Question

What is a bank? How does a bank differ from most other financial-service providers?

Answer 1

SIMPLY:

ANSWER:

Though a bank in itself is a financial institution, it differs from other financial institutions by a significant extent. The most prominent difference is the fact that they provide the facility of depositing cash by resorting to savings account―something which the non-banking financial institutions are not entitled to do

Difference between Banks and Financial institutions

It is a tough task to compare the two as there exist several financial institutions, and each of these differ from banks by a significant extent. Differentiating between banks and financial institutions is as good as comparing a deposit-taking financial institution with a non-deposit-taking financial institution.

If that criteria is taken into consideration both financial set-ups differ from each other on the basis of depositing facility, which is only provided by banking institutions. That’s true to a certain extent, but it is by no means complete.

Even though banks are deposit-taking financial institutions themselves, they can at times differ from other deposit-taking financial institutions. Credit unions, for instance, allow consumers to deposit (or borrow) money, but in order to avail this facility, you need to be a member of the said credit union.