Savings bank

Savings bank, financial institution that encourages saving by individual depositors, paying them interest or dividends, while providing funds to borrowers, who pay interest. In the United States savings banks originated in the early 19th century as charitable nonprofit institutions. Such institutions, which are concentrated in the northeast, are now mostly nonprofit mutual saving banks, run by a board of directors. They now provide the additional service of negotiable order of withdrawal (NOW) accounts, which function like checking accounts.