Financial Institutions

These are establishments that are involved with financial transactions, like investments, deposits and loans. Financial institutions are regulated by the Australian Securities and Investment Commission (ASIC).

They can be authorised deposit-taking institutions (ADIs), which means they are allowed to accept deposits from the public. Banks, building societies and credit unions are all ADIs.

Other financial institutions are not authorised to take deposits and can only lend out money. Their policies for giving out loans are often more lenient when compared to banks (i.e., they will still give you a loan if you have a low credit score). However, to account for this uncertainty, they charge a higher rate of interest.

Banks

Banks are a type of financial institution that are authorised and licensed to provide loans and take loans. They often have strict policies regarding giving out loans, but the interest rate they charge is often lower than those of other financial institutions.

Along with deposits and loans being part of their services, they also tend to provide a range of financial services, like overdrafts and advisory facilities.