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financial institution |
Also found in: Wikipedia, Hutchinson | 0.01 sec. |
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Financial institution An enterprise such as a bank whose primary business and function is to collect money from the public and invest it in financial assets such as stocks and bonds. Financial Institution An organization, which may be either for-profit or non-profit, that takes money from clients and places it in any of a variety of investment vehicles for the benefit of both the client and the organization. Common examples of financial institutions are retail banks, which take deposits into safekeeping and use them to make loans to other customers, and insurance companies, which do not take deposits, but provide guarantees of payment if a certain situation occurs in exchange for a premium. See also: Depository institution, Non-depository institution. Financial institution. Any institution that collects money and puts it into assets such as stocks, bonds, bank deposits, or loans is considered a financial institution. There are two types of financial institutions: depository institutions and nondepository institutions. Depository institutions, such as banks and credit unions, pay you interest on your deposits and use the deposits to make loans. Nondepository institutions, such as insurance companies, brokerage firms, and mutual fund companies, sell financial products. Many financial institutions provide both depository and nondepository services. financial institution An organization that obtains money from deposits and earns money from loans. How to thank TFD for its existence? Tell a friend about us, add a link to this page, add the site to iGoogle, or visit webmaster's page for free fun content. |
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All depository institutions must hold a percentage of certain types of deposits as reserves in the form of vault cash, as a deposit in a Federal Reserve Bank, or as a deposit in a pass-through account at a correspondent institution. The Federal Financial Institutions Examination Council (FFIEC) proposed guidance to help insured depository institutions improve their disclosure to customers with overdraft protection accounts (www. The EDD defines depository institutions (including Federal Reserve banks, savings and loans, commercial banks, local branches and agencies of foreign banks and credit unions) as a segment of the Financial/Insurance/Real Estate industry, FIRE for short. |
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