Savings bank

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A savings bank is a financial institution whose primary purpose is accepting savings deposits and paying interest on those deposits.

Financial institution institution that provides financial services for its clients or members

Financial institutions, otherwise known as banking institutions, are corporations that provide services as intermediaries of financial markets. Broadly speaking, there are three major types of financial institutions:

  1. Depository institutions – deposit-taking institutions that accept and manage deposits and make loans, including banks, building societies, credit unions, trust companies, and mortgage loan companies;
  2. Contractual institutions – insurance companies and pension funds
  3. Investment institutions – investment banks, underwriters, brokerage firms.
Savings account type of account maintained by retail financial institutions

A savings account is a deposit account held at a retail bank that pays interest but cannot be used directly as money in the narrow sense of a medium of exchange. These accounts let customers set aside a portion of their liquid assets while earning a monetary return.

Contents

They originated in Europe during the 18th century with the aim of providing access to savings products to all levels in the population. Often associated with social good these early banks were often designed to encourage low income people to save money and have access to banking services. They were set up by governments or by socially committed groups or organisations such as with credit unions. The structure and legislation took many different forms in different countries over the 20th century.

Credit union member-owned financial cooperative

A credit union is a member-owned financial cooperative, controlled by its members and operated on the principle of people helping people, providing its members credit at competitive rates as well as other financial services.

The advent of Internet banking at the end of the 20th century saw a new phase in savings banks with the online savings bank that paid higher levels of interest in return for clients only having access over the web.

A direct bank is a bank without any branch network that offers its services remotely via online banking and telephone banking and may also provide access via ATMs, mail and mobile. Direct banks reduce the significant costs of maintaining a branch network.

History

In Europe, savings banks originated in the 19th or sometimes even the 18th century. Their original objective was to provide easily accessible savings products to all strata of the population. In some countries, savings banks were created on public initiative, while in others, socially committed individuals created foundations to put in place the necessary infrastructure.

In 1914, the New Student's Reference Work said of the origins: [1]

France claims the credit of being the mother of savings banks, basing this claim on a savings bank said to have been established in 1765 in the town of Brumath, but it is of record that the savings bank idea was suggested in England as early as 1697. There was a savings bank in Hamburg, Germany, in 1778 and in Berne, Switzerland, in 1787. The first English savings bank was established in 1799, and postal savings banks were started in England in 1861.

Brumath Commune in Grand Est, France

Brumath, also Brumpt, is a commune in the Bas-Rhin department in Grand Est in north-eastern France.

The first chartered savings bank in the United States was the Provident Institution for Savings in the Town of Boston, incorporated December 13, 1816. The Philadelphia Savings Fund Society began business the same year, but was not incorporated until 1819. In 1818, banks for savings were incorporated in Baltimore and Salem, and in 1819 in New York, Hartford, Newport and Providence.

By country

Nowadays, European savings banks have kept their focus on retail banking: payments, savings products, credits and insurances for individuals or small and medium-sized enterprises. Apart from this retail focus, they also differ from commercial banks by their broadly decentralised distribution network, providing local and regional outreach.

See also

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A commercial bank is a type of bank that provides services such as accepting deposits, making business loans, and offering basic investment products that is operated as a business for profit.

An offshore bank is a bank regulated under international banking license, which usually prohibits the bank from establishing any business activities in the jurisdiction of establishment. Due to less regulation and transparency, accounts with offshore banks were often used to hide undeclared income. Since the 1980s, jurisdictions that provide financial services to nonresidents on a big scale, can be referred to as offshore financial centres. Since OFCs often also levy little or no tax corporate and/or personal income and offer, they are often referred to as tax havens.

Postal savings systems provide depositors who do not have access to banks a safe and convenient method to save money. Many nations have operated banking systems involving post offices to promote saving money among the poor.

Passbook paper book used to record bank transactions on a deposit account

A passbook or bankbook is a paper book used to record bank, or building society transactions on a deposit account.

The Dubai-based Mashreqbank psc is the oldest privately owned bank in the United Arab Emirates. Founded as the Bank of Oman in 1967, Mashreq was the first UAE bank to install ATM cash dispensers, the first to issue debit and credit cards and the first to introduce consumer loans. Today Mashreq provides conventional and Islamic personal banking services including deposits, loans and credit cards; conventional and Islamic investment banking services including corporate finance and investment advisory on mergers and acquisitions, initial in public offering and underwriting; conventional and Islamic asset management services including wealth management.

Alterna Savings is a credit union founded in 1908 in Ottawa. It operates branches in Ontario and direct banking across Canada through its subsidiary Alterna Bank.

La Caixa Spanish foundation, owner of "CaixaBank" and its subsidiaries.

La Caixa, formally Caixa d'Estalvis i Pensions de Barcelona, headquartered in Valencia, is currently Spain's third largest financial institution, with a network of over 5,800 branches, more than 9,500 automated teller machines, a workforce in excess of 31,900 and more than 13 million customers.

Caixa Geral de Depósitos

Caixa Geral de Depósitos (CGD) is a Portuguese state-owned banking corporation, and the second largest bank in Portugal. CGD is Portugal's largest public sector banking corporation, established in Lisbon in 1876.

Westland Savings Bank was one of 14 regional trustee savings banks operating in New Zealand. WSB was based on the West Coast of the South Island of New Zealand. Formed as a savings bank under special banking legislation that separated savings banks from trading banks.

Retail banking, also known as consumer banking, is the provision of services by a bank to the general public, rather than to companies, corporations or other banks, which are often described as wholesale banking. Banking services which are regarded as retail include provision of savings and transactional accounts, mortgages, personal loans, debit cards, and credit cards. Retail banking is also distinguished from investment banking or commercial banking. It may also refer to a division or department of a bank which deals with individual customers.

Credit Europe Bank (CEB) is a Dutch registered bank owned by the Turkish financial holding company FIBA Group. The bank is focused on corporate lending as well as on retail banking and operates in the euro-zone countries of the Netherlands, Belgium, Germany, Malta as well as in China, Dubai, Russia, Romania, Switzerland and Ukraine. The bank's strategy is to offer easy-to-use retail banking and SME products as well as private banking. It also offers trade finance and corporate banking services.

Cooperative banking

Cooperative banking is retail and commercial banking organized on a cooperative basis. Cooperative banking institutions take deposits and lend money in most parts of the world.

The Big Four is the colloquial name for the four main banks in several countries, where the banking industry is dominated by just four institutions and where the phrase has gained currency.

Savings bank (Spain)

In Spain, a savings bank is a financial institution that specializes in accepting savings deposits and granting loans. Spanish banks fall into two categories: Privately owned banks (bancos) and government owned banks. The original aim was to encourage thrift among the very poor, but they evolved to compete with and rival commercial banks.

The history of banking in China includes the business of dealing with money and credit transactions in China.

European Savings Banks Group voluntary association

The European Savings and Retail Banking Group is a European banking association representing around two dozen members from 20 countries, comprising approximately 1000 individual savings and retail banks. These institutions operate 60,000 outlets and employ 810,00 people.

Bank financial institution

A bank is a financial institution that accepts deposits from the public and creates credit. Lending activities can be performed either directly or indirectly through capital markets. Due to their importance in the financial stability of a country, banks are highly regulated in most countries. Most nations have institutionalized a system known as fractional reserve banking under which banks hold liquid assets equal to only a portion of their current liabilities. In addition to other regulations intended to ensure liquidity, banks are generally subject to minimum capital requirements based on an international set of capital standards, known as the Basel Accords.

The Oesterreichische Nationalbank, Austria's central bank, was founded in 1816. After being taken over by the German Reichsbank in 1938, it was re-established on July 3, 1945. The bank is a corporation with capital shares fixed by law at $150 million; 100% of the shares are, by law, held by the Austrian government. The central bank and the bank of issue, it preserves the domestic purchasing power of the Austrian currency and its value in terms of stable foreign currencies, and controls external transactions affecting the balance of payments. It also sets reserve requirements for credit institutions.

A public bank is a bank, a financial institution, in which a state, municipality, or public actors are the owners. It is an enterprise under government control. Prominent among current public banking models are the Bank of North Dakota, the German public bank system, and many nations’ postal bank systems.

Charter Court Financial Services Group plc is a financial services company operating in the United Kingdom, which provides retail savings products, specialist mortgage products, mortgage administration services and credit analysis. Charter Court operates via three separate specialist brands: Charter Savings Bank for retail savings, Precise Mortgages for specialist mortgages and Exact Mortgage Experts for credit analysis and servicing of existing mortgage portfolios.

References

  1. "Banks". New Student's Reference Work. 1914., via Wikisource

Bibliography