What Are The Functions Of Thrift Banks?


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Abi Ainscough answered
The main function of a thrift bank is to provide their customers and users with mortgages, and to take deposits for banking conventions such as savings accounts. They also function in order to relieve the monopoly of national or international banks on the mortgage and lending market, giving local communities and alternative to brand-name banks.

  • What is a thrift bank?

A thrift bank is a bank which aims to provide low-cost mortgages and high-interest rate savings and checking accounts. Thrift banks, unlike national or international banking chains and companies, are known to carry out extensive work in the local community, in order to benefit the local people. They usually have a great deal of knowledge about the local economy, and as a result can provide accounts and mortgages which benefit the local people the most.

Thrift banks originally provided mortgages and deposit facilities alone. However, they now tend to provide other basic banking services, such as personal loans, checking accounts and accounts for certain populations, such as those over the age of 50.

  • Who can use a thrift bank?

Thrift banks can be used by anyone who wants no-frills banking services within their local community. While they may not be ideal for businesses, travelers, or those with very specific banking needs, for the average bank user they can be very beneficial. Because of the type of services that thrift banks offer, and the scale on which they are offered, thrift banks can be the most profitable way to bank for many people, as they often offer high interest rates and great deals on mortgages.

  • Are thrift banks government banks?

Thrift banks are not usually owned by the government. However, deposits made into a thrift bank are normally protected by a government guarantee or program, in order to encourage and reassure depositors that their funds are safe.

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