Which financial intermediary receives contracted payments from individuals and uses those funds for investments?

The correct answer is that a contractual saving institution receives contracted payments from individuals and uses those funds for investments. These institutions are designed to collect regular contributions, typically through contracts such as life insurance policies or pension plans. The funds collected are then pooled together and invested in various financial instruments to generate returns over time.

Contractual saving institutions have a structured approach to savings and investments, where individuals commit to making predetermined payments for a specified period. This feature enables these institutions to engage in long-term investment strategies, which can help provide financial security for their members upon reaching retirement age or for specific goals.

The nature of these institutions ensures that they play a crucial role in mobilizing savings in the economy, allowing for capital allocation into various productive sectors. This process contrasts with other financial intermediaries, which may focus on different mechanisms of fund sourcing or investment strategies.