Commercial, Offshore and Credit Union Banks

Financial institutions help with the cash flow of money within the economy among customers, companies and the government (pg. 179). There are several types of financial institutions including: commercial, investment, mutual savings, credit unions, pension funds, life insurance, mutual funds, and hedge funds (c-5:8). Each of the previously stated contributes its own specific service. However, in this research the main objectives are the focuses on commercial, offshore and credit union banks.

In an article shared by J.Singh a commercial bank “is a financial institution which performs the functions of accepting deposits from the general public and giving loans for investment with the aim of earning profit”. Studies show that commercial banks offer numerous services making its primary function to accept, lend and transfer funds. Three types of deposits are current deposits, fixed deposits and, and saving account deposits. Current deposits can be rendered to account holders at any time, but, however no interest is added. With fixed deposits funds can only be withdrawn until that fixed time has expired, customers gain more interest with fixed accounts. Finally, saving accounts are mainly for account holders to save money. Also, they are chartered by the government (c-8, pg. 179). But, however commercial banks have advantages and disadvantages. According to Miriam C, commercial banks can assist with the organizational growth of smaller businesses by creating commercial accounts. Most companies work closely with commercial banks for superior services. This financial institution also supplies invoicing and personalized services and makes deposits to other financial institutions to help with accounting practices. But, however, they’re some cons of commercial bank. Also, according to Miriam C, commercial banks are much more costly than other institutions. Unnecessary fees are charged such as nightly deposits, numerous payroll services and checks transferred. These charges are unnecessary but, this institution still renders them.

In previous research an offshore bank is when businesses or people deposit money to a foreign country where they do not live (Peter De Conceicao). According to Peter, offshore banks render similar practices as the onshore bank. An individual can deposit funds and investment services are given. This bank is located mostly anywhere, and accounts are open due to documentation of people assets. In an article shared by Simon Danaher a few benefits of having an offshore bank are as follows: Offshore banks ensure that account holders funds are secured based upon jurisdiction rules. Also, a next pro is the twenty-four-hour service daily with the assistance of online and telephone banking. “There can be expat advantages to using an offshore bank - but whether these apply in your case will depend on your personal circumstances, such as country of residence”. According to Corr S. Pondent, offshore banks are costly, which means legal fees have to be paid. “There are also certain minimum thresholds for investment in the companies. And the host country could require the investors to own property in the country”.

Finally, according to Joseph Wright credit Unions are “co-operative financial institutions which operate on a not-for-profit basis, their aim being to foster financial health in a community”. In recent research Jaime Young stated some advantages and disadvantages including: Receiving high quality services, voting privileges and even dividends with the company and also, achieving better loan rates. The credit union believes in given individuals superior interest rates. Credit unions can also get one on one time with customers because it’s a smaller organization verse other banks. This can help workers to get acquainted with customer needs and wants more. But, however some disadvantages can entail of an individual becoming a member which will cost them a fee. Unlike a traditional bank, credit unions rarely have branches and ATM machines. For instance, in the Bahamas there’s one big branch where business is done. Also, with less options available in the credit union bank that results in downfall. For more services a traditional bank will be more suitable.