Features of Financial Institutions

Financial Institutions

Banks: Offer numerous services such as savings accounts, current accounts, safe deposit boxes, and financial advice.
Building Societies: These institutions are owned by their members i.e., their customers. They principally offer loan and deposit accounts.
Credit Unions: These are small non-profit financial organisations set up by members with a common interest, for example community or workplace-based. Offer basic banking services.
Insurance Companies: They offer protections against potential future financial risks. They pool the premium of multiple policyholders together to pay for claims.
Pension Funds: These are types of investment institutions which collect, pool and invest funds contributed by the sponsor companies on behalf of their employees.
Investment Banks: Primarily involved in helping businesses to raise capital, merger and acquisition of firms and services related to securities.
Finance Companies: These institutions provide loans to individual and commercial customers for a variety of reasons.
Mutual Funds: These are investment institutions that pool the resources of many small investors and use the funds to buy a portfolio of securities.

Understanding Features and Services

Current Account Services: Provided by banks and building societies allow customers to conduct everyday transactions.
Loan and Credit Services: Banks, building societies, and other financial institutions offer loan and credit services.
Financial Advice: Banks and many other institutions offer financial advice services, either for free or a fee.
Online/ Mobile Banking: Many institutions offer online services to allow 24/7 access to account.
Foreign Currency Exchange Services: Financial institutions provide a service for trading one currency for another.
Money Transfer Services: Most financial institutions offer services to transfer money from one account to other multiple ways.

Key Terms to Remember

Building Societies: Member-owned institutions mainly offering loan and deposit accounts.
Financial Advice: Guidance about an individual’s or business’s financial situation offered by financial institutions.
Current Account services: Bank or building society accounts that allow customers to manage day-to-day transactions.
Credit Unions: Member-owned, nonprofit organisations offering basic banking services.
Mutual Funds and Pension Funds: Types of investment institutions that collect and pool funds, contributing towards securities and pensions respectively.

Remember to familiarise with these terms and understand each of their functions thoroughly. If possible, look up real-life examples to help in better understanding these concepts.