What are the different types of financial institutions?
Get Legal Help Today
Secured with SHA-256 Encryption
UPDATED: Jul 15, 2021
It’s all about you. We want to help you make the right legal decisions.
We strive to help you make confident insurance and legal decisions. Finding trusted and reliable insurance quotes and legal advice should be easy. This doesn’t influence our content. Our opinions are our own.
Editorial Guidelines: We are a free online resource for anyone interested in learning more about legal topics and insurance. Our goal is to be an objective, third-party resource for everything legal and insurance related. We update our site regularly, and all content is reviewed by experts.
The differences in banking entities result from a combination of history and politics. For example, depending upon the type of bank it may be regulated and supervised by different federal and/or state agencies. While each of the banks may seem similar, they enjoy different rights, have different powers and obligations, and may have different tax obligations:
Savings and loans are required to invest more of their assets in mortgages than banks.
Trust companies manage and administer trust funds of individuals and pension plans, but do not take deposits.
Credit unions have some unique tax advantages.
Some entities have powers to sell other products, such as insurance; directly or through subsidiaries; some do not. Some have to place significant reserves on deposit with the government; others do not. Some have different deposit insurance arrangements.