Mutual Savings Bank

A mutual savings bank is type of banking institution. It is normally employed by governments at the state and regional level for the purposes of helping individuals. The mutual savings banks provide a lot of security to the clients.

Description of Mutual Savings Banks
In contrast to the commercial banks the mutual savings banks normally do not have any shareholders. After a certain limit the profits of the mutual savings banks are provided to the investors. They focus mainly on securing the investments of the clients.

By definition the ownership of a mutual savings bank is retained by its depositors. The mutual savings banks are supposed to maximize the utility of the consumers.

Investment Options provided by Mutual Savings Banks

The mutual savings banks provide their clients with a lot of investment options as follows:

Debt Securities

Savings and Friendly Society
Savings and Friendly Society was the first of its kind in the present time. It was instituted in the year 1810 by Reverend Henry Duncan and was established at Ruthwell in Scotland. The main purpose of establishing Savings and Friendly Society was to promote the concept of saving money among the workers of that area.
Mutual Savings Banks in the United States of America
The mutual savings banks in the United States of America were influenced a lot by the mutual savings banks of Europe. The first mutual savings bank of the USA was Provident Institution for Savings. It was incorporated in Boston in the 19th century.

The mutual savings banks in the USA were established in order to address the financial problems of the economically backward people. These banks were founded by the philanthropists.
Functions of Mutual Savings Bank

Following are the main functions of mutual savings bank:

To look after deposits
To make investments that are limited and safe
To give the investors payment through interest

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Last Updated on : 1st July 2013

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