In the above description of the nature of the savings bank, it has been conceived as a single institution, but it is organized in various forms, of which the most important is the mutual savings bank.

The mutual type was the original bank for savings and the first was organized in England in 1810. During the early half of the nineteenth century similar banks were established in New England and New York, but the movement did not extend beyond the North-eastern states. In this area on June 30, 1921, the total deposits of mutual savings banks amounted to $5,575,181, 000. These resources have a special significance in finance, since they represent not extensions of credit by banks, but deposits of actual funds by customers.

The purpose in organizing a mutual savings bank has been philanthropic rather than commercial. Originally these institutions were established for the purpose of encouraging thrift among the poorer class and of improving their welfare. The founders were actuated by charitable motives and were not expected to derive any profit from the undertaking. This theory is still applied in the case of the mutual savings bank, for it is organized and operated by a group of persons known as trustees, who are forbidden by law to receive any compensation for their services. In fact, the organizers must contribute to an initial fund to meet the expenses of starting the new bank and to operate it until earnings render it self-supporting, at which time the contributions are returned.

The mutual savings bank is not operated through capital derived from the sale of stocks, for the business is conducted through funds left by depositors, who are the real owners of the bank. Thus the income which they receive is technically called a dividend, but because of its certainty of payment and stability of rate it is popularly regarded as interest. Although they are in a sense the owners of the mutual banks, the depositors exercise neither control over the management nor choice in the selection of the trustees. The first trustees are appointed by the original organizers and later additional trustees are elected by the board itself, thus constituting it a self-perpetuating body.

The trustees of a large mutual savings bank are divided into committees with duties quite similar to the directors of a commercial bank. The finance committee passes upon all applications for loans on mortgages and approves all purchases of securities. In New York State, a trustee may not receive a loan from the bank. An auditing committee examines the books of the institution and verifies all receipts and disbursements, while appointments and discharges of employees are made by a personnel committee.

The duties of the higher officers are about the same as in a commercial bank. The president, as a member of the board of trustees, presides over meetings. As chief executive he manages the bank, and in this task he is aided by one or more vice-presidents. A treasurer performs duties similar to those of a cashier in a commercial bank. He has custody of cash, securities, and other property of the bank; he also records the minutes of trustee meetings, keeps the bank ledgers, conducts correspondence, and in general directs the work of the staff. In a large bank the treasurer is relieved of these purely clerical duties, which devolve upon a secretary. The work is sometimes divided further by transferring the keeping and the auditing of the books to an officer known as the comptroller.

As the operation of the savings bank is much simpler than that of the commercial bank, there are fewer departments. There is no need for an exchange division, since savings banks do not present checks on one another. The departments deal principally with deposits and investments. One department concerns itself exclusively with the opening of new accounts. Deposits and withdrawals are handled by a receiving and a paying teller; another department has charge of loans on mortgages and investments in securities, and a head bookkeeper supervises the work of the ledger clerks. In general, the bookkeeping of a savings bank does not present the many difficulties found in a commercial bank, and the handling of deposits and the making of investments possess the only distinctive features which need consideration in detail.