; Characteristics of savings banks
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Characteristics of savings banks


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Savings banks operate as universal banks handling all normal banking business with private
households, businesses, municipalities and institutional clients. Savings banks have the task of
securely and efficiently offering interest-bearing investments among other services to the

Financial gain is not the main purpose of the business. In some jurisdictions, these types of
bank's legal status is based on either public or private law.

The bank calculates interests of a passbook or savings account by two weeks. The rule is that
each month has two fortnights, interest is then calculated twice a month: the 16th of the month
and the first of the following month.

Banks can give the customer the right to dispose of a particular maximum amount per calendar
month without notice, provided that the savings deposit has a notice period of three months.

If the credit institutions in case of a disposition permit higher than the agreed amount or the
savings deposit is based on a different notice period, advance rates are calculated. This is seen
by some investors as a disadvantage compared to other forms of investment, such as call

A number of savings banks grew substantially during the 1800s and 1901. In order to further
strengthen cooperation, associations were established which would act as a central hub to the
savings bank movement. The majority of savings banks were still very small, which made it
difficult to operate effectively, but new laws paved the way for the merging of small banks into
larger functional units.

Savings banks were mostly in the early 19th Century opening up for the poorer strata of the
population a secure way to gain access to basic banking services. The institutions were
therefore first subjected to strict business restrictions, which have been gradually relaxed over
time. Today, the savings banks regularly provide all banking transactions, such that they are
now operating as universal banks.

In some countries, bank laws stipulate that deposits of the bank customers will be secured by a
separate security system. This consists of the regional savings bank guarantee funds, the
guarantee fund of the state banks and the guarantee of the country's building societies.

The system of the Savings Bank Finance Group is a joint liability, so that is in a crisis, the total
of all funds for institutions is properly accounted for and secured. The liability scheme ensures
the affiliated institutional protection of their liquidity and solvency.

On the other hand, the World Savings Banks Institute (WSBI) allows the global exchange of
experience among the savings organizations. It also represents the views of the savings banks
at the international level, for example to the World Bank or the International Monetary Fund.

The top structures of a bank are the board as executive committee and the board as an
oversight body. The use of profits realized is in some cases regulated differently in the regional
savings bank. It is common for profits made, if they boost the contingency reserve to be
distributed to other institutional objectives, and these can include charitable purposes. Many
savings banks have also established foundations that support various charitable causes.

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