Types of Financial Institutions

Your Choice
It’s important to understand the different types of financial institutions so you can make choices best suited to your current financial situation and your future financial goals.

Banks
Banks offer a variety of services including checking and savings accounts. They also can provide credit and extend loans. Banks with FDIC insurance protect your money up to $100,000, even if the bank closes. If you have an account at a bank, there is usually no fee to cash a check at that bank.

Savings and Loans (S&Ls)
A savings and loan association, commonly known as a “thrift” or “S&L”, is a financial institution that accepts deposits primarily from individuals; and offers primarily residential mortgage loans. They are often mutually held (usually called mutual savings banks); meaning that the depositors and borrowers are members with voting rights and have the ability to direct the goals of the organization. S&Ls with FDIC insurance protect your money up to $100,000, even if the S&L closes.

Credit Unions
Credit unions are nonprofit financial institutions created to serve their members. These institutions are owned and controlled by members who are also shareholders. They offer the same types of services as banks and savings and loans, but often for less cost. Credit unions make money from investing your funds, and pass the profits back to their members through lower fees and better interest rates. Like banks and S&Ls, credit union deposits are insured up to $100,000 by the federal government. Many credit unions have relaxed their eligibility for membership, allowing more people to join.

Electronic Banks
Most financial institutions offer electronic banking or Internet banking which allows you to perform financial transactions over the Internet through a secure Web site. Many customers find this service extremely convenient because it allows you to choose when and where to do your banking. Many Internet banks are FDIC insured, but may not have a branch near you.

Mortgage Banks
A mortgage bank is a financial institution that makes mortgage loans to customers. Unlike banks and credit unions, a mortgage bank generally specializes only in making mortgage loans. They do not take deposits from customers.

	Protecting Your Personal Information Financial institutions are committed to taking actions to safeguard the non-public personal and sensitive information you provide to them. Banks and credit unions set policies and procedures for handling your non-public information. Financial institutions that offer online banking regularly monitor their Web sites to help ensure privacy and security. Most institutions routinely conduct background checks on all their employees and provide privacy training.