A financial institution is responsible for supplying money to the market through transferring funds from investors to companies in the form of loans, deposits, and investments. They transfer money from investors to companies.
A financial institution is responsible for supplying money to the market through transferring funds from investors to companies in the form of loans, deposits, and investments. They transfer money from investors to companies.
A financial institution is responsible for supplying money to the market through transferring funds from investors to companies in the form of loans, deposits, and investments. They transfer money from investors to companies.
A financial institution is responsible for supplying money to the market through transferring funds from investors to companies in the form of loans, deposits, and investments. They transfer money from investors to companies.
transfer of funds from investors to the companies in the form of loans, deposits, and investments.
FINANCIAL INSTITUTIONS TOPICS: 1. Mutual Savings Bank 2. Credit Union 3. Life Insurance Companies 4. Mutual Funds 5. Pension Funds Mutual Savings Bank Mutual Savings bank is a bank, a type of thrift institution, chartered by a central or regional government that does not have shareholders, i.e no capital stock. People who put their money into it own the financial institution. Credit Union a type of financial cooperative that provides traditional banking services. Ranging in size from small, volunteer-only operations to large entities with thousands of participants spanning the country, credit unions can be formed by large corporations, organizations, and other entities for their employees and members. Understanding Credit Unions
Credit unions follow a basic business model:
Members pool their money—technically, they are buying shares in the
cooperative—in order to be able to provide loans, demand deposit accounts, and other financial products and services to each other. Any income generated is used to fund projects and services that will benefit the community and interests of its members. KEY TAKEAWAYS • Credit unions have fewer options than traditional banks, but offer clients access to better rates and more ATM locations because they are not publicly traded and only need to make enough money to continue daily operations. • However, credit unions have considerably fewer brick-and- mortar locations than most banks, which can be a drawback for clients who like in-person service. • Credit unions are exempt from paying corporate income tax on their earnings. Requirements for Membership
Originally, membership in a credit union was limited to
people who shared a "common bond": working in the same industry or for the same company, or living in the same community. In the recent past, credit unions have loosened the restrictions on membership, allowing the general public to join. Life insurance
a contract between an insurer and a policyholder in
which the insurer guarantees payment of a death benefit to named beneficiaries upon the death of the insured. The insurance company promises a death benefit in consideration of the payment of premium by the insured. BREAKING DOWN Life Insurance
The purpose of life insurance is to provide financial
protection to surviving dependents after the death of an insured. It is essential for applicants to analyze their financial situation and determine the standard of living needed for their surviving dependents before purchasing a life insurance policy Life insurance agents or brokers are instrumental in assessing needs and establishing the type of life insurance most suitable to address those needs. Several life insurance channels are available including whole life, term life, universal life and variable universal life (VUL) policies. It is prudent to re-evaluate life insurance needs annually, or after significant life events like marriage, divorce, the birth or adoption of a child and major purchases, like a house. Mutual Fund
a type of financial vehicle made up of a pool of
money collected from many investors to invest in securities such as stocks, bonds, money market instruments, and other assets. Mutual funds are operated by professional money managers, who allocate the fund's assets and attempt to produce capital gains or income for the fund's investors. A mutual fund's portfolio is structured and maintained to match the investment objectives stated in its prospectus. There are several different types of mutual funds you should be aware of:
Closed-End Mutual Funds: Closed-end mutual funds
issue a fixed number of shares to the investing public and usually trade on the major exchanges just like corporate stocks. Closed-end funds often invest in a particular sector, a specific industry, or a certain country. • Open-End Mutual Funds: Open- end mutual funds stand ready to issue and redeem shares on a continuous basis. Shareholders buy the shares at net asset value (NAV) and can redeem them at the current market price. • Load Funds: The term "load" refers to the sales charge paid by an investor who purchases shares in a mutual fund. When the sales charge is imposed at the time of purchase, this is known as a front-end load. Conversely, back-end loads represent charges that are assessed when the investor eventually sells the fund. • No Load Funds: A No Load Fund is sold without a sales charge.
Pension fund are investment pools that pay for employee retirement commitments. Funds are paid for by either employees, employers, or both. Corporations and all levels of government provide pensions. The fund managers invest these contributions conservatively. They must avoid losing the principal but still beat inflation. Main types of Pension Fund
