Definition
- Depository institution
- A depository institution is an institution that accepts money deposits and then uses these to make loans.
- Not to be confused with: Financial intermediary
- A financial intermediary is an institution, like a bank, that receives money from savers and provides funds to borrowers.
Test yourself
What is the difference between depository institution and financial intermediary?
A depository institution such as a commercial bank or building society is one kind of financial intermediary; insurers and pension funds are intermediaries that do not take deposits.