Non-depository financial institutions provide services such as loans and investments but unlike banks, they usually do not accept deposits.
Financial institutions that offer many of the same services as banks but usually don't accept deposits are often referred to as non-depository financial institutions.
These institutions, such as insurance companies and pension funds, function as financial intermediaries similar to banks, by providing services like loans and investments, but typically do not offer deposit services to customers.
Banks, savings and loans, and credit unions are traditional depository institutions that accept deposits and make loans. While banks serve a broad customer base, savings and loans (or thrifts) traditionally focus on housing-related loans. Credit unions similarly offer deposit and loan services but are member-owned. All these institutions gather funds which are then loaned out to individuals or businesses. In contrast, non-depository institutions do not accept deposits from the public but still play a role in the financial system through other services. The key difference lies in the acceptance and management of customer deposits.
Non-depository financial institutions offer financial services similar to banks but differ in that they generally do not manage or accept deposits from the public.