Savings Banks
A savings bank is a financial institution that takes savings deposits from customers, invests the deposit, and provides the depositor with a return for the investment. Commercial banks, mutual savings banks, savings and loan associations, credit unions, and municipal savings banks are all examples of savings banks. With the exception of commercial banks these financial institutions do not accept demand deposits.
Most savings banks began with the idea to help people save their money in a secure way. The earliest savings banks were started in Italy in the 1400s. The first savings banks in the United States were started in the 1800s with philanthropic purposes. They were banks that were owned mutually by the depositors and some were chartered by states. Most of these banks were originally located in New England, New York, and New Jersey.
Due to deregulation of the banking industry in the 1980s the difference between a savings bank and other type of financial institution is becoming a bit unclear. This allowed chartered banks to become federally chartered allowing them to convert to stock corporations insured by the Federal Savings and Loan Insurance Corporation.