Banking Practice Exam 2025 – 400 Free Practice Questions to Pass the Exam

A mutual savings bank primarily resembles a thrift institution because both are focused on accepting deposits and making loans, particularly to individuals and families for purposes like home buying. Thrift institutions, which include savings and loan associations and credit unions, are designed to promote savings among their members and provide them with mortgage and consumer loans.

Mutual savings banks specifically operate as depositor-owned entities, where the profits are typically returned to the account holders in the form of higher interest rates on savings or lower rates on loans. This member-focused approach aligns with the mission of thrift institutions, which prioritize the interests of their customers over profit maximization in the same way.

In contrast, commercial banks cater to a wider range of financial services, including business loans and investment activities, while investment banks primarily focus on capital markets, mergers, and acquisitions rather than direct deposit and loan services. Private equity firms, on the other hand, invest in private companies and are typically not in the business of taking deposits or making loans in the traditional sense. Therefore, the financial structure of a mutual savings bank is best aligned with that of a thrift institution.