Financial Cooperative

AAA

DEFINITION of 'Financial Cooperative'

A financial institution that is owned and operated by its members. The goal of a financial cooperative is to act on behalf of a unified group as a traditional banking service. These institutions attempt to differentiate themselves by offering above-average service along with competitive rates in the areas of insurance, lending and investment dealings.

INVESTOPEDIA EXPLAINS 'Financial Cooperative'

Credit unions are the most popular form of financial cooperative because they are owned and operated by their members. These financial institutions often pay higher-than-average interest rates and are only accessible to those that have accounts.

The size of financial cooperatives can vary from only a handful of branches to being widespread with thousands of locations. Many financial cooperatives offer products and services that are comparable to those offered by the major diversified banks.

RELATED TERMS
  1. Unbanked

    A slang term for people who do not use banks or banking institutions ...
  2. Farm Credit System - FCS

    The Farm Credit System is a nationwide network of cooperative ...
  3. Financial Intermediary

    An entity that acts as the middleman between two parties in a ...
  4. Credit Union

    Member-owned financial co-operative. These institutions are created ...
  5. Bank

    A financial institution licensed as a receiver of deposits. There ...
  6. Demutualization

    When a mutual company owned by its users/members converts into ...
RELATED FAQS
  1. No results found.
Related Articles
  1. Savings

    Are Your Bank Deposits Insured?

    Learn how the FDIC is helping to keep your money in your pockets.
  2. Home & Auto

    Housing Cooperatives: A Unique Type Of Home Ownership

    Co-ops are often less expensive than apartments and provide some unique benefits and drawbacks for owners.
  3. Insurance

    Your First Checking Account

    This owner's manual will show you what to expect from your bank.
  4. Investing

    Who are Stakeholders?

    “Stakeholder” is used in commerce to describe any party who has an interest in a business or enterprise. Traditionally, stakeholders in a corporation are shareholders, employees, customers and ...
  5. Economics

    Afraid Of A New Financial Crisis?

    It may be time for the U.S. to adopt a model for financial companies that better deters risky financial behavior.
  6. Professionals

    Why Is Wall Street Dominated By Men?

    Find out why women in the financial industry are still lagging behind their male counterparts when it comes to pay.
  7. Investing

    What's a Subsidiary?

    A subsidiary is a corporation owned 50% or more by another corporation. The owning corporation is usually called the parent or holding company. A company that is 100% owned and controlled by ...
  8. Investing

    What's a Divestiture?

    Divestiture is when a company, government or other organization sells, shuts down or otherwise eliminates a division or operating unit. Divestitures happen for many reasons. Management may decide ...
  9. Professionals

    Porter's Five Forces

    Porter’s Five Forces is an analysis scheme created by Harvard Business School professor Michael E. Porter. Using this analysis tool, business managers can gauge the level of competition within ...
  10. Stock Analysis

    How American Express Counts on Your Profligacy

    Consumers like novelty, reliability, variety, and other subjective qualities. But what really keeps them coming back to American Express is convenience.

You May Also Like

Hot Definitions
  1. Prepaid Expense

    A type of asset that arises on a balance sheet as a result of business making payments for goods and services to be received ...
  2. Gordon Growth Model

    A model for determining the intrinsic value of a stock, based on a future series of dividends that grow at a constant rate. ...
  3. Cost Accounting

    A type of accounting process that aims to capture a company's costs of production by assessing the input costs of each step ...
  4. Law Of Supply

    A microeconomic law stating that, all other factors being equal, as the price of a good or service increases, the quantity ...
  5. Investment Grade

    A rating that indicates that a municipal or corporate bond has a relatively low risk of default. Bond rating firms, such ...
  6. Fringe Benefits

    A collection of various benefits provided by an employer, which are exempt from taxation as long as certain conditions are ...
Trading Center