What is a Thrift Bank?

A thrift bank, also known as a savings and loan association, is a form of

financial institution that provides essential banking services. In addition, it offers
a variety of savings options and mortgage loan services. Like commercial banks,
these also qualify as depository institutions and may even provide a range of
other products and services.
Earlier, thrift banks confine to offering time deposits and savings accounts. Still,
with the change in customer behavior, preferences, needs, and expectations,
these banks started offering various products and services from commercial
banking firms and credit unions.

Table of contents

 What is a Thrift Bank?

o Functions

o Types
o Examples of Thrift Bank

o Thrift Bank vs. Commercial Bank

 #1 – Commercial Banks

 #2 – Thrift Bank
o Conclusion

o Recommended Articles

Functions
1. These banks are financial institutions that relieve the monopoly stress
and offer their account holders facilities like savings accounts, mortgage
loans, etc. The purpose is to accept deposits and provide mortgage loans
to their customers.
2. The interest on the savings deposited by the customers in the bank is
high. In contrast, the customers’ curiosity about the mortgage loan is
relatively lower than commercial banks and credit unions.
3. They formed these thrift banks to offer their customers mortgage loan
facilities, enabling them to make savings from time to time. It also
focuses on relieving the mortgage and lending market from a monopoly
of domestic or foreign banking institutions.
4. These banks also offer mortgages at lower costs and savings accounts
that pay a higher rate of interest in comparison to national and
international banking institutions. These banks operate in the best
interest of the local people. For this reason, they offer savings accounts
and mortgage loans that could benefit the locals.