Financial Institution: Definition and What to Look For | First Bank (2024)

The definition of a financial institution typically describes an establishment that completes and facilitates monetary transactions, such as loans, mortgages, and deposits. Financial institutions are a place where consumers can effectively manage earnings and develop financial footing. Consumers can make an informed choice when choosing a bank to keep their money by knowing the core features of financial institutions.

What to Look for in a Financial Institution

Financial institutions facilitate some of life’s biggest events. When choosing a place to keep your money, it is important to make sure the bank meets certain criteria. Here are some key features to look for when you select a bank:

  • Online Banking — The convenience of being able to access your bank accounts from anywhere isn’t something you should overlook. Look for a bank that offers online banking, as well as mobile banking and tablet banking.
  • High Yield Accounts — High yield checking and savings accounts are a great way to get more for your money. If earning interest is important to you, choose a bank that offers high yield options and competitive rates.
  • Accessible ATMs — When you’re on the go you need to have access to cash as you need it. That is why choosing a bank with accessible ATMs and reasonable ATM fees is important.
  • Great Customer Service — When you have a question about your account, you want to speak with a bank representative that is friendly and helpful. A great bank will have friendly representatives ready to help you in any way possible.
  • Reasonable Fees — Some banks charge multiple fees — such as ATM fees, withdrawal fees, and monthly maintenance fees — just for using their services. Check to see if the fees your bank charges sound reasonable, or if they provide ways to avoid fees altogether.
  • FDIC Insurance — You work hard to earn your money, so you want to make sure it is safe at the bank you choose. Look for banks that are members of the Federal Deposit Insurance Corporation (FDIC). The FDIC will insure the money in your deposit accounts up to a certain amount.

These Features and More From First Bank*

First Bank strives to provide you with these key features and more. We offer digital banking options, financial expertise, excellent customer service, and flexible investment options, making us the ideal bank to partner with during life’s biggest decisions. Our branches extend throughout North and South Carolina.Contact us today to schedule a consultation with one of our financial advisors.

Sources:

Investopedia: http://www.investopedia.com/terms/f/financialinstitution.asp

Investopedia: http://www.investopedia.com/terms/a/apy.asp

Investopedia: http://www.investopedia.com/terms/f/fdic-insured-account.asp

Financial Institution: Definition and What to Look For | First Bank (2024)

FAQs

Financial Institution: Definition and What to Look For | First Bank? ›

The definition of a financial institution typically describes an establishment that completes and facilitates monetary transactions, such as loans, mortgages, and deposits. Financial institutions are a place where consumers can effectively manage earnings and develop financial footing.

What is the definition of a financial institution in a bank? ›

A financial Institution is defined in 18 U.S. Code § 20 as an entity, national or international, that deals primarily in business related to financial or/and monetary transactions, namely loans, deposits, investments, currency exchange, or any other transaction of similar nature.

What is banking in financial institutions? ›

Banking refers to the umbrella of services provided by financial institutions, such as accepting deposits and providing loans. Banking provides essential financial services like depositing, lending, and asset protection to support the economy.

Which of the following makes a financial institution a bank? ›

Accepting deposits and advancing loans are the needed function which is needed for a financial institution to become a bank.

Who qualifies as a financial institution? ›

(a) Financial institution means any partnership, company, corporation, association (incorporated or unincorporated), trust, estate, cooperative organization, or other entity that engages in any financial activity.

Is financial institution another word for bank? ›

bank: A financial institution which in the normal course of its business operations accepts deposits; pays, processes, or transacts checks or other deposit accounts; and performs related financial services for the public. Also a bank generally makes loans or advances credit.

Which are considered to be nonbank financial institutions? ›

Examples of nonbank financial institutions include insurance firms, venture capitalists, currency exchanges, some microloan organizations, and pawn shops.

What is the definition of a bank? ›

bank, an institution that deals in money and its substitutes and provides other money-related services. In its role as a financial intermediary, a bank accepts deposits and makes loans.

What is the difference between a bank and a non bank financial institution? ›

Banks are mainly focused on providing retail banking products and services, while non-banking financial institutions offer a wider range of products and services, including corporate banking, investment banking, and private banking.

What is an example of a financial institution? ›

The major categories of financial institutions are central banks, retail and commercial banks, credit unions, savings and loan associations, investment banks and companies, brokerage firms, insurance companies, and mortgage companies.

Are all financial institutions or banks the same? ›

There are different kinds of financial institutions, banks and credit unions, and they may be licensed by the federal government, California, or some other state. This difference can be important, especially if you want to file a complaint, because different financial institutions are regulated by different agencies.

What are the classification of banks? ›

Classification of Banks in India

Commercial Banks can be further classified into public sector banks, private sector banks, foreign banks and Regional Rural Banks (RRB). On the other hand, cooperative banks are classified into urban and rural.

What is another term for financial institution? ›

bank, banking company, banking concern, depository financial institution.

Are all financial institutions are banking institutions? ›

Answer: Not all financial institutions are banking institutions but all banks are financial institutions. As financial institutions consists of banks, trust companies, insurance companies, brokerage firms, and investment dealers....

What services do financial institutions provide? ›

All financial institutions usually offer basic banking services (checking and savings accounts, consumer loans, etc.) with larger ones offering a fuller range of services (credit cards, mortgages, foreign currencies, etc.).

What is the legal definition of institution? ›

The first establishment of a law, rule, rite, etc. Any custom, system, organization, etc., firmly established. An elementary rule or principle. In practice.

What is a financial institution under 31 CFR? ›

It includes but is not limited to depository institutions, banks, savings banks, money service businesses, trust companies, insurance companies, securities brokers and dealers, commodity futures and options brokers and dealers, forward contract and foreign exchange merchants, securities and commodities exchanges, ...

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