How do depository institutions differ from nondepository institutions?

Depository institutions, such as banks and credit unions, accept deposits from customers and provide services like savings accounts and loans. They are regulated and insured, enabling them to offer interest on deposits. In contrast, nondepository institutions, such as insurance companies and investment firms, do not accept deposits but offer services like insurance policies, investment opportunities, and financial advice. While both types of institutions play vital roles in the financial system, their functions and regulatory frameworks differ significantly.