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.

BREAKING DOWN '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. Bank

    A financial institution licensed as a receiver of deposits. There ...
  5. Credit Union

    Member-owned financial co-operative. These institutions are created ...
  6. Demutualization

    When a mutual company owned by its users/members converts into ...
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. Economics

    Explaining Strategic Alliances

    A strategic alliance is a business relationship between two or more entities that share recourses for a common goal.
  5. Fundamental Analysis

    An Inside Look at Pinterest's Business Model

    Learn about Pinterest and the type of company it is trying to become. Understand the company's business model and what makes it unique.
  6. Entrepreneurship

    What's the Purpose of IRS Form 1065?

    Business partners need the information on this form to complete their own tax returns. Here are the details.
  7. Entrepreneurship

    5 Bad Habits Every Entrepreneur Should Avoid

    Learn how to avoid specific bad habits that plague entrepreneurs, such as failure to plan, bad associations and not keeping a good work-life balance.
  8. Professionals

    8 Justifications For Sky-high CEO Salaries

    Why are CEO salaries so astronomically high? There may be more to the story than you think.
  9. Stock Analysis

    Drugmaker Extraordinaire: How Eli Lilly Grows

    Drugs mean big profits in America. Here's how the country's oldest pharmaceutical firm keeps its toehold in the market.
  10. Professionals

    Are Stock Buybacks Always Good for Shareholders?

    Stock buyback programs aren't always done with the interests of shareholders in mind. It's important to try to understand the motivation behind such moves.
RELATED FAQS
  1. How are joint ventures regulated in the United States?

    Joint ventures are a very specific type of business arrangement. They can be organized in several different legal structures, ... Read Full Answer >>
  2. Can I buy insurance to reduce unlimited liability in a partnership?

    Partnership insurance is actually quite common. Most of the time, partners buy insurance to safeguard against the possibility ... Read Full Answer >>
  3. What are the benefits for a company investing in a greenfield investment?

    Advantages of greenfield investments include increased control, the ability to form marketing partnerships and the avoidance ... Read Full Answer >>
  4. What is a family Limited Liability Company (LLC)?

    A family limited liability company (LLC) is formed by family members to conduct business in a state that permits such form ... Read Full Answer >>
  5. What is the difference between a silent partner and a general partner?

    Business structures provide benefits to business owners and entrepreneurs. In the small business arena, the most common business ... Read Full Answer >>
  6. What are the liabilities of a silent partner?

    Because of the nature of their interest in a business, silent partners have limited liability that extends only up to the ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Financial Crisis

    A situation in which the value of financial institutions or assets drops rapidly. A financial crisis is often associated ...
  2. Election Period

    The period of time during which an investor who owns an extendable or retractable bond must indicate to the issuer whether ...
  3. Shanghai Stock Exchange

    The largest stock exchange in mainland China, the Shanghai Stock Exchange is a nonprofit organization run by the China Securities ...
  4. Dead Cat Bounce

    A temporary recovery from a prolonged decline or bear market, followed by the continuation of the downtrend. A dead cat bounce ...
  5. Bear Market

    A market condition in which the prices of securities are falling, and widespread pessimism causes the negative sentiment ...
  6. Alligator Spread

    An unprofitable spread that occurs as a result of large commissions charged on the transaction, regardless of favorable market ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!