Different Types Of Financial Services

By Adrianna Noton

Financial services are companies that work with customers and their money. There are many different types including banks, credit cards, insurance providers, credit unions, investment funds and stock brokerages. Companies doing this work make up a large chunk of the profit making services in the United States.

The history of banking can be traced back to medieval and renaissance Italy. Several families within Italy were heavily involved in the first banks and they then moved their work throughout Europe. There are two types of customer based bank. The first is the commercial bank which accepts deposits and matches them against people withdrawing to control the flow of money. They are commonly used by customers to look after their checking accounts. The other type is a savings bank which is stockholder or mutually owned and usually gets a lot of its business from mortgage accounts.

The first credit card was used in the nineteen twenties in America and was initially used to sell fuel to car owners. A credit card is usually a small plastic card that the customer uses to pay for goods and services. It works on the basis that the creditor pays the initial charge on the understanding that the customer pays that back within a certain time frame with an added charge or interest.

Insurance providers insure customers against a number of things. You can insure your car, your home, items of personal property and your health and life. The customer usually pays a monthly premium to the insurer, who in return gives them a certain amount of money back in the event of something happening for which they are insured.

A credit union is a sort of financial club. It is owned and controlled by its members and it is an affordable way of providing credit for the members. Credit unions are usually much smaller than banks and should normally be non profit organizations, although in reality this is not always the case.

An investment fund is a pool of money that is looked after by an investment manager. This investment manager uses the money to buy into stocks and shares on the behalf of the investor. The idea behind this is that by combining several investors money you are more likely to see a profitable return and hopefully the manager will have the experience and knowledge to choose the best places for you. There are many different types of fund however they are not always risk free.

A stock broker is a broker who buys and sells shares on the behalf of investors. Ordinary people can not buy and sell on the stock exchange. They need to go through a regulated broker. This works in a similar way to an investment fund and as such there are also risks attached, due to the fluctuating nature of the stock market.

Financial services play a big part in the world economy today. There are variations on these services all over the world. Some services will suit some people more than others, depending on their approach to risk and how much money they have.

About the Author: When it comes to dealing with your finances make sure to use the

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of a professional financial advisor or financial planner. They can help you find the shortest and safest route to your financial goals.

Source:

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