Difference between fund based and non-fund based financial services.

Answer:

Banks and other financial authorities provide a range of financial services, such as factoring, leasing, credit card services, underwriting, portfolio management bill rediscounting, financial advice services, depository services, lease transactions and mutual fund management.

Some financial services are focused on funds and others are based on non-funds. The Difference between fund based and non fund based financial services are tabulated below.

Fund based financial services

Non fund based financial services

A financial service focused on a fund includes loans that banks provide in the form of loans, overdrafts as well as other money transfers.

A bank does not deal with funds or cash transactions in a non-fund-based financial service. Few examples of this type of service are letters of guarantee, bonds and letters of credit.

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