Financial Institution (FI)
Definition of 'Financial Institution (FI)'
There are many different types of FIs, each with its own set of services and offerings. Some of the most common types of FIs include:
* Commercial banks: Commercial banks are the most common type of FI. They offer a wide range of services, including checking and savings accounts, loans, mortgages, and credit cards.
* Savings and loan associations (S&Ls): S&Ls are similar to commercial banks, but they focus on providing savings and lending services to individuals and small businesses.
* Credit unions: Credit unions are nonprofit organizations that offer financial services to their members. They are owned by their members and profits are returned to them in the form of lower interest rates and fees.
* Investment banks: Investment banks provide services to corporations and governments, such as underwriting securities, advising on mergers and acquisitions, and trading stocks and bonds.
* Insurance companies: Insurance companies provide insurance policies to protect their customers from financial risks, such as death, illness, and property damage.
FIs play an important role in the economy by providing financial services to businesses and individuals. They help to facilitate the flow of money and credit, and they help to promote economic growth.
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