Last year, more than 7 million homes in the United States didn’t have a bank account.
Bank accounts are crucial in today’s society because they help keep your money safe and easy to track.
If you have a portion of money that you want to put away but aren’t sure where it should go, there are a couple of options to consider.
Continue reading to discover all of the different types of financial institutions that you can bring your money to!
Retail & Commercial Banks
Perhaps the most common of different types of financial institutions are retail and commercial banks.
These types of financial institutions are where consumers can open individual accounts—both for checking and savings. Commercial banks work with businesses, but you can still get individual accounts through them.
Both types of banks handle direct deposit, lending, and financial advice to consumers.
Other items that you can get through these banks are certificates of deposit (CDs), loans for personal use or mortgages, and credit cards.
If you are looking for online banking financial institutions, internet banks are recommended.
Internet banks are newer to the industry, but they work much like retail banks. Internet banks provide checking and savings accounts, credit cards, and even personal loans.
There are two types of internet banks that you can use— digital banks and neo-banks. Digital banks are affiliated with traditional banks; however, they only have an online presence. Neo-banks have no affiliation with other institutions.
Investment banks help consumers, governments, and businesses raise capital instead. Banks like Wells Fargo have a division for Global Investment Strategy that will supply you with a financial advisor and support. This type of bank will set you up with investment strategies and tools that will help your money grow.
There are more securities with investment banks, and mobile technology plays a large role in how they function.
One of the non-banking financial institutions that you should know about is central banks.
Central banks help oversee and manage other banks within the country. For the United States, the Federal Reserve Bank is the central bank.
They ensure that monetary policies are being followed. They also help regulate all other banking institutions.
Consumers do not hold individual accounts with central banks. But rather with the banks that fall under the central bank’s supervision.
Do You Know the Different Types of Financial Institutions?
Learning about the different types of financial institutions can help you keep your money safe and grow.
By utilizing this guide, you can understand the differences between each type of bank. Some banks are meant for only online purposes, while others can be found on each street corner.
Investment banks will help you grow your money while keeping it protected. There are various benefits of each type of bank that you go to.
Be sure to check out our blog for more articles about the types of financial institutions and where to put your money!