F. I., F. I., F. M.

• Financial Institution

  An organization that handles financial transactions for individuals, groups, and other organizations-profit, non-profit, or government owned
• Types of Financial Institutions

  • Commercial Banks
  • Savings and Loans
  • Credit Unions
  • Investment Banks
  • Insurance Companies
  • Brokerage Firms
  • Investment Companies
• Depository Institution

  Manages money that is deposited by individuals and organizations
• Non-depository Institution

  Serves as intermediaries between savers and demanders of funds, handling funds from those who have excess funds to those who need additional funds
• Depository Institutions


  • Banks, Credit Unions, Saving and Loan Associations
• Non-depository Institutions


  • Insurance Companies, Pension Funds, Securities Firms, Government-Sponsored Enterprises, Finance Companies
• Savings and Loans

  • Accept deposits from individuals and organizations with excess funds and provide loans to those in need
• Credit Unions


  • Operate similarly to Savings and Loans, offering higher interest rates on savings accounts and lower rates on certain types of loans compared to banks
• Investment Banks


  • Facilitate transactions for individuals and institutions in investing
• Insurance Companies

  • Operate on the principle of pooling risks, collecting premiums from clients to protect them from unexpected events
• Brokerage Firms


  • Earn through commissions, facilitating the buying and selling of securities
• Investment Companies


  • Corporations where individuals and organizations invest in managed investment portfolios
• Financial products are called Financial instruments
• Financial instruments signify financial products when individuals and organizations deal with each other in completing financial transactions
• Common Financial Instruments


  • Savings
  • Loans
  • Bonds
  • Security
• Financial products


  Called Financial instruments, signified by instruments when individuals and organizations deal with each other in completing financial transactions
• Financial instrument


  A document signifying a legal or binding agreement between two parties, typically with monetary values associated with them
• Types of Security


  • Regular account
  • Time deposit
• Lending money


  Loan granted to other organizations by individuals and organizations with excess funds
• Having a security


  Signifying ownership of stocks of a publicly traded company or a bond issued by a government agency
• Common Financial Instruments


  • Treasury Bills
  • Insurance products
• Financial Market is a means for the buying and selling of stocks, bonds, and other financial instruments
• Stocks are shares of a corporation sold to investors while bonds are essentially money loaned
• Financial market is where individuals and organizations find investors and lenders for funds
• BSP: 'Financial market channels funds to savings'
• Money Market are the markets where transactions involving short-term debt securities take place
• Examples of Money Market securities

  • Treasury bills
  • Commercial paper
  • Negotiable certificates of deposit issued by government, business, and other financial institutions