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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.
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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.
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