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What Are Financial Institution?

Government agency or privately owned entity
that collects funds from the public, and from
other institutions, and invests those funds in
financial assets, such as loans, securities,
bank deposits, and income generating
property.

Role Of Financial Institution
• Financial institutions provide service as
intermediaries of financial markets. They are
responsible for transferring funds from
investors to companies in need of those
funds. Financial institutions facilitate the flow
of money through the economy

Types Of Financial Institution

• Investment Banks
• Commercial Banks
• Financial Services Corporation
• Private Equity Companies
• Exchange Trade Funds (EFTs)
• Credit Union
• Mutual Funds
• Pension Funds
• Hedge Funds
• Life Insurance Funds

Credit Union
Definition:
– A credit union is a corporative financial
institution, owned and controlled by the
members who uses its services.
– Credit union serves groups that share a
common bond
– Credit unions are not-for-profit
organizations.

Credit Union
Role:
– Provides a safe and convenient place for
members to save money and get loans
and other financial services at reasonable
rates.

Credit Union
Ownership:
– Each member of the credit
union is an equal owner,
entitled to one vote at the
annual meeting.
– Credit unions are led by
the board of directors elected
in the annual meeting.

Mutual Funds
Definition:
– A mutual fund is a mediator that brings together
a group of people and invests their money in
stocks, bonds and other securities.
– Each investor owns shares, which represent a
portion of the holdings of the fund. Thus, a
mutual fund is one of the most viable investment
options for the common man as it offers an
opportunity to invest in a diversified,
professionally managed basket of securities at a
relatively low cost.

Mutual Funds
Benefits:
– Diversified portfolio
– Spreading risk
– Professionally managed
– Regulations

Mutual Funds
Does investing in mutual funds mean
investing in equities only?
– Mutual Funds, besides
equities, can also invest
in debt instruments such
as bonds, debentures,
commercial paper and
government securities.

Pension Funds
Definition:
– A fund established by an
employer to facilitate and
organize the investment of
employees' retirement funds.
The pension fund is a common
asset pool meant to provide
income (pensions) for
employees when they reach the end of their
working years and commence retirement .

Hedge Funds
Definition:
– Hedge fund is similar to mutual fund but a
mutual fund is registered with the SEC,
and can be sold to an unlimited number of
investors.
– Most hedge funds are not registered and
can only be sold to carefully defined
sophisticated investors.

Life Insurance Funds
Definition:
– A life insurance policy is a valued insurance
policy that pays a specified amount to the
beneficiary, when the insured dies.
– A beneficiary can be a person, business, trust, or
estate.
– The owner of the policy is the person or
organization who pays the premiums and has
ownership rights.
– After the death of the insured, the face amount of
the policy is paid to the named beneficiary.

– Premature death is,
for insurance purposes,
the unexpected death of
someone who provides
financial support to others,
and life insurance helps to
provide that support.

What does insurance pays for?

How does life insurance works?

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financial institutions

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