What is the difference between a financial institution and a bank?

Question

What is the difference between a financial institution and a bank?

Answer 1

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Answer 2

Financial institution is a more general term than bank. If your take financial institutions to be the universe, banks are a subset of that universe. That is, a bank is a type of financial institution.

Answer 3

A financial institution is any organization in the business of moving, investing or lending money, dealing in financial instruments or providing financial services. Includes commercial banks, thrifts, federal and state savings banks, savings and loan associations and credit unions. Refers to any bank, credit unions or other entity that distribute cash.

A bank is an organization, usually a corporation, chartered by a state or federal government, which does most or all of the following: receives demand deposits and time deposits, honors instruments drawn on them, and pays interest on them; discounts notes, makes loans, and invests in securities; collects checks, drafts, and notes; certifies depositor's checks; and issues drafts and cashier's checks.

A financial institution may be a bank or an investment company.