest rates for many types of accounts and services and also pay dividends regularly. Another reason for their popularity is that they manage accounts for people with bad credit. If you are interested in putting your money in a bank, check out Bank of America.

Financial Institutions and Individual Consumers – The other financial institutions work with individual consumers directly. These include credit unions, cooperatives, and other worker cooperatives. Credit unions are owned by the members and work to support the economic needs of their member communities. Examples of cooperatives are The Central State Bank in New York or the cooperative credit union in Wisconsin.

Cooperatives work in conjunction with banks to pool funds for the economic well-being of their member banks. On the other hand, individual consumers have their own savings and checking accounts, but may not have access to funds from other financial institutions. Some examples of these banks include Wachovia Bank and Trust Company, Key Bank, Chase Bank, and CitiBank. If you want to invest in some sort of investment, you should probably go with one of these banks.

Individual Consumer – The final category is for individual consumers. There are currently only a handful of financial institutions for this specific group, which are Citibank, US Bank, BBVA Compass, and Discover Card. This group typically makes loans and purchases on its own. Examples of products offered by this category include CDs (certificates of deposit), money market, and savings accounts. While most people will opt for a CD versus a brokerage account, this type of institution tends to focus on high interest investments and loans.

All financial institutions can be found in the yellow pages, by conducting a thorough online search. You will find listings of banks in all different types. Make sure that you find a bank that is located close to where you live. You can then take the time to go into the institution and speak with someone at the financial institution to see what types of products they offer. After seeing all the different types of financial institutions, you can make a decision based on your personal preferences and find the financial services that are right for you.

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