Banks and savings and loan associations differ primarily in that separate government bodies regulate the two institutions. Most of the differences between the two institutions have little effect on the average financial customer.
A crisis in the late 1980s and 1990s, when many savings and loans failed, brought significant changes to federal regulations on savings and loan institutions. Most of the regulatory and insurance programs for banks and savings and loans were restructured and consolidated.
Most banks are regulated by the Federal Deposit Insurance Corporation (FDIC). A smaller number are regulated by the Board of Governors of the Federal Reserve System or the Comptroller of the Currency. Banks usually are owned by stockholders and traded on the stock market. Banks offer a wide variety of financial services to businesses and individuals.
Savings and Loans
The Office of Thrift Supervision regulates savings and loan institutions, also known as savings banks or thrifts. Savings and loans offer savings and checking accounts, and traditionally focus on making home loans. Many savings and loans have expanded into business lending and other investments. Most savings and loans are privately-owned or owned as mutual institutions, in which each depositor is part owner of the institution.
The FDIC insures deposits at both banks and savings and loan associations. The insurance limit is $250,000 per account at each covered institution.
- Photo Credit life savings image by Kimberly Reinick from Fotolia.com
Savings Banks Vs. Commercial Banks
The term "bank" is applied to a variety of financial intermediaries. The financial intermediary matches suppliers of capital to invest against those...
What Is the Difference Between a Loan and a Line of Credit?
When you find yourself in a financial bind, borrowing money is sometimes the best solution. Friends and family are one option for...
What Is the Difference Between an Investment Bank & a Commercial Bank?
A commercial bank takes deposits and issues loans to customers. An investment bank sells securities, investment instruments and provides advice on buyouts...
What Is the Difference Between a Bank Loan & a Credit Card?
There are two main options that enable a person to borrow a relatively large amount of money: bank (personal) loans, and credit...
What Is the Difference Between a Commercial Bank and a Savings & Loan Bank?
A commercial bank and a savings and loan institution are similar in that they both accept deposits and make loans. Each type...
The Difference Between a Chartered Bank and a Commercial Bank
For a bank to legally operate, it needs a charter. The charter can be either state or federally issued to set up...
What Are the Differences Between Commercial Banks & Thrift Institutions?
Thrift institutions and commercial banks are different financial entities with different models of funding and reasons for existence. As the modern banking...