There is an ever-growing competition between mutual savings banks and commercial banks with "savings departments. As a result of the struggle for savings accounts, the interest rate has often been forced to a high level. In general, commercial banks have been able to outbid the mutual savings banks, as the latter's investments are restricted by law and their earnings consequently limited. It must also be remembered that mutual savings banks are not operated for profit; hence trustees at times lack this incentive to adopt methods for securing new business. Nevertheless, many of the mutual banks are now following a more progressive policy in order to gather new accounts. Such services are offered as the holding of Liberty Bonds for persons who cannot afford to rent safe-deposit boxes. In Massachusetts, some savings banks conduct insurance departments for the issuing of policies. Mutual banks have practically waived the right of notice before the withdrawal of funds, and thus savings deposits are virtually payable on demand.

In order to meet this change in the nature of savings deposits, it has likewise been necessary to shorten the maturity of certain investments, so that they possess greater liquidity. It has even been proposed to admit mutual banks to membership in the Federal Reserve system. This plan is not feasible, since mutual banks have no capital stock, and cannot as members subscribe to shares in the Federal Reserve banks; also, as they seldom hold eligible paper, they cannot well take advantage of the rediscount facilities.