List the depository and nondepository institutions and describe their differences

Answer 1

Depository institutions are financial intermediaries that obtain funds by accepting
checking or savings deposits (or both) from individuals, businesses, and other
institutions and then lend these funds to borrowers.
Commercial banks are the most common depository institutions. When you
make a deposit into a checking or savings account at your bank, you are
providing funds that the bank can use for making loans to businesses,
governments, or other individuals.
Credit unions are cooperatives, meaning that they are not-for-profit
organizations that are owned by their depositors. As not-for-profit
organizations, they strive to pay higher interest rates on member deposits and
charge lower interest rates on loans. Credit unions are open to individuals who
belong to a specific "field of membership.". For example, membership in some
credit unions is limited to the employees who work for a specific employer and
their family members; other credit unions base membership on church or union
affiliation or are open to people living in a certain geographic area.
Savings and loan associations (also called "S&Ls" or "thrifts") traditionally
accepted only savings account deposits and used them to make mortgage
loans. During the early 1980s, regulations on S&Ls were relaxed, allowing
them to accept checking account deposits and make a broader range of loans.
Still, the major focus of the savings and loan industry remains mortgage loans.
Nondepository Financial Institutions: In addition to banks and other depository
institutions, a number of other financial intermediaries play important roles in financial
markets.
Institutional investors don't accept deposits, but amass huge pools of
financial capital from other sources and use these funds to acquire a portfolio
of many different assets. Mutual funds obtain money by selling shares to
investors, insurance companies by collecting premiums from policyholders, and
pension funds by collecting funds employers and their employees contribute for
the employees' retirement. These institutions invest heavily in corporate stock?
the majority of shares in most major U.S. corporations are held by institutional
investors. They are also major holders of corporate bonds and government
securities.
Securities brokers act as agents for investors who want to buy or sell
financial securities, such as corporate stocks or bonds. In addition to handling
the trades, many brokers provide their clients with additional services such as
financial planning and market research. Brokers are compensated by charging
fees and commissions for the services they provide.
Securities dealers participate directly in securities markets, buying and selling
stocks and bonds for their own account. They earn a profit by selling securities
for higher prices than they paid to purchase them. (The difference between the
prices at which they buy and sell a security is called the spread.)
Investment banks are financial intermediaries that help firms issue new
securities to raise financial capital. Sometimes investment banks actually buy
the newly issued securities themselves; in other cases they simply help arrange
for their sale. Today's investment banks aren't actually independent
companies. Instead, they are typically divisions of huge bank holding
companies, which also own commercial banks.