Question

Describe the differences between Banks, Savings & Loans, and Credit Unions.

Answer 1

Banks are Financial Institutions which have been licensed to receive deposits and give out money in the form of loans. They also provide Financial Services and various conveniences to the customers. They are regulated by the central bank of the country.

Credit union is financial Cooperative which provides banking services to the members. Under this the members school in their money and receive loans from the pooled amount. The income that is generated is used for projects and services for the benefit of the members. They are smaller in size and cater to a particular region or group of consumers.

Savings refer to the amount saved by consumers. This is the amount which is left over from income of consumers after meeting all expenses. Loans refer to money which is given out by Financial Institutions at a certain rate of interest.