Savings Bank

Savings banks were historically set up to encourage ordinary people to save, at a time when commercial banks mostly served businesses and wealthy customers. Many began as community-based or mutual institutions, owned by their depositors rather than by shareholders.

Their business model traditionally centred on taking savings deposits and lending that money as mortgages to local homebuyers. In some countries, they remain important regional lenders.

Over time, the differences between savings banks and commercial banks have narrowed in many places. Many savings banks now offer current accounts, cards, personal loans and business banking, and some have converted into shareholder-owned banks.

The exact meaning varies by country. Examples include savings and loan associations and savings institutions in the United States, building societies in the United Kingdom and savings banks in Germany and Spain, many of which are closely tied to their local regions. Deposits at regulated savings banks are generally covered by the same deposit insurance as other banks.