Finance assignment question Example | Topics and Well Written Essays - 1000 words

Finance caput - Assignment ExampleThis paper will take into account depository organisations whose main purpose is to furnish financial services such as loans and deposits. Some of the constituents of depository institution argon commercial banks, construct societies, mortgage loans and credit unions, which all fall under one mainstream of financial institution. The depository institution came into humankind when people felt there was need for security for their money. People faced the risks of loss of money done theft or accidents while keeping their money in their wallets or at home. Thus organize the initial goal of financial institution, which was only to offer the safekeeping of their clients money. Currently depository institution such as commercial banks, takes deposits from clients, offer security and convenience of service to their customers. Clients can now transact with the utilize of checks or wire transfers at their convenience courtesy of the commercial banks. Clients to banks also have a lot to earn money from their deposits that is they can let their money work for them. The depository institution, also support loans to business, individuals and organizations to take on them to expand as this will only provide more income to the institutions once they bring back their income and clams (Valentine 2010). Nevertheless, the main difference between the depository institution and other financial institutions is the ability of the depository institution to offer cash deposits to its customers. The institutions achieve this through facilities such as savings account, fixed account and present-day(prenominal) accounts, Australia, & PricewaterhouseCoopers (2001). Financial institutions arises out of the needs and demands of the customers, therefore the main dish out of this institution is to be intermediaries of financial markets. That is they are responsible for the movement of funds from one market to another for example, from investors t o organizations or individuals to individuals. Thus, these financial institutions form the rachis of every economy, as they are responsible for the movement and flow of money in the economy. However, this is only the consumption of financial institution. In relation to the depository institution, it also shares some of the general function, but its main function is to provide the facility of cash deposits to their clients, thus, enabling them to meet their financial obligations at their convenience. These depository banks also provide security to the clients investment, from cash to assets, as customers can easily transact without the obligation of carrying large sums of money as financial institution takes charge of such matters. In addition, they also keep records of account of their clients as they modify them to keep track of their finances (Pearson 2009). Another function of depository institutions is to pool the deposits and saving of many scummy depositors and converts th em into a large pool of money that provides loans to its trustworthy customers. This function also serves and answers the question of the sources of funds of these institutions. finished this mechanism the bank, makes money that they use in the daily running of their business. Subsequently the bank lends money to its customers at a higher rate ensuring