financial institution
Financial institutions, sometimes called banking institutions, are business entities that provide services as intermediaries for different types of financial monetary transactions. Broadly speaking, there are three major types of financial insti ...
whose primary purpose is accepting
savings deposits
A savings account is a bank account at a retail bank. Common features include a limited number of withdrawals, a lack of cheque and linked debit card facilities, limited transfer options and the inability to be overdrawn. Traditionally, transac ...
and paying
interest
In finance and economics, interest is payment from a borrower or deposit-taking financial institution to a lender or depositor of an amount above repayment of the principal sum (that is, the amount borrowed), at a particular rate. It is distinct ...
on those deposits.
They originated in Europe during the 18th century with the aim of providing access to
savings
Wealth is the abundance of valuable financial assets or physical possessions which can be converted into a form that can be used for transactions. This includes the core meaning as held in the originating Old English word , which is from an I ...
products to all levels in the population. Often associated with social good, these early banks were often designed to encourage
low-income
Poverty is the state of having few material possessions or little
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 union
A credit union, a type of financial institution similar to a commercial bank, is a member-owned nonprofit organization, nonprofit financial cooperative. Credit unions generally provide services to members similar to retail banks, including depo ...
s. The structure and legislation took many different forms in different countries over the 20th century.
Savings banks and savings-and-loans are often confused. The original function of savings banks to service consumers was limited to savings. Savings banks invested in
government
A government is the system or group of people governing an organized community, generally a state.
In the case of its broad associative definition, government normally consists of legislature, executive, and judiciary. Government is a ...
and
corporate debt
A corporate bond is a bond issued by a corporation in order to raise financing for a variety of reasons such as to ongoing operations, M&A, or to expand business. The term is usually applied to longer-term debt instruments, with maturity of ...
. Savings and loan associations had a dual purpose which gave more importance to home loans. Towards the end of the 20th century their functions blurred as savings banks issued mortgages.
The advent of
Internet banking
Online banking, also known as internet banking, web banking or home banking, is an electronic payment system that enables customers of a bank or other financial institution to conduct a range of financial transactions through the financial inst ...
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.
History
In Europe, savings banks originated in the 19th or sometimes even the 18th century. Their original objective was to provide easily accessible
savings
Wealth is the abundance of valuable financial assets or physical possessions which can be converted into a form that can be used for transactions. This includes the core meaning as held in the originating Old English word , which is from an I ...
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:
By country
Nowadays, European savings banks have kept their focus on
retail banking
Retail banking, also known as consumer banking or personal 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 servi ...
: payments, savings products, credits and insurances for individuals or small and medium-sized enterprises. Apart from this retail focus, they also differ from
commercial bank
A commercial bank is a financial institution which accepts deposits from the public and gives loans for the purposes of consumption and investment to make profit.
It can also refer to a bank, or a division of a large bank, which deals with cor ...
s by their broadly
decentralised
Decentralization or decentralisation is the process by which the activities of an organization, particularly those regarding planning and decision making, are distributed or delegated away from a central, authoritative location or group.
Conce ...
distribution network, providing local and regional outreach.
*
Austria
Austria, , bar, Östareich officially the Republic of Austria, is a country in the southern part of Central Europe, lying in the Eastern Alps. It is a federation of nine states, one of which is the capital, Vienna, the most populous ...
: see
Erste Group
Erste Group Bank AG (Erste Group) is an Austrian financial service provider in Central and Eastern Europe serving 15.7 million clients in over 2,700 branches in seven countries.
History
Erste Group was founded in October 1819 as ''Erste öster ...
*
Brazil
Brazil ( pt, Brasil; ), officially the Federative Republic of Brazil (Portuguese: ), is the largest country in both South America and Latin America. At and with over 217 million people, Brazil is the world's fifth-largest country by area ...
: see
Caixa Econômica Federal
Caixa Econômica Federal (, ''Federal Savings Bank''), also referred to as Caixa, is a state-owned Brazilian financial services company headquartered in Brasília, Brazil. It is the fourth largest banking institution in Brazil, as well as the ...
*
Bulgaria
Bulgaria (; bg, България, Bǎlgariya), officially the Republic of Bulgaria,, ) is a country in Southeast Europe. It is situated on the eastern flank of the Balkans, and is bordered by Romania to the north, Serbia and North Macedon ...
: see
DSK Bank
DSK Bank ( bg, Банка ДСК, ''Banka DSK''; formerly Държавна спестовна каса, ''Darzhavna spestovna kasa'' — State Savings Bank) is a major Bulgarian bank. It has been owned by the Hungarian OTP Bank since 2003, bein ...
France
France (), officially the French Republic ( ), is a country primarily located in Western Europe. It also comprises of Overseas France, overseas regions and territories in the Americas and the Atlantic Ocean, Atlantic, Pacific Ocean, Pac ...
: see
Groupe Caisse d'Épargne
Groupe Caisse d'épargne was a French cooperative banking group, with around, 4700 branches in the country. Its origins go back to the founding in 1818 of the , France's first savings bank. The group was active in retail and private banking, as ...
*
Germany
Germany,, officially the Federal Republic of Germany, is a country in Central Europe. It is the second most populous country in Europe after Russia, and the most populous member state of the European Union. Germany is situated betwe ...
: see
Sparkassen-Finanzgruppe
The ''Sparkassen-Finanzgruppe'' ("Savings Banks Financial Group") is a network of public banks that together form the largest financial services group in Germany and in all of Europe. Its name refers to local government-controlled savings banks t ...
*
Italy
Italy ( it, Italia ), officially the Italian Republic, ) or the Republic of Italy, is a country in Southern Europe. It is located in the middle of the Mediterranean Sea, and its territory largely coincides with the homonymous geographical re ...
New Zealand
New Zealand ( mi, Aotearoa ) is an island country in the southwestern Pacific Ocean. It consists of two main landmasses—the North Island () and the South Island ()—and over 700 smaller islands. It is the sixth-largest island count ...
: Savings banks ceased to exist in 1987 as an official type of bank, being replaced with registered banks (Grimes, 1998)
*
Norway
Norway, officially the Kingdom of Norway, is a Nordic country in Northern Europe, the mainland territory of which comprises the western and northernmost portion of the Scandinavian Peninsula. The remote Arctic island of Jan Mayen and t ...
: see
Sparebank
Sparebank is a Norwegian savings bank without external owners. The Norwegian sparebanks are a separate type of juridical entity that differ from commercial banks. There are a total of 123 savings banks in Norway.
History
The first savings bank ...
*
Portugal
Portugal, officially the Portuguese Republic ( pt, República Portuguesa, links=yes ), is a country whose mainland is located on the Iberian Peninsula of Southwestern Europe, and whose territory also includes the Atlantic archipelagos of ...
: see
Caixa Geral de Depósitos
Caixa Geral de Depósitos (CGD) () is a Portuguese state-owned banking corporation, and the largest bank in Portugal, established in Lisbon in 1876.
CGD now has presence in 23 countries spanning four continents through branches, representative ...
*
Soviet Union
The Soviet Union,. officially the Union of Soviet Socialist Republics. (USSR),. was a transcontinental country that spanned much of Eurasia from 1922 to 1991. A flagship communist state, it was nominally a federal union of fifteen national ...
: see
sberkassa
Sberkassa Syllabic abbreviation: russian: сберегательная касса, sberegatelnaya kassa, lit=savings office, links=no ( rus, сберкасса, p=zbʲɪrˈkasːə, a=Ru-сберкасса.ogg) in the Soviet Union and modern Russia ...
(сберкасса, сберегательная касса), often translated as “savings bank” even though ''sberkassas'' were not banks in the common sense. Initially they were the outlets of the only Soviet State Bank, ''
Gosbank
Gosbank (russian: Госбанк, Государственный банк СССР, ''Gosudarstvenny bank SSSR''—the State Bank of the USSR) was the central bank of the Soviet Union and the only bank in the entire country from 1922 to 1991. ...
'' until 1987 and ''
Sberbank
PJSC Sberbank (russian: Сбербанк, initially a contraction of russian: сберегательный банк, translit=sberegatelnyy bank, lit=savings bank, link=no) is a Russian majority state-owned banking and financial services compan ...
'' (USSR Savings Bank) afterwards.
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Spain
, image_flag = Bandera de España.svg
, image_coat = Escudo de España (mazonado).svg
, national_motto = ''Plus ultra'' (Latin)(English: "Further Beyond")
, national_anthem = (English: "Royal March")
, i ...
: see
Savings bank (Spain)
In Spain, a savings bank ( es, caja de ahorros or informally just ''caja'', ca, caixa d'estalvis, gl, caixa de aforros, informally caixa, eu, aurrezki kutxa) is a financial institution that specializes in accepting savings deposit account, dep ...
*
Sweden
Sweden, formally the Kingdom of Sweden,The United Nations Group of Experts on Geographical Names states that the country's formal name is the Kingdom of SwedenUNGEGN World Geographical Names, Sweden./ref> is a Nordic country located on ...
United Kingdom
The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Europe, off the north-western coast of the continental mainland. It comprises England, Scotland, Wales and North ...
: see
Trustee savings bank
A bank is a financial institution that accepts deposits from the public and creates a demand deposit while simultaneously making loans. Lending activities can be directly performed by the bank or indirectly through capital markets.
Because ...
*
United States
The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territorie ...
: see
Savings and loan association
A savings and loan association (S&L), or thrift institution, is a financial institution that specializes in accepting savings deposits and making mortgage and other loans. The terms "S&L" or "thrift" are mainly used in the United States; simi ...
,
Federal savings bank
Federal savings associations (also called "federal thrifts" or "federal Savings Banks"), in the United States, are institutions chartered by the Office of Thrift Supervision which is now administered by Office of the Comptroller of the Currency ...
, and
Mutual savings bank
A mutual savings bank is a financial institution chartered by a central or regional government, without capital stock, owned by its members who subscribe to a common fund. From this fund, claims, loans, etc., are paid. Profits after deductions a ...
See also
*
Postal savings system
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.
History
In 1861, G ...
References
Bibliography
* "Liberalisation of financial markets in New Zealand" Arthur Grimes, Institute of Policy Studies,
Victoria University of Wellington
Victoria University of Wellington ( mi, Te Herenga Waka) is a university in Wellington, New Zealand. It was established in 1897 by Act of Parliament, and was a constituent college of the University of New Zealand.
The university is well know ...
, Wellington, 1998 Retrieved Feb. 11, 2006.
* Tiwari, Rajnish and Buse, Stephan (2006) The German Banking Sector: Competition, Consolidation and Contentment Hamburg University of Technology (TU Hamburg-Harburg)
* Brunner, A., Decressin, J. / Hardy, D. / Kudela, B. (2004): Germany’s Three-Pillar Banking System – Cross-Country Perspectives in Europe, Occasional Paper, International Monetary Fund, Washington, D.C. 2004.
* Mauri, Arnaldo (1969). ''The Promotion of Thrift and of Savings Banks in Developing Countries'', International Savings Bank Institute, Geneva.