Question

Definition between financial intermediate institutions and non financial instrument institutions

Answer 1

Financial institutions, also known as deposit institutions, consist of commercial banks, mutual savings, S&Ls, and credit unions.

Non-financial institutions consist of insurance companies, mutual funds and other investment facilities, brokerage firms, finance companies, credit card providers, and other service providers like pawnshops, lenders and so on.

Financial institutions directly communicate with customers whereas non-financial institutions interact with banks, companies and governments.

Financial institutions also collect deposits while non-financial ones do not.