Not all financial institutions are called “banks.” Read each definition to learn more.
A bank is a financial institution governed by federal and state laws and regulations. Banks make loans, pay checks, accept deposits, and provide other financial services. Most banks are insured by the Federal Deposit Insurance Corporation (FDIC).
A credit union is a nonprofit financial institution owned by people who have something in common, for example, working in the same industry. You have to become a member of a credit union to keep your money there. Most credit unions are insured by the National Credit Union Administration (NCUA).
A savings bank or savings and loan association is similar to a bank. These companies were created to promote homeownership and must have a majority of their assets in housing-related loans. Although many banks also make home loans, a savings institution’s main business is to make home loans. Savings banks are usually insured by the FDIC.
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