While of National importance, savings banks are chartered by the respective states in which they exist, and as such are distinctly local institutions.

Unlike the National, the savings bank is not established as a money-making corporation.

The ostensible and actual purpose of the savings bank is to encourage people of small means to save.

The savings bank provides a safe place for the care of such deposits, and it pays such rates of interest on such deposits as are warranted by the earnings of its investments after paying the expenses incident to the proper conduct of its officers.

When a savings bank receives authorization to act, through a charter from the state, the organizers choose a board of directors and the proper officers.

Usually the officers occupying positions of trust and responsibility are required to give bonds for the proper discharge of their duties.

HOW BUSINESS IS CONDUCTED

With all the legal conditions complied with, and a suitable office provided, the savings bank is ready for business.

Some savings banks will receive on deposit any sum from five cents to five thousand dollars.

Other banks will not receive less than one dollar at a time, nor more than a thousand.

We have heard of "penny savings banks," but they are rarely chartered, and are organized, only to encourage thrift among children.

Fractional parts of a dollar are not usually reckoned as drawing interest.

Some banks require as much as three, four or five dollars before allowing interest.

Savings banks in the eastern states pay from three to four per cent. In the west it is sometimes as high as six.

Each bank has certain dates at which calculation of interest begins. As a rule this is January 1st, April 1st, July 1st, and October 1st.

Money deposited at any time between these dates does not draw interest till the beginning of the next quarter.

But never mind the interest.

The best time to make a deposit is when you have the money.

The bank is safer than your pocket.

HOW TO DEPOSIT

Count your money carefully and make a memorandum of the amount before giving to the savings bank to deposit.

Hand the money to the officer—usually "the receiving teller"— authorized to receive it.

The teller writes down the name, age, occupation and residence of the depositor.

If money is deposited in the name of one under legal age, the names of the parents and the birthplace of the minor are also recorded.

The adult depositor must write his name in a book provided by the bank for the signature of clients.

When these conditions are complied with, the depositor receives a memorandum book, known as a "deposit book", in which, with his name and date, is written the amount of his first deposit.

The deposit book must be carefully guarded, for without its presentation at the savings bank money cannot be drawn. You cannot check against your savings bank account, as with a commercial bank.

HOW THE ACCOUNT GROWS

After the first account is opened the rest is easy.

On the second, as on all subsequent visits, the deposit book, with the amount to be entered, is handed to the receiving teller. He counts the money, makes a record of it for his own use, enters it on your book as a deposit, and hands the book back. That is all.

Whenever interest is due it is written down in the book as if it were a cash deposit.

The interest, if desired, will be paid in cash, but if allowed to remain, it begins at once to earn interest for itself.

Interest grows like a rolling snow ball. On such small beginnings great fortunes have been built.

Savings banks keep a reserve, made up of earnings in excess of interest and all expenses.

This reserve earns money.

The money so earned is reckoned as a net profit, and it may be distributed, and usually is, among its depositors as a "dividend."

THE LIMIT OF DEPOSIT

Different banks have different limits of deposit, that is fixed sums beyond which they will not receive.

The limit is from one thousand to five thousand dollars.

When the fortunate depositor has reached the limit with one savings bank, there is no law to prevent his opening another account with another, or with any number of similar banks.

Remember the savings banks are not meant for capitalists, but for small depositors.

After deposits and interests have reached a total of $1,600, the interest will not go on earning interest, but will be regarded simply as a deposit.

This is in compliance with law.

Depositors, posted as to the law, open another account with another bank, and keep on till the interest limit is reached.

HOW TO DRAW MONEY

A savings bank depositor may either draw money himself or through some properly authorized person.

This is the method:

The deposit book is presented to the paying teller. The owner states the sum he wants to draw.

Having assured himself that the bearer of the book is the right person, the teller takes a receipt in a book kept for the purpose, for the amount, enters the same on the right hand or debit side of the book, and hands out the money.

There is a form of authorization for another to draw, printed on the deposit book. This must be copied and its directions complied with.

Most banks will not allow depositors to draw out less than a fixed sum, say $5.00.

This saves trouble, and prevents thoughtless depositors from going to the bank every time they want a dollar.

Before a depositor can draw a large sum from a savings bank he may be compelled, under the law, to give from one week to six weeks' notice of his intention.

This provision may not prevent a run on the bank, but it gives the managers time to provide for it.

Read the rules in the deposit book.

HOW SAVINGS BANKS EARN

How can a bank that does not discount notes or deal in loans and commercial paper earn money? How can it pay interest?

While they may be individually small, the aggregate of all the deposits in a savings bank may, and often do, amount to many millions.

This money is not allowed to lie idle.

Under the skilled direction of the bank officers, the money, instead of lying idle in the vaults, is invested in many ways, but always in accordance with the laws of the state under which the bank is chartered.

Much of the money is invested in mortgages on real estate, never on personal property.

National bank stocks, sound railroad bonds, and other forms of reliable interest security are fields for the investment of savings bank funds.

Savings banks are subject to the periodic inspection of state officers appointed for the purpose.

The failure of a savings bank through bad investments or the dishonesty of officials is very rare.

Avoid all banks that promise more than the regular rate of interest.

Private banks may be, and usually are, honestly conducted, but to be safe, deposit only with a bank that is regularly chartered and is subject to the inspection of the law.

The savings bank is the best for the wage earner.