How do Mutual Savings Banks primarily operate?

Mutual Savings Banks primarily operate for the benefit of their depositors and do not have stockholders. This structure means that the focus of these banks is on serving the interests of the individuals who have deposited money with them, rather than generating profits for shareholders. Instead of distributing profits to stockholders in the form of dividends, any earnings generated by the bank are typically reinvested into the institution or returned to depositors through higher interest rates on savings accounts or lower rates on loans.

This model is designed to create a symbiotic relationship between the bank and its depositors, as the success of the institution directly benefits those who hold accounts there. In contrast, other types of banks, such as commercial banks, operate for profit and have shareholders who expect returns. This fundamental difference emphasizes the mutual nature of these banks, where the priority is on enhancing the overall financial well-being of the depositors rather than extracting profits for external investors.