Which type of financial institution allows members to borrow and receive interest on deposits?

Credit unions are cooperative financial institutions that are owned and operated by their members. They serve their members primarily by providing access to loans and offering interest on deposits in a way that typically reflects the needs and interests of the community they serve. Members can borrow from the credit union at competitive interest rates, and any profits generated by the credit union are redistributed to members, often through better rates on savings accounts and lower loan costs. This cooperative structure creates a member-focused approach rather than a profit-driven one, setting credit unions apart from other types of financial institutions.

In relation to the other choices, commercial banks primarily serve the general public and may prioritize profit, while investment banks focus mainly on capital markets and advising corporations rather than deposit-taking and lending to individuals. Mutual funds, on the other hand, pool money from investors to purchase securities, and they do not typically engage directly in borrowing or lending activities related to deposits.